IJ 

lA 

yA 

=^=  o 

w 

|o 

=^=^=  -n 

|o 

1} 

M 

Is 

^==  z 

'I 


THE  LIBRARY 

OF 

THE  UNIVERSITY 

OF  CALIFORNIA 

LOS  ANGELES 

SCHOOL  OF  LAW 


THE  LAW 

OF 

OPTION  CONTRACTS 


BY 

FRANK  JAMES 

OF  THE  LOS  ANGELES  BAR 


SAN  FRANCISCO 
BENDEK-MOSS  COMPANY 

LAW  PUBLISHERS  AND  BOOKSELLERS 
1916 


r 

TZ3Z»c 


Copyright,  1916 
By  Frank  James 


Williams  Printing  Compant 
indbpbndbnt  pressroom 


PREFACE 

Most  of  the  material  for  this  book  was  gathered 
by  the  author  for  use  in  his  own  practice.  The  cases 
examined  were  exhaustively  collected  on  the  par- 
ticular point  in  hand  at  the  time,  carefully  read 
and  digested,  and  then  made  readily  accessible  by 
means  of  card  indexes.  The  growing  interest  in 
the  subject  led  him  to  undertake,  in  the  same  way, 
the  work  of  covering  the  whole  law  of  option  con- 
tracts. In  carrjdng  out  this  imdertaking,  the 
author  became  more  and  more  impressed  with  the 
growing  importance  of  the  option  contract  in 
every-day  business  life,  and  finding  no  work  on  the 
subject,  was  led  to  believe  that  the  material  in  hand 
could  be  made  helpful  to  the  profession.  This  book 
is  the  result  of  that  belief. 

The  author  desires  to  thank  his  law  partner, 
Walter  E.  Smith,  Esq.,  of  the  Los  Angeles  Bar, 
for  many  valuable  suggestions  made  by  him  and 
incorporated  in  this  work. 


Frank  James. 


Los  Angeles,  Califobnia,  March,  1916. 


S19977 


CONTENTS 


CHAPTER  I. 


DEFINITION,   NATURE,   INTERPRETATION    AND 
CHARACTERISTICS. 

Sec.  101.     Definition. 

Sec.  102.     Nature  and  characteristics. 

Sec.  103.     Option  distinguished  from  offer. 

Sec.  104.     Option  distinguished  from  offer.    Cases. 

Sec.  105.     Option  distinguished  from  sale. 

Sec.  106.     Option  distinguished  from  sale.   Cases.  Offers  and 

options. 
Sec.  107.     Option  distinguished  from  sale.    Cases  continued. 

Offers  and  options. 
Sec.  108.     Option    distinguished    from    agreement    of    sale. 

Sales. 
Sec.  109.     Option    distinguished    from    agreement    of    sale. 

(Penalty,   forfeiture   and  liquidated  damage 

clauses.) 
Sec.  110.     Option    distinguished    from    agreement    of    sale. 

(Provisions  for  terminating  agreement,  etc.) 
Sec.  111.     Option  to  purchase  distinguished  from  option  to 

return. 
Sec.  112.     Same.   Cases. 
Sec.  113.     Option  distinguished  from  lease. 
Sec.  114.     Option  distinguished  from  agency. 
Sec.  115.     Option  distinguished  from  mortgage  or  deed. 
Sec.  116.     Option  distinguished  from  other  kinds  of  contracts. 

Miscellaneous. 
Sec.  117.     Option  to  terminate  contract. 
Sec.  118.     Alternative  stipulation. 
Sec.  119.     Option  to  mature  chattel  mortgages. 
Sec.  120.     Option    to   mature   debt   secured   by   real    estate 

mortgage. 


VI  LAW   OF   OPTION    CONTRACTS 

Sec.  121.  Same.   Exercise  of  option.   Waiver. 

Sec.  122.  Interpretation.    Rules  of  construction. 

Sec.  123.  Interpretation.    Rules  of  evidence. 

Sec.  124.  Interpretation.    Miscellaneous. 


CHAPTER  II. 

FORM  AND  VALIDITY. 

Sec.  201.     Essentials  of  option  contract. 

Sec.  202.     Parties.    Generally. 

Sec.  203.     Parties.    Executor.    Guardian.    Donee. 

Sec.  204.     Parties.    Agent.    Authority  and  liability  of. 

Sec.  205.  Parties.  Agent.  Authority  and  liability  of,  con- 
tinued. 

Sec.  206.     Parties.    Tenants  in  common.   Joint  tenants. 

Sec.  207.     Parties.    Homestead  and  dower  right  of  wife. 

Sec.  208.     Formal  requisites. 

^ec.  209.     Terms  and  provisions  must  be  definite  and  certain. 

Sec.  2i0,  Terms  and  provisions  must  be  definite  and  certain. 
Price. 

Sec.  211.  Terms  and  provisions  must  be  definite  and  certain. 
Price  fixed  by  offer  of  third  parties,  etc. 

Sec.  212.  Terms  and  provisions  must  be  definite  and  certain. 
Refusal.  Preference  right  to  purchase,  etc. 

Sec.  213.  Terms  and  provisions  must  be  definite  and  certain. 
Arbitration,  valuation  and  appraisal  clauses. 

Sec.  214.     Description. 

Sec.  215.     Legality  and  validity. 

Sec.  216.     Futures. 

Sec.  217.     Mistake,  fraud,  etc. 

Sec.  218.     Time  limit.   Perpetuities. 

Sec.  .2J.9.  Perpetuities.  Common  law  rule.  The  Gomm  de- 
cision. 

Sec.  220.  Perpetuities,  continued.  The  Starcher  Brothers 
decisions. 

Sec.  221.  Perpetuities,  continued.  Rule  under  Statutes  pro- 
viding against  suspension  of  power  of  aliena- 
tion. 


CONTENTS  Vll 


Sec.  222.     Perpetuities.  Rule  where  no  time  limit  is  expressly- 
fixed  by  the  option. 
Sec.  223.     Perpetuities.    Leases  and  like  instruments. 
Sec.  224.     Perpetuities.    Option  for  life  or  for  term  of  years. 


CHAPTER  III. 

CONSroERATION. 

Sec.  301.  Option  contract.   Generally. 

Sec.  302.  Rule  at  common  law. 

Sec.  303.  Mutuality  of  promises. 

Sec.  304.  Mutuality  of  promise  and  condition  precedent. 

Sec.  305.  Mutuality.    Same.    Cases. 

Sec.  306.  Mutuality.    Offers.    Partial  performance. 

Sec.  307.  Mutuality.   Same.   Cases. 

Sec.  308.  Mining  options  and  licenses. 

Sec.  309.  Mining  options  and  licenses,  continued. 

Sec.  310.  Permit  to  settle  on  railroad  lands. 

Sec.  311.  Contingent  promises. 

Sec.  312.  Improvements  constituting  election  or  raising 
estoppel. 

Sec.  313.  Investigation  of  property,  etc. 

Sec.  314.  Stipulation  in  option  agreement  binding  optionee 
to  perform. 

Sec.  315.  Stipulation  to  repurchase  or  resell. 

Sec.  316.  Same.   Stocks. 

Sec.  317.  Double  agreements. 

Sec.  318.  Option  as  consideration  for  other  contract. 

Sec.  319.  Other  contract  as  consideration  for  option. 

Sec.  320.  Other  contract  not  consideration  for  option. 

Sec.  321.  Leases. 

Sec.  322.  Deposit  and  part  paymeiit  of  price. 

Sec.  323.  Same,  continued.  The  test. 

Sec.  324.  Adequacy. 

Sec.  325.  Nominal  sum  of  money.   Generally. 

See.  326.  Decisions  holding  nominal  sum  of  money  sufficient. 

Sec.  327.  Decisions  holding  nominal  sum  of  money  in- 
sufficient. 


Sec. 

330. 

Sec. 

331. 

Sec. 

332. 

Sec. 

333. 

Sec. 

334. 

viii  LAW  OP   OPTION   CONTRACTS 

Sec.  328.     Nominal  sum  as  consideration.   Oil  and  gas  leases 

and  licenses. 
Sec.  329.     Nominal  sum  as  consideration.   Oil  and  gas  leases 

and  licenses. 
Nominal  sum  as  consideration.   Oil  and  gas  leases, 

continued. 
Recital  of  consideration. 
Seal.    Common  law. 
Seal.     Statutory  modification  rule. 
Extensions. 


CHAPTER  IV. 

STATUTE  OF  FRAUDS. 

Option  contract  for  purchase  of  land. 

Same.    Cases. 

Option  contract  for  sale  of  goods,  wares  and  mer- 
chandise. 

Agreement  not  to  be  performed  within  a  year. 

Contract  or  memorandum  thereof.  Scope  of  statute. 

Contract  or  memorandum  thereof.  Essential  terms 
of  agreement  must  be  in  writing.   Evidence. 
Sec.  407.     Contract  or  memorandum  thereof.   Subscribing  by 

party  "to  be  charged."  Agents. 
Sec.  408.     Modification  of  terms.  Generally. 
Sec.  409.     Extension  of  option  time. 
Sec.  410.     Decisions  holding  parol  extension  invalid. 
Sec.  411.     Decisions  holding  parol  extension  valid. 
Sec.  412.     Extensions.    Estoppel. 
Sec.  413.     Extensions.    Waiver. 

Sec.  414.     Oral  election  or  acceptance.   Requirements  of  par- 
ticular statutes. 
Sec.  415,     Same.    Oral  election  sufficient  in  most  states. 
Sec.  416.     Same.    Mutuality. 

Sec.  417.     Same.  Rights  of  optionor  under  oral  election. 
Sec.  418.     Part  and  full  performance. 
Sec.  419.     Pleading. 


Sec. 

401. 

Sec. 

402. 

Sec. 

403. 

Sec. 

404. 

Sec. 

405. 

Sec. 

406. 

CONTENTS  IX 

CHAPTER  V. 

NATURE  OF  RIGHT  OB  ESTATE  IN  PROPERTY 
UNDER  OPTION. 

Sec.  501.     Generally. 

Sec.  502.  Decisions  holding  optionee  has  no  interest  or 
estate  in  the  property,  prior  to  election. 

Sec.  503.  Decisions  holding  optionee  has  equitable  estate 
prior  to  election.   Kerr  v.  Day. 

Sec.  504.     Kerr  v.  Day,  continued. 

Sec.  505.     Same.    Telford  v.  Frost. 

Sec.  506.     Same.    Other  miscellaneous  cases. 

Sec.  507.  Sale  and  return.  Sale  on  trial  or  approval.  Bail- 
ment.  Generally. 

Sec.  508.     Same.    Miscellaneous  cases. 

Sec.  509.     Judgments.    Executions.    Liens.    Etc. 

Sec.  510.     Mortgages. 

Sec.  511.     Insurable  interest  in  optioned  property. 

Sec.  512.     Right  to  insurance  moneys. 

Sec.  513.     Possession, 

Sec.  514.  Upon  exercise  of  option  to  purchase  equitable  title 
vests  in  optionee. 

Sec.  515.     Bona  fide  purchasers  of  option  property.    Notice. 

Sec.  516.     Rights  under  junior  and  senior  options. 

See.  517.     Equitable  conversion. 

Sec.  518.     Dividends  on  corporate  stock. 

Sec.  519.     Rents. 

Sec.  520.     Right  to  coal  mined.   Profits  made,  etc. 


CHAPTER  VI. 

ASSIGNMENT. 

See.  601.  Common  law  and  equity  rules. 

Sec.  602.  Assignability  before  election. 

Sec.  603.  Assignability  after  election. 

Sec.  604.  Option  personal  to  optionee. 


Sec. 

605. 

Sec. 

606. 

Sec. 

607. 

Sec. 

608. 

Sec. 

609. 

LAW   OF    OPTION    CONTRACTS 

Express  words  of  assignability. 

Death  or  insanity. 

Leases    containing    options.     Covenants    running 

with   land. 
Estoppel  and  waiver. 
Effect   of   assignment.     Rights  and   liabilities   of 

parties. 
Sec.  610.    Miscellaneous  cases. 


CHAPTER  VII. 

DISCHARGE   OF   OPTION   CONTEACT. 

Sec.  701.  Generally. 

See.  702.  Breach  by  optionor  prior  to  election. 

Sec.  703.  Withdrawal  or  revocation.  Offer  and  option  dis- 
tinguished. 

Sec.  704.  Withdrawal  or  revocation.  Communication  of 
notice  necessary. 

Sec.  705.  What  constitutes  revocation.    Notice  thereof. 

Sec.  706.  Same.   Cases. 

Sec.  707.  Expiration  of  time  limit. 

Sec.  708.  Reservation  of  right  to  terminate. 

Sec.  709.  Death  or  insanity.    Bankruptcy. 

Sec.  710.  Abandonment.   Surrender. 

Sec.  711.  Renunciation, 

Sec.  712.  Rescission. 

Sec.  713.  Substitution  of  new  contract  or  of  new  term. 

Sec.  714.  Breach  by  optionee  prior  to  election. 

Sec.  715.  Same.  Failure  to  pay  rent  as  discharge  of  option 
in  lease. 

Sec.  716.  Same.    Miscellaneous  covenants  and  agreements. 

Sec.  717.  Same.    Waiver  of  optionee's  breach. 

Sec.  718.  Conditional  election. 

Sec.  719.  Election. 


CONTENTS  Zl 

CHAPTER  VIII. 

ELECTION  AND  NOTICE. 

Sec.  801.     Generally. 

Sec.  802.     By  whom  election  must  be  made. 

Sec.  803.     Same.    Agent. 

Sec.  804.     Same.    Assignee. 

Sec.  805.     Joint  or  several  optionees. 

Sec.  806,     Same,  continued.    Decisions. 

Sec.  806a.  Same.    Partners. 

Sec.  807.     Same.    Partners.    Change  in  membership. 

Sec.  808.     Same.    Representative  of  deceased  optionee. 

Sec.  809.     To  whom  notice  must  be  given.    Optionor.   Agent. 

Sec.  810.     Same.    Grantee  of  optionor. 

Sec.  811.     Same.    Joint  or  several  optionors. 

Sec.  812.  Same.  Representative  of  deceased  optionor. 
Minors. 

Sec.  813.     Elements  of  election. 

Sec.  814.     The  election  must  be  communicated. 

Sec.  815.     Terms  of  option  control  mode  of  election. 

Sec.  816.     "Written  or  oral  election  or  acceptance. 

Sec.  817.     Communication  of  election  by  act. 

Sec.  818.     Communication  of  election  by  post  or  telegraph. 

Sec.  819.     Same,  continued. 

Sec.  820.     Place  of  election  or  acceptance. 

Sec.  821.     Election  must  be  definite. 

Sec.  822.     Election  as  to  part  of  the  property. 

Sec.  823.  Particular  act  as  election  or  acceptance.  Gen- 
erally. 

Sec.  824.  Particular  act  as  election  or  acceptance.  State- 
ments and  conversations. 

Sec.  825.  Particular  act  as  election  or  acceptance.  Lettei-s 
and  other  writings. 

Sec.  826.  Particular  act  as  election  or  acceptance.  Ordi- 
nances by  municipalities,  etc. 

Sec.  827.  Particular  act  as  election  or  acceptance.  Possession 
and  improvements. 


Xll  LAW   OF    OPTION    CONTRACTS 

Sec.  828.  Particular  act  as  election  or  acceptance.  Sale  and 
return.  Sale  on  trial  or  approval.  Bailment. 
Generally. 

Sec.  829,  Particular  act  as  election  or  acceptance.  Agree- 
ments to  repurchase.    Alternative  stipulation. 

Sec.  830.  Particular  act  as  election  or  acceptance.  Sale  on 
trial  or  approval.    Bailment. 

Sec.  831.  Particular  act  as  election  or  acceptance.  Renewal 
or  extension  of  lease. 

Sec.  832.  Particular  act  as  election  or  acceptance.  Rule 
where  lessee  holds  over  and  pays  higher  or 
different  rental. 

Sec.  833.  Particular  act  as  election  or  acceptance.  Rule 
where  same  rental  is  paid.    Renewals. 

Sec.  834.  Particular  act  as  election  or  acceptance.  Rule 
where  same  rental  is  paid.    Extensions. 

Sec.  835.  Particular  act  as  election  or  acceptance.  Rule 
where  written  or  formal  notice  is  provided 
for  or  implied  or  the  mode  of  communication 
is  prescribed. 

Sec.  836.  Particular  act  as  election  or  acceptance.  Failure 
of  lessee  to  give  notice  to  terminate  the  lease. 
Also  lessor's  option. 

Sec.  837.  Election  varying  terms  of  offer  or  option.  Gen- 
erally. 

Sec.  838.  Effect  of  conditional  acceptance  or  election.  Dis- 
tinction between  acceptance  of  offer  and  elec- 
tion under  option. 

Sec.  839.     Election  and  performance  distinguished. 

Sec.  840.     Election  varying  terms  of  option.    Cases. 

Sec.  841.     Conditional  elections.    Cases. 

Sec.  842.     Same.    Continued. 

Sec.  843.     Unconditional  election.    Turner  v.  McCormick. 

Sec.  844.     Unconditional  election.    Kreutzer  v.  Lynch. 

Sec.  845.     Unconditional  election.    Horgan  v.  Russell. 

Sec.  846.     Unconditional  election.    McCormick  v.   Stephany. 

Sec.  847.     Unconditional  elections.    Other  cases. 

Sec.  848.     Time  of  election.    Generally. 

Sec.  849.     Specified  time.    Generally. 

Sec.  850.     Specified  time.    Construction.    Generally. 


CONTENTS  Xlll 

Sec.  851.  Specified  time.  Construction.  "Expiration" 
clauses. 

Sec.  852.     Same.    Leases  and  renewals. 

Sec.  853.     Same.    Option  to  sell  or  repurchase. 

Sec.  854.     Alternative  stipulations. 

Sec.  855.     Same.    Clause  reserving  to  optionor  right  to  sell. 

Sec.  856.     Reasonable  time.    Generally. 

Sec.  857.     Reasonable  time.    Construction. 

Sec.  858.     Reasonable  time.    Construction,  continued. 

Sec.  859.     Extension  of  time  to  elect.    Generally. 

Sec.  860.     Extension  of  time  to  elect.    Agreement  for. 

Sec.  861.     Same.    Cases. 

Sec.  862.     Time  as  essence  of  election. 

Sec.  863.     Election.    Equitable  relief  to  optionee.   Generally. 

Sec.  864.  Election.  Equitable  relief.  Accident  and  act  of 
God. 

Sec.  865.     Election.    Equitable  relief.    Mistake, 

Sec.  866.  Election.  Equitable  relief.  Miscellaneous  cases 
granting  relief. 

Sec.  867.  Election.  Equitable  relief.  Miscellaneous  cases 
denying  relief. 

Sec.  868.     Election.    "Waiver  and  estoppel. 

Sec.  869.  Waiver  and  estoppel.  Cases  holding  acts  consti- 
tute waiver. 

Sec.  870.  "Waiver  and  estoppel.  Cases  holding  acts  not 
waiver. 

Sec.  871.     Effect  of  sufficient  or  insufficient  election. 

Sec.  872.     Same.   Miscellaneous  cases. 


CHAPTER  IX, 

PAYMENT  AND   TENDER. 

Generally. 

By  whom  payment  or  tender  may  be  made. 

To  whom  payment  or  tender  may  be  made. 

Place  of  payment  or  tender. 

Place  of  payment  or  tender,  continued. 

Sufficiency  of  tender. 


Sec. 

901. 

Sec. 

902. 

Sec. 

903. 

Sec. 

904. 

Sec. 

905. 

Sec. 

906. 

XIV  LAW   OF   OPTION    CONTRACTS 

Sec.  907.     Sufficiency  of  tender,  continued.    Cases. 

Sec.  908.     Amount  of  payment  or  tender.    Generally. 

Sec.  909.     Amount  of  payment  or  tender.      Interest,   taxes, 

rents,  insurance,  etc. 
Sec.  910.     Amount  of  payment  or  tender.    The  same. 
Sec.  911.     Amount  of  payment  or  tender  under  arbitration 

and  valuation  clauses. 
Sec.  912.     Failure  to  object  as  waiver  of  form,  mode  and 

amount. 
Sec.  913.     Time  of  payment.    Generally.     (Fixed  time.) 
Sec.  914.     Time  of  payment.     Payment    as    election    distin- 
guished from  payment  as  performance. 
Sec.  915.     Same.    Cases  holding  payment  not  necessary  to 

election. 
Sec.  916,     Same.   Cases  holding  payment  or  tender  necessary 

to  election. 
Sec.  917.     Same,  continued. 
Sec.  918.     Time    of    payment.     Construction    of    particular 

clauses. 
Sec.  919.     Time  of  payment  not  of  the  essence,  when. 
Sec.  920.     Time  of  payment  essential.    Generally. 
Sec.  921.     Same.    Delivery  of  deed  and  payment  of  price  as 

concurrent  acts. 
Sec.  922.     Same.    Delivery  of  deed  and  payment  of  price  as 

concurrent  acts,  continued. 
Sec.  923.     Time  of  payment.   Waiver  and  estoppel. 
Sec.  924.     Waiver  and  estoppel.    Payment  considered  as  act 

of  election. 
Sec.  925.     Same.   Cases  holding  payment  or  tender  necessary. 
Sec.  926.     Same.    Cases  holding  payment  or  tender  not  nec- 
essary. 
Sec.  927.     Time  of  payment.   Waiver,   Nature  and  essentials 

of  acts  to  constitute. 
Sec.  928.     Time  of  payment.   Waiver  and  estoppel.    Conduct 

of  optionor.    Generally. 
Sec.  929.     Same,  continued. 
Sec.  930.     Time  of  payment.    Waiver  and  estoppel.    Refusal 

and  repudiation  by  optionor.    Generally. 
Sec.  931.     Time  of  payment.    Waiver  by  accepting  past  due 

payments. 


Sec. 

934. 

Sec. 

935. 

Sec. 

936. 

Sec. 

937. 

Sec. 

938. 

Sec. 

939. 

CONTENTS  XV 

Sec.  932.     Time    of    payment.     "Waiver    by    recognition    of 

optionee's  rights. 
Sec.  933.     Time  of  payment.    Waiver  and  estoppel.    Evasion 
by  optionor  and  absence. 
Time  of  payment.    "Waiver  arising  under  options 

like  "first  refusals." 
Time  of  payment.    "Waiver  by  one  joint  optionor. 
Time    of    payment.     Waiver.     Effect    of    encum- 
brances, dower  right,  etc. 
Time  of  payment.    Death  of  optionor. 
Time  of  payment.    Accident  and  mistake. 
Time  of  payment.    Waiver  under  agreement  for 
extension. 
Sec.  940.     Time  of  payment.    Waiver.    Effect  of  possession 

and  improvements  by  optionee. 
Sec.  941.     Time  of  payment.    Waiver.    Effect  of  part  per- 

formance. 
Sec.  942.     Time  of  payment.    Tender  in  pleadings  and  mis- 
cellaneous cases. 
Sec.  943.     Effect  of  payment  or  tender. 


CHAPTER  X. 

CONVEYANCE  OF   TITLE. 

Sec.  1001.     Generally. 

Sec.  1002.  Tender  of  deed.  Whether  duty  on  optionor  or 
optionee. 

Sec.  1003.  Time  of  conveyance.  Payment  of  price  and  execu- 
tion of  deed  as  mutual  and  dependent  cove- 
nants. 

Sec.  1004.     Form  and  sufficiency  of  deed. 

Sec.  1005.     Title  and  sufficiency. 

Sec.  1006.     Encumbrances. 

Sec.  1007.     Approval  of  title  by  optionee  or  by  his  attorney. 

Sec.  1008.     Abstracts,  certificates  and  surveys. 


XVI  LAW   OF    OPTION    CONTRACTS 

CHAPTER  XL 

REMEDIES. 

Sec.  1101.     Remedies  of  optionor.    Generally. 

Sec.  1102.     Remedies  of  optionee.    Generally. 

Sec.  1103,     Breach  of  contract.  Failure  to  elect  is  not  breach. 

Sec.  1104.  Right  of  optionee  to  recover  damages  without 
electing  where  optionor  breaches  during  time 
limit. 

Sec.  1105.     Option  cases  involving  sale  and  return. 

Sec.  1106.  Option  cases  involving  expired  options  and  un- 
accepted offers. 

Sec.  1107.     Cases  involving  options  to  sell. 

Sec.  1108.  Option  cases  involving  application  of  payments 
as  rent. 

Sec.  1109.     Option  cases  involving  title. 

Sec.  1110.     Option  cases  involving  fraud. 

Sec.  1111.     Option  cases  involving  liquidated  damage  clauses. 

Sec.  1112.     Option  cases  involving  forfeiture  clauses. 

Sec.  1113.     Option  cases  involving  "null  and  void"  clauses. 

Sec.  1114.  Option  cases  involving  liability  of  telegraph  com- 
pany for  negligent  transmission  of  telegrams. 

Sec.  1115.  Miscellaneous  cases  involving  actions  under 
options. 

Sec.  1116.  Action  by  vendor  for  price  under  bilateral  con- 
tract. Real  property. 

Sec.  1117.  Action  by  vendor  for  damages  under  bilateral 
contract.   Rule  of  damages. 

Sec.  1118.  Action  by  purchaser  for  damages  under  bilateral 
contract.    Rule  of  damages. 

Sec.  1119.  Action  for  breach  of  bilateral  contract.  Personal 
property.   Rules  of  damages. 

Sec.  1120.     Pleading. 

Sec.  1121.     Practice. 

Sec.  1122.     Evidence. 

Sec.  1123.     Ejectment. 


CONTENTS  XVU 


Sec.  1124,     Suit  to  quiet  title  (remove  cloud). 
Sec.  1125.     Detainer. 
Sec.  1126.    Injunction. 


CHAPTER  XII. 

SPECIFIC  PERFORMANCE. 

Generally. 

The  subject  of  specific  performance  is  the  bilat- 
eral contract  and  not  the  option. 

Discretion  of  the  court. 

Equitable    essentials    for    specific    performance. 
Generally. 

Inadequacy  of  consideration.    Seal. 

Statute  of  frauds. 

Statute  of  frauds.    Part  performance. 

Same,    Same.    Cases. 

Inadequacy  of  remedy  at  law.    Options  on  land. 

Inadequacy  of  remedy  at  law.    Options    on  per- 
sonal chattels.    Shares  of  stock. 

Option  in  leases. 

Arbitration  clauses. 

Valuation  clauses. 

Mutuality,    Meaning  of. 

Mutuality,    Application  of  rule  to  option  con- 
tracts. 

Distinction  between  mutuality  of  remedy  and  of 
obligation. 

Same,  continued.    The  option  contract. 

Same,  continued.    The  bilateral  contract.    Mutu- 
ality of  obligation  means  consideration. 

Mutuality.    Old  rule.   Cooke  v.  Oxley. 

Mutuality.    Old  rule. 

Mutuality.    Old  rule  modified.    Boucher  t.  Van 
Buskirk,  and  other  Kentucky  ca.ses. 
Sec,  1222.     Mutuality.    Benedict  v.  Lynch  and  other  New 
York  cases. 


Sec. 

1201. 

See, 

1202. 

Sec. 

1203. 

Sec. 

1204. 

Sec. 

1205. 

Sec. 

1206. 

Sec. 

1207. 

Sec. 

1208. 

Sec. 

1209. 

Sec. 

1210, 

Sec. 

1211, 

Sec. 

1212, 

Sec. 

1213. 

Sec. 

1214. 

Sec. 

1215. 

Sec. 

1216. 

Sec. 

1217. 

Sec. 

1218. 

Sec. 

1219. 

Sec. 

1220. 

Sec. 

1221. 

Xviii  LAW   OF    OPTION    CONTRACTS 

Sec.  1223.     Mutuality.  Old  rule  modified.  Graybill  v.  Braugh, 

and  other  Virginia  cases. 
Sec.  1224.     Mutuality.  Options  and  offers.  Modern  and  estab- 
lished rule.    Generally. 
See.  1225.     Mutuality.    Modern   and   established  rule.    Ala- 
bama.  Arkansas. 
Sec.  1226.     Mutuality.    Modern  and  established  rule.    Cali- 
fornia.   Colorado. 

Sec.  1227.  Mutuality.  Modern  and  established  rule.  Georgia. 
Illinois. 

Sec.  1228.  Mutuality.  Modern  and  established  rule.  Indi- 
ana.   Kansas.    Iowa.    Louisiana.    Maryland. 

Sec.  1229.  Mutuality.  Modem  and  established  rule.  Massa- 
chusetts. 

Sec.  1230.  Mutuality.  Modern  and  established  rule.  Michi- 
gan. Minnesota.  Missouri.  Montana.  Ne- 
braska. Nevada.  New  Mexico.  North  Dakota. 

Sec.  1231.  Mutuality.  Modern  and  established  rule.  New 
Jersey. 

Sec.  1232.  Mutuality.  Modern  and  established  rule.  North 
Carolina.    Ohio.    Oregon. 

Sec.  1233.  Mutuality.  Modern  and  established  rule.  Penn- 
sylvania. Rhode  Island.  South  Carolina. 
Tennessee. 

Sec.  1234.  Mutuality.  Modern  and  established  rule.  Vir- 
ginia. West  Virginia.  Washington.  Wiscon- 
sin.   Wyoming.    Federal  decisions. 

Sec.  1235.     Mutuality.    Miscellaneous  cases. 

Sec.  1236.  Mutuality.  Summary  of  decisions.  Election 
raises  contract  having  mutuality  of  obligation, 
and  as  a  rule,  mutuality  of  remedy. 

Sec.  1237.     Mutuality.    So-called.    Exceptions  to  rule. 

Sec.  1238.     Persons  entitled  to  specific  performance. 

Sec.  1239.     Necessary  and  proper  parties.    English  rule. 

Sec.  1240.     Necessary  and  proper  parties.     Prevailing  rule. 

Sec.  1241.     Parties  plaintiff. 

Sec.  1242.     Parties  defendant. 

Sec.  1243.     Parties.     Dower  and  homestead  rights  of  wife. 

Sec.  1244.     Complaint  or  bill. 

Sec.  1245.     Reformation  of  contract. 


CONTENTS  XIX 

Sec.  1246.  Demurrer.     Cross  complaint.     Answer. 

Sec.  1247.  Damages  in  lieu  of  or  as  incident  to  specific  per- 
formance. 

Sec.  1248.  Defenses. 

Sec.  1249.  Defenses.    Increase  or  decrease  in  value. 

Sec.  1250.  Laches. 

Sec.  1251.  Time  to  sue. 

Sec.  1252.  Statute  of  limitations. 

Sec.  1253.  Evidence. 

Sec.  1254.  Decree. 


CHAPTER  XIII. 

APPENDIX  OP  FORMS. 

Sec.  1301.     Author's  statement. 

Sec.  1302.     Assignment  by  endorsement  on  option. 

Sec.  1303.     Assignment  of  option. 

CAPITA!.  STOCK  AND  BONDS  OP  CORPORATIONS,  OPTIONS  ON. 

Sec.  1304.  Option  to  purchase  shares  of  capital  stock  of  cor- 
poration, payment  of  part  of  price  deferred. 

Sec.  1305.  Option  to  purchase  capital  stock,  assets,  fixtures, 
good  will,  etc.,  of  importing  company. 

Sec.  1306.  Option  or  "refusal"  on  capital  stock  at  a  price 
as  low  as  any  other  bona  fide  offer. 

Sec.  1307.  Option  to  seller  to  repurchase,  giving  him  the  first 
refusal. 

Sec.  1308.  Clauses  of  agreement  by  vendor  to  repurchase 
shares  at  option  of  purchaser  at  purchase  price 
and  interest  thereon,  and  notice  of  election 
thereunder. 

Sec.  1309.  Option  to  purchaser  to  return  bonds  and  receive 
back  price  paid. 

Sec.  1310.  Option  clause  to  majority  of  stockholders  to 
appraise  and  purchase  shares  of  stockholders 
becoming  undesirable  associates,  etc. 

Sec.  1311.  Option  provisions  of  agreement  to  purchase  shares 
of  deceased  stockholder. 


XX  LAW   OF    OPTION    CONTRACTS 

Sec.  1312.  Option  provisions  of  agreement  among  stockhold- 
ers of  corporation  giving  option  to  remaining 
or  surviving  stockholders  to  purchase  shares 
of  stockholders  desiring  tt>  sell,  or  dying,  with 
provision  for  valuation  by  appraisers  to  be 
appointed  by  the  parties. 

Sec.  1313.  Option  by  stockholders  to  sell  their  shares  and 
interest  in  business  of  corporation  to  promoter 
of  a  consolidation. 

Sec.  1314.  Provision  of  articles  of  incorporation  giving  the 
corporation  the  first  refusal  on  shares  of  origi- 
nal subscribers  desiring  to  sell. 

Sec.  1315.  Agreement  for  sale  and  purchase  of  options  in 
exchange  for  bonds  of  corporation  to  be  organ- 
ized, and  on  condition  that  the  corporation 
shall  be  organized. 

CHATTEL  MORTGAGE,   OPTION   CLAUSES   IN. 

Sec.  1316.  Chattel  mortgage — Option  to  mortgagee  to  mature 
debt  upon  default  by  mortgagor  in  payment 
of  principal  or  interest ;  if  the  mortgagee  sells ; 
or  removes  the  chattels;  or  if  any  writ  shall 
be  levied;  or  if  the  mortgagee  deems  himself 
insecure. 

Sec.  1317.     Chattel  mortgage — Insecurity  clause. 

Sec.  1318.  Chattel  mortgage — Insecurity  clause.  Another 
form. 

See.  1319.     Chattel  mortgage — Insecurity  and  interest  clauses. 

Sec.  1320.  Chattel  mortgage — Insecurity,  sale,  and  removal 
clauses. 

Sec.  1321.  Chattel  mortgage — Clause  giving  option  to  mort- 
gagee to  mature  debt  if  mortgagor  attempts  to 
dispose  of,  or  remove  property. 

Sec.  1322,     Chattel  mortgage — Tax  and  assessment  clauge. 

LEASES,  OPTION  CLAUSES  IN. 

Sec.  1323.     Lease  of  land  with  option  to  purchase  and  pro- 
vision as  to  improvements. 
Sec.  1324.     Lease  and  option  to  lessee  to  purchase. 


CONTENTS  XXI 

Sec.  1325.  Lease  of  land  with  option  to  purchase,  with  pro- 
vision extending  covenants  to  heirs,  executors 
and  administrators  of  the  parties. 

Sec.  1326.  Agreement  to  execute  lease  of  land  for  ninety- 
nine  years  with  option  to  lessee  to  purchase. 

Sec.  1327.  Option  in  lease  giving  the  lessee  the  right  to  pur- 
chase and  also  giving  the  lessor  the  right  or 
option  of  repurchase  on  certain  contingencies. 

Sec.  1328.  Option  clause  in  lease  giving  the  lessor  the  right 
to  take  buildings  of  lessee,  at  a  price  to  be 
fixed  by  three  valuers,  and  if  not  taken  the 
lease  to  be  renewed  for  another  term. 

Sec.  1329.  Clause  in  lease  requiring  lessee  to  erect  building 
and  lessor  "to  take"  the  building  at  end  of 
term,  at  its  value  to  be  determined  by  three 
appraisers,  and  further  providing  that  if  lessor 
shall  elect  to  renew  for  a  further  term,  the 
building  erected  shall  belong  to  lessor. 

Sec.  1330.  Agreement  for  lease  with  covenant  by  lessee  to 
erect  buildings  and  with  option  to  lessor  to 
extend  lease  in  perpetuity,  or  to  purchase  the 
building  at  the  appraised  value,  or  to  sell  the 
lot  to  the  lessee  at  the  appraised  value,  with 
provisions  for  appraisement. 

Sec.  1331.  Option  in  lease  for  extension  upon  notice,  and 
option  to  lessee  to  purchase  with  provision  as 
to  rents. 

Sec.  1332,     Option  to  lessee  to  extend  lease. 

Sec.  1333.  Lease  with  option  to  lessee  to  renew,  with  provis- 
ion against  second  renewal. 

Sec.  1334:.  Option  in,  to  renew  annually  for  four  successive 
years,  with  provision  reserving  the  right  to  the 
lessor  to  sell  the  premises. 

MINING  OPTIONS. 

Sec.  1335.     Option  on  mineral  rights  in  land. 
Sec.  1336.     Option  to  purchase  coal  in  certain  land. 
Sec.  1337.     Option  to  purchase  fifty-one  per  cent  of  gold 
mining  claim. 


XXll  LAW   OP   OPTION    CONTRACTS 

Sec.  1338.  Agreement  to  give  option  on  capital  stock  to  syn- 
dicate which  agrees  to  do  exploration  work 
on  mines. 

Sec.  1339.  Oil  and  gas  lease  with  option  to  lessee  to  surren- 
der or  terminate. 

Sec.  1340.     Lease  in  form  held  mere  option. 

MORTGAGES  ON  REAL  ESTATE,  OPTIONS  IN. 

Sec.  1341.  Clause  in  mortgage  maturing  debt,  at  option  of 
mortgagee,  for  failure  to  pay  principal  or 
interest. 

Sec.  1342.  Option  to  mortgagee  to  mature  debt  upon  default 
by  mortgagor  in  payment  of  principal  or 
interest,  in  case  of  waste,  failure  to  pay  taxes, 
or  to  procure  or  renew  insurance,  etc. 

Sec.  1343.  Option  in  note  secured  to  accelerate  maturity, 
upon  default  in  payment  of  interest,  taxes,  etc. 

NOTICE  OP  ELECTION  TO  PURCHASE. 

Sec.  1344.     General  form. 

OPTIONS  ON  REAL  ESTATE. 

General  form  of  option  to  purchase  real  estate. 

Informal  option  on  land. 

Offer  to  sell  in  form  of  letter. 

Option  to  purchase  land  with  special  stipulation 

as  to  breach. 
Option  on  lands.   General  description  of  land. 
Option  on  farm  and  all  property  thereon  except 

live  stock. 
Sec.  1351.     Option  to  purchase  land  with  clause  giving  right 

to  have  deed  made  direct  to  purchaser  from 

optionee,  and  providing  for  mortgage  to  secure 

deferred  payments  of  price  evidenced  by  note. 
Sec.  1352.     Option  on  land  taking  form  of  deposit  of  deed  of 

conveyance  with  bank. 
Sec.  1353.     Option  to  purchase  or  to  lease  with  permission  for 

erection  of  building. 


Sec. 

1345. 

See. 

1346. 

Sec. 

1347. 

Sec. 

1348. 

Sec. 

1349. 

Sec. 

1350. 

CONTENTS  Xxiii 

Sec.  1354.  Agreement  to  purchase  fruit  on  trees,  with  option 
to  purchase  the  land,  improvements  thereon, 
and  water  rights,  part  of  price  deferred  and 
secured  by  mortgage. 

Sec.  1355.  Agreement  by  A  to  repurchase  land  conveyed  by 
him  to  B  in  consideration  for  or  in  payment  of 
shares  of  capital  stock  sold  by  B  to  A,  the 
repurchase  being  at  the  option  of  B,  with  pro- 
vision against  assignment  by  B. 

Sec.  1356.  Option  to  purchase  and  agency  to  sell  on  commis- 
sion, the  optionor  binding  himself  to  convey  in 
penal  sum  with  provision  that  if  optionor  fails 
to  notify  optionee,  the  option  shall  be  renewed 
for  one  year. 

Sec.  1357.  Agreement  combining  option  to  purchase  and 
agency  to  sell  on  commission. 

Sec.  1358.     Agreement  held  agency  to  sell  and  not  option. 

Sec.  1359.  Option  agreement  for  property  to  be  taken  over 
by  proposed  corporation. 

Sec.  1360.  Option  to  purchase  land,  the  price  payable  in 
bonds  of  warehouse  corporation,  the  issuance 
of  which  is  to  be  authorized  by  Railroad  Com- 
mission. 

Sec.  1361.  Option  to  purchase  with  provision  against  record- 
ing option  but  providing  for  deposit  of  it  with 
third  person,  and  upon  failure  to  give  notice 
of  election,  to  be  surrendered  for  cancellation. 

Sec.  1362.  Option  clause  requiring  written  notice  of  election 
and  tender  of  price  on  delivery  of  deed  of 
conveyance. 

MISCELLANEOUS. 

Sec.  1363.     Will,  option  in,  giving  legatee  right  to  purchase. 


CHAPTER  I. 

DEFINITION,  NATUEE,  INTEEPRETATION  AND 
CHARACTERISTICS. 

Sec.  101.     Definition. 

Sec.  102.     Nature  and  characteristics. 

Sec.  103.     Option  distinguished  from  offer. 

Sec.  104.     Option  distinguished  from  offer.  Cases. 

Sec.  105.     Option  distinguished  from  sale. 

Sec.  106.     Option  distinguished  from  sale.  Cases.  Offers  and  options. 

Sec.  107.  Option  distinguished  from  sale.  Cases  continued.  Offers  and 
options. 

Sec.  108.     Option  distinguished  from  agreement  of  sale.   Sales. 

Sec.  109.  Option  distinguished  from  agreement  of  sale.  (Penalty,  forfei- 
ture and  liquidated  damage  clauses.) 

Sec.  110.  Option  distinguished  from  agreement  of  sale.  (Provisions  foi 
terminating  agreement,  etc.) 

Sec.  111.  Option  to  purchase  distinguished  from  option  to  return. 

Sec.  112.  Same.  Cases. 

Sec.  113.  Option  distinguished  from  lease. 

Sec.  114.  Option  distinguished  from  agency. 

Sec.  115.  Option  distinguished  from  mortgage  or  deed. 

Sec.  116.  Option  distinguished  from  other  kinds  of  contracts.     Miscel* 

laneous. 

Sec.  117.  Option  to  terminate  contract. 

Sec.  118.  Alternative  stipulation. 

Sec.  119.  Option  to  mature  chattel  mortgages. 

Sec.  120.  Option  to  mature  debt  secured  by  real  estate  mortgage. 

Sec.  121.  Same.  Exercise  of  option.  Waiver. 

Sec.  122.  Interpretation.    Rules  of  construction. 

Sec.  123.  Interpretation.    Rules  of  evidence. 

Sec.  124.  Interpretation,    Miscellaneous. 
1— Option  Contracts.  (1) 


§  101  LAW  OP  OPTION  CONTRACTS  2 

Section  101.  DEFINITION.— An  option  to 
purchase  is  a  contract  supported  by  a  considera- 
tion, or  in  some  jurisdictions,  a  writing  under  seal, 
by  which  one  party,  called  optionor,  sells  to  another 
party,  called  optionee,  the  right,  at  the  election  of 
the  latter,  to  purchase  certain  described  property, 
for  the  price,  and  upon  the  terms  and  conditions 
of  the  option  contract.^ 

1  See  Snider  v.  Yarbrough,  43  Mont.  203,  115  P.  411;  Winders  v.  Kenan, 
161  N.  C.  628,  77  S.  E.  687;  Tilton  v.  Sterling,  28  Utah  173,  77  P. 
758,  107  Am.  Eep.  689;  Swift  v.  Erwin,  104  Ark.  459,  148  S.  W. 
267;  Montgomery  v.  Hundley,  205  Mo.  138,  103  S.  W.  527. 

An  option  contract  to  purchase  has  been  variously  defined  or  described 
by  the  courts  as  follows:  A  right  by  election  in  the  optionee  to 
exercise  a  privilege,  Hopwood  v.  McCausland,  120  Iowa  218,  94 
N.  W.  469;  Winslow  v.  Dundom,  46  Mont.  71,  125  P.  136. 

A  right  of  choice  or  election,  Montgomery  v.  Hundley,  205  Mo.  138,  103 
S.  W.  527. 

A  proposition  by  the  owner  of  land  to  sell  it.  Hardy  v.  Ward,  150  N.  C. 
385,  64  S.  E.  171. 

A  contract  by  which  the  ovraer  merely  sells  the  right  or  privilege  to  buy 
at  the  election  of  the  other  party.  Hamburger  v.  Thomas  (Tex.  Civ. 
App.),  118  S.  W.  770;  Montgomery  v.  Waldeck,  2  Alaska  581. 

A  continuing  offer,  Caldwell  v.  Frazier,  65  Kan.  24,  68  P.  1076 ;  Napier 
V.  Darlington,  70  Pa.  64. 

An  obligation  by  which  one  binds  himself  to  sell  and  leaves  it  to  the 
discretion  of  the  other  party  to  buy.  Black  v.  Maddox,  104  Ga.  157, 
30  S.  E.  723;  Simpson  v.  Sanders,  130  Ga.  265,  60  S.  E.  541. 

A  contract  to  leave  open  an  offer  to  sell  something  for  a  certain  time, 
Adams  v.  Peabody  Coal  Co.,  230  111.  469,  82  N.  E.  645 ;  Ide  v.  Leiser, 
10  Mont.  5,  24  P.  695,  24  A.  S.  R.  17;  Eaddle  v.  Lindemann,  151 
HI.  App.  441;  Peterson  v.  Chase,  115  Wis.  239,  91  N.  W.  687. 

A  unilateral  agreement  containing  the  terms  and  conditions  upon  which 
the  vendor  agrees  to  sell  and  convey  his  land,  not  yet  ripened  into  an 
absolute  contract  to  sell  and  convey,  on  one  side  and  to  purchase 
and  pay  on  the  other,  Barnes  v.  Hustead,  219  Pa.  287,  68  Atl.  839. 

An  unaccepted  offer  to  sell  and  convey  within  the  time  and  upon  the  con- 
ditions set  forth  in  the  option  contract,  Barnes  v.  Eea,  219  Pa.  279, 
68  Atl.  836. 

A  conditional  agreement  to  convey,  Page  v.  Martin,  46  N.  J.  Eq.  585, 
20  Atl.  46,  48. 


3  DEFINITION  §  101 

An  option  to  sell  differs  from  an  option  to  pur- 
chase in  that  the  right  of  election  is  with  the 
seller.^ 

An  option  to  return  is  an  agreement  whereby  the 
purchaser  is  given  the  privilege  of  returning  the 
property  to  the  seller,  or  if  the  title  has  passed,  of 
rescinding  the  sale,  on  certain  specified  condi- 
tions.^ These  agreements  assume  various  forms, 
the  most  common  being  sale  on  trial  or  approval/ 

Another  common  form  is  the  option  to  repur- 
chase. This  arises  out  of  a  transaction  whereby 
property  is  sold  and  the  seller  is  given  an  option 
to  repurchase  the  same  property  from  the  pur- 
chaser.^ This  option  is  sometimes  spoken  of  as 
redemption. 

1  An  exclusive  privilege  to  buy,  Benedict  v.  Pincus,  191  N.  Y.  377,  84 
N.  E.  284. 

The  sale  of  the  power  to  withdravr  an  offer  to  sell  property,  or  to  retract 
a  promise  to  keep  the  offer  open  for  the  time  limited,  Patterson  v. 
Farmington  St.  Ry.  Co.,  76  Conn.  628,  57  Atl.  853. 

A  contract  by  which  the  owner  of  property  for  a  limited  time  parts 
with  his  right  to  sell  to  another  person  during  such  time,  and  gives 
the  optionee  the  exclusive  right  to  purchase  during  that  time.  Pollock 
V.  Brookover,  60  W.  Va.  75,  53  S.  B.  795,  6  L.  E.  A.  (N.  S.)  403. 
The  privilege  by  the  optionee  of  choosing  whether  or  not  he  will  perform 
or  claim  performance  of  the  contract  by  the  optionor,  Pittsburg,  etc. 
Co.  V.  Bailey,  76  Kan.  42,  90  P.  803. 

A  mere  pollicitation  not  yet  ripened  into  a  perfect  commutative  contract, 
Schlieder  v.  Dielman,  44  La.  Ann.  462,  10  So.  934;  Rivers  v.  Sugar 
Co.,  52  La.  Ann.  762,  27  So.  118;  Kirby  etc.  Co.  v.  Burnett,  114  Fed. 
635,  75  C.  C.  A.  437. 
2McFarland  v.  McCormiek,  114  Iowa  368,  86  N.  W.  369;  Hollis  v.  Libby, 
101  Me.  302,  64  Atl.  621;  Owensboro  Wagon  Co.  v.  H.  L.  Riggan  & 
Co.,  151  N.  C.  303,  66  S.  E.  126;  Park  v.  Whitney,  148  Mass.  278, 
19  N.  E.  161;  Pearce  v.  Turner,  150  111.  116,  36  S.  E.  962;  Pursley 
V.  Good,  94  Mo.  App.  382,  68  S.  W.  218;  Raiche  v.  Morrison,  47 
Mont.  127,  130  P.  1074;  Vickery  v.  Maier,  164  Cal.  384,  129  P.  273. 

3  See  Sec.  111. 

4  See  Sees.  828-830. 

5  See  Sec.  829. 


§  102  LAW   OP  OPTION   CONTRACTS  4 

A  bailment  of  personal  property  with  option  to 
purchase  combines  the  ordinary  contract  of  bail- 
ment with  an  option  to  purchase  the  property 
bailed.'' 

Right  of  *' pre-emption"  frequently  found  in 
leases,  is  construed  **to  express  the  idea  that  some 
one  has  the  first  right  to  purchase  when  the  land 
is  offered  for  sale,  or  the  option  of  buying  first,*' 
thus  giving  it  the  same  meaning  as  ''first  refusal" 
or  ''preferential  right"  to  purchase/ 

The  option  contract  assumes  various  forms.  It 
is  found  in  leases  giving  the  lessee  the  right  to 
renew  or  extend  the  term;  in  contracts  generally 
giving  one  or  either  of  the  parties  the  right  to 
terminate  the  contract;  in  oil  and  mining  leases 
giving  the  lessee  the  option  to  improve  and  work 
the  property  or  to  pay  a  stipulated  rental  in  lieu 
thereof,  and  so  on,  but,  subject  to  a  few  exceptions 
which  will  be  noted  later,  in  proper  places,  the 
rights  and  liabilities  growing  out  of  each  kind  of 
option  contract  are  measured  and  tested  by  the 
same  rules  of  law. 

Sec.  102.  NATURE  AND  CHARACTERIS- 
TICS.— The  chief  and  distinguishing  character- 
istics of  an  option  contract  to  purchase  is  that  it 
binds  the  optionor  to  sell  property  but  does  not, 
without  election,  obligate  the  optionee  to  buy.  The 
thing  contracted  for  and  sold  is  the  right  of  elec- 
tion to  purchase.  The  optionor  parts  only  with  the 
right  to  sell  the  property  to  any  other  person  dur- 
ing the  time  limited,  and  the  optionee  receives  only 

6  See  See.  828. 

7  See  Sees.  211,  212. 


5  NATURE  AND  CHARACTERISTICS  §  102 

the  right  of  choice  whether  he  will  claim  perform- 
ance of  the  option  contract.^ 

The  property  optioned  is  not,  strictly  speaking, 
the  subject  matter  of  the  contract.  On  the  con- 
trary, it  is  the  right  of  election  to  purchase.-  Con- 
sequently, no  estate  or  interest  in  the  property 
passes  upon  execution  of  the  option  contract. 
However,  the  optionee  acquires  certain  rights  to 
the  property  which  courts,  upon  equitable  grounds, 
will  protect.^ 

The  nature  of  an  option  contract  implies  that 
the  optionee,  prior  to  election,  assumes  no  obliga- 
tion.'' He  makes  no  promise  to  purchase.  The 
contract  is  unilateral,  and  continues  such  until  an 
election  to  purchase  by  the  optionee,  whereupon 
it  becomes  a  binding  promise  on  the  part  of  the 

1  Pittsburg  etc.  Co.  v.  Bailey,  76  Kan.  42,  90  P.  803 ;  Couch  v.  McCoy, 

138  Fed.  696 ;  Black  v.  Maddox,  104  Ga.  157,  30  S.  E.  723 ;  Myers  v. 
Metzger,  61  N.  J.  Eq.  522,  48  Atl.  1113. 

An  option,  therefore,  is  necessarily  exclusive  whether  or  not  so  ex- 
pressed, McLaurin  v.  Cuba  Co.,  84  N.  Y.  S.  526,  87  App.  Div.  558, 
but  this  does  not  mean  that  the  optionor  may  not  sell  his  rights  in 
the  property  subject  to  the  option,  Elliott  v.  DeLaney,  217  Mo.  14, 
116  S.  W.  494. 

2  Pollock  V.  Brookover,  60  W.  Va.  75,  53  S.  E.  795,  6  L.  R.  A.   (N.  S.) 

403;  Barnes  v.  Hustead,  219  Pa.  287,  68  Atl.  839;  Patterson  v.  Farm- 
ington  St.  Ry.  Co.,  76  Conn.  628,  57  Atl.  853. 

8  See  Sees.  514,  515. 

4  Perrigo  v.  City  of  Milwaukee,  92  Wis.  236,  65  N.  W.  1025 ;  Connor  v. 
City  of  Marshfield,  128  Wis.  280,  107  N.  W.  639 ;  Overall  v.  Madison- 
ville,  125  Ky.  684,  102  S.  W.  278,  31  Ky.  L.  Rep.  278,  12  L.  R.  A. 
(N.  S.)  433,  not  debt  against  city;  Benedict  v.  Pincus,  191  N.  Y. 
377,  84  N.  E.  284 ;  Frank  v.  Stratf ord-Handcock,  13  Wyo.  37,  77  P. 
134,  110  A.  S.  R.  963,  67  L.  R.  A.  571;  Rease  v.  Kittle,  56  W.  Va. 
269,  49  S.  E.  150;  Snider  v.  Yarbrough,  43  Mont.  203,  115  P.  411. 


§  102  LAW  OP  OPTION  CONTRACTS  6 

optionor  to  convey.^  However,  the  option  contract, 
though  unilateral,  is  executed.^ 

The  covenants  in  an  option  contract  are  not 
mutual,  because  the  optionee  is  not  bound  to  per- 
form, and  mutuality  implies  an  obligation  on  each 
party  to  the  contract  to  do,  or  permit  to  be  done 
something  in  consideration  of  an  act  or  promise  of 
the  other  party/  But  as  we  shall  point  out  later 
on,  this  lack  of  mutuality  is  not,  in  a  proper  case, 
a  bar  to  specific  enforcement  of  the  contract/ 

Like  all  other  contracts  an  option  must  be  sup- 
ported by  a  consideration,^  or  be  evidenced  by  a 
sealed  writing  ;^°  otherwise  the  transaction  resolves 
itself  into  one  of  mere  oifer  or  proposal,  which 

5  Smith  V.  Bangham,  156  Cal.  359,  104  P.  689,  28  L.  R.  A.  (N.  S.)  522; 

Benedict  v.  Pincus,  191  N.  Y.  377,  84  N.  E.  284;  Boyer  v.  Nesbitt, 
227  Pa.  398,  76  Atl.  103 ;  Hardy  v.  Ward,  150  N.  C.  385,  64  S.  E. 
171;  Barton  v.  Thaw,  (Pa.)  92  Atl.  312;  Rampton  v.  Dobson,  156 
Iowa  315,  136  N.  W.  682.     See  Sec.  871. 

It  is  said  in  High  Wheel  Auto  Parts  Co.  v.  Journal  Co.  of  Troy,  (Ind. 
App.)  98  N.  E.  442,  that  the  term  "unilateral  contract,"  as  ex- 
pressing the  idea  of  a  contract  lacking  in  mutuality,  is  a  legal 
solecism. 

6  That  is,  as  to  the  sale  of  the  option  privilege,  but  not  as  a  sale  of  the 

property.  Pollock  v.  Brookover,  60  W.  Va.  75,  53  S.  E.  795,  6  L.  E.  A. 
(N.  S.)  403. 

Elliott  V.  DeLaney,  217  Mo.  14,  116  S.  W.  494,  where  the  consideration 
is  paid. 

Smith  V.  Bangham,  156  Cal.  359,  104  P.  689,  28  L.  R.  A.  (N.  S.)  522, 
where  consideration  is  paid. 

See  Adams  v.  Peabody  Coal  Co.,  230  111.  469,  82  N.  E.  645;  Fulton  v. 
Messenger,  61  W.  Va.  477,  56  S.  E.  830,  831;  Prior  v.  Hilton  & 
D.  L.  Co.,  141  Ga.  117,  80  S.  E.  559. 

7  Barnes  v.  Hustead,  219  Pa.  287,  68  Atl.  839.   See  Sees.  1213,  et  seq. 

8  See  Sees.  1213,  et  seq. 

9  See  Sees.  301,  et  seq. 
1*  See  Sees.  332,  et  seq. 


7  OPTION  DISTINGUISHED  FOR  OFFER  §  103 

may  be  withdrawn  by  the  optionor  at  any  time 
before  acceptance  by  the  optionee.  ^^ 

From  what  has  been  said  it  follows  that  a  mere 
offer  is  not  an  option  contract,  and  that  the  law 
relating  to  mere  offers,  or  proposals,  which  have 
not  been  accepted,  is  not  applicable  to  option  con- 
tracts so  far  as  relates  to  the  rights  of  the  respec- 
tive parties.  ^^ 

Sec.  103.  OPTION  DISTINGUISHED  FROM 
OFFER. — A  mere  offer  is  a  proposal  to  sell  or  to 
buy,  or  more  broadly,  a  proposal  to  do  some  act,  the 
acceptance  of  which  will  create  a  legal  relation.^ 
It  is  the  first  step  in  the  negotiation  of  all  con- 
tracts, including,  of  course,  option  contracts.  The 
second  step  is  the  acceptance  of  the  offer.  This 
completes  the  making  of  a  bilateral  contract,  but  a 
technical  ''acceptance"  of  an  option  is  unnecessary 
to  the  completion  of  an  option  contract.  This 
results  from  the  nature  of  the  option,  since,  in  the 
language  of  the  decisions,  the  very  thing  granted 
by  an  option  contract  is  the  right  of  electicm  to 
make  or  complete  the  contract  of  sale  and  purchase. 
The  option  contract,  however,  is  completed  upon 
its  execution  and  delivery  and  payment  or  teuder- 
ing  of  the  consideration,  or  the  performance  of  the 

11  See  Sec.  703. 

12  See  Sec.  103. 

1  "It  is  important  to  distinguish  between  an  offer  to  sell  something  which 
offer  may,  or  may  not,  become  a  completed  contract  by  acceptance 
in  the  future,  and  a  contract  to  leave  that  offer  open  for  a  time 
which  if  accepted  becomes,  at  once,  an  executed  contract.  Only  the 
last  is  an  option,"  Adams  v.  Peabody  Coal  Co.,  230  111.  469,  82  N.  E, 
645 ;  Black  v.  Maddox,  104  Ga.  157,  30  S.  E.  723. 
Option  to  sell.  Barker  v.  Critzer,  35  Kan.  459,  11  P.  382. 


§  103  LAW  OF  OPTION  CONTRACTS  8 

act  which  constitutes  the  consideration  for  the 
option.^  No  other  act  is  necessary  on  the  part  of 
the  optionee  to  continue  the  binding  effect  of  the 
option  contract  during  the  time  limit,  unless,  of 
course,  the  option  contract  otherwise  provides. 

A  mere  offer,  that  is,  an  offer  not  supported  by  a 
consideration,  or  under  seal,  is  a  mere  proposal,  or 
first  invitation,  to  make  a  contract  and  has  no  bind- 
ing effect,  either  upon  the  party  making  the  offer 
or  upon  the  party  to  whom  it  is  made,  until 
accepted  by  the  latter.^ 

An  election  to  purchase  or  to  deliver  under  an 
option  contract  must  not,  therefore,  be  confused 
with  the  technical  acceptance  of  a  mere  offer.  It  is 
true  the  effect  of  an  election  on  the  one  hand  and  of 
an  acceptance  on  the  other  is,  in  the  cases  stated, 
the  same  in  that  a  bilateral  contract  is  raised,  but 
a  technical  acceptance  of  an  option  contract,  unless 
rendering  the  consideration  therefor  shall  be  called 
an  acceptance,  is  not  necessary  to  the  consumma- 
tion of  an  option  contract.^ 

A  mere  unaccepted  offer  is  nudum  pactum.  An 
option  contract,  even  before  election  and  notice,  is 
not  a  nude  pact.  It  is  enforceable  by  the  optionee 
upon  due  election  and  notice,  and  tender,  when 
tender  is  necessary. 

2  See  Cummings  v.  Nielson,  42  Utah  157,  129  P.  619;  Prior  v.  Hilton  & 
D.  L.  Co.,  141  Ga.  117,  80  S.  E.  559. 

8  McLaurin  v.  Cuba  Co.,  84  N.  Y.  S.  526,  87  App.  Div.  558 ;  Frank  v. 
Stratford-Handcock,  13  Wyo.  37,  77  P.  134,  110  A.  S.  E.  963,  67 
L.  E.  A.  571. 

4  Ide  V.  Leiser,  10  Mont.  5,  24  P.  695,  24  A,  S.  E.  17 ;  Montgomery  v. 
Hundley,  205  Mo.  138,  103  S.  E.  527;  Dyer  v.  Duffy,  39  W.  Va.  148, 
19  S.  E.  540,  24  L.  E.  A.  339 ;  McCormick  v.  Stephany,  61  N.  J.  Eq. 
208,  48  Atl.  25;  Myers  v.  Metzger,  61  N.  J.  Eq.  522,  48  Atl.  1113. 


9  OPTION  DISTINGUISHED  FROM  OFFER  §  104 

A  mere  offer  is  a  personal  privilege  and  is  not, 
therefore,  assignable,  at  least  in  the  absence  of  a 
provision  for  assignment.  Option  contracts  are 
assignable  in  accordance  with  the  rule  in  the  re- 
spective jurisdictions  governing  assignment  of 
contracts.^ 

Sec.  104.  OPTION  DISTINGUISHED  FEOM 
OFFER.  CASES.— A  letter  from  plaintiff  recit- 
ing that  he  would  not  withdraw  certain  land  from 
the  market  until  January  1904,  during  which  time 
defendant  could  send  his  men  to  look  it  over,  and 
if,  at  the  expiration  of  that  time,  defendant 
desired  to  take  the  land,  plaintiff  would  give  him 
a  warranty  deed  at  the  rate  of  $20  per  acre,  is  a 
mere  offer  and  not  an  option.^  The  decision  was 
placed  on  the  ground  there  was  no  consideration 
to  uphold  the  offer,  thus  leaving  it  revocable  by  the 
writer  during  the  time  limit. 

A  writing  signed  by  an  owner  of  a  house  in  which 
he  offers  to  sell  it  to  another  at  a  certain  price  and 
upon  certain  conditions,  is  a  mere  proposal,  or 
offer,  and  not  a  contract.^ 

A  provision  in  an  agreement  of  sale  providing 
that  it  was  not  the  intention  of  the  seller  to  bind 
any  of  the  parties  to  the  completion  of  the  trans- 
action, makes  the  agreement  a  mere  offer.^ 

The  owner  signed  a  document  which  purported 
•  to  be  an  agreement  to  sell.  A  postscript  was  added 

5  Fulton  V.  Messenger,  61  W.  Va.  477,  56  S.  E.  830;  see  Sees.  601,  et  seq. 

1  Comstock  Bros.  v.  North,  88  Miss.  754,  41  So.  374. 

2  Tucker  v.  Woods,  (N.  Y.)  12  Johns.  190,  7  Am.  Dec.  305;  also  Weiden  v. 

Woodruff,  38  Mich.  130. 

8  Sirk  V.  Ela,  163  Mass.  394,  40  N.  E.  183. 


§  105  LAW  OF  OPTION   CONTRACTS  10 

and  signed  by  the  owner  stating  that  the  offer 
would  be  left  open  till  a  certain  date,  and  it  was 
held  that  the  document  was  a  mere  offer.* 


Sec.  105.  OPTION  DISTINGUISHED  FROM 
SALE. — A  sale  is  the  transfer  of  the  property  in  a 
thing  for  a  price  in  money.  A  sale  also  contem- 
plates the  transfer  of  the  possession  of  the  thing. 
An  agreement  of  sale  is  a  contract  by  which  the 
seller  agrees  to  sell,  and  the  buyer  agrees  to  pur- 
chase, the  property  in  a  thing  for  a  price  in  money. 
The  distinction,  therefore,  between  a  sale,  or  an 
agreement  of  sale,  on  the  one  hand  and  an  option 
contract  on  the  other,  is  very  apparent.  An  option 
contract  does  not  bind  the  optionee  to  purchase 
the  property.  An  agreement  of  sale  does.  The 
thing  directly  contracted  for,  in  an  agreement  of 
sale,  is  the  property;  in  an  option  contract,  it  is 
the  right  of  election  to  purchase  the  property.^ 

An  option  contract,  as  we  shall  see  later  on,^ 
ripens  into  an  agreement  to  sell  when  the  optionee 
exercises  his  right  of  election  to  purchase  and  gives 
the  required  notice.  By  election  and  notice  the 
option  contract  is  turned  into  an  agreement  to  sell. 

.4  Dickinson  v.  Dodds,  L.  B.,  2  Ch.  Div.  463,  34  L.  T.  (N.  S.)  607. 

1  ' '  Unilateral ' '  and  ' '  bilateral ' '  contracts  defined,  Winders  v.  Kenan, 
161  N.  C.  628,  77  S.  E.  687;  Darr  v.  Mummert,  57  Neb.  378,  77 
N.  W.  767. 
A  contract  of  sale  is  where  there  is  an  agreed  price,  a  vendor,  a  vendee, 
an  agreement  of  the  former  to  sell  for  an  agreed  price,  and  an 
agreement  of  the  latter  to  buy  and  pay  the  agreed  price,  In  re  Allen, 
183  Fed.  172.  An  option  to  purchase  is  merely  an  agreement 
whereby  the  optionor  may,  upon  compliance  with  certain  terms  and 
conditions,  become  the  owner  of  the  property,  Id. 

»  See  Sec.  871. 


11  OPTION  DISTINGUISHED  FROM  SALE  §  106 

The  particular  method,  or  means,  by  whici  con- 
agreement  of  sale  is  consummated,  that  is,  whetliy, 
by  election  under  the  option  contract,  or  by  agree- 
ment of  sale  in  the  first  instance,  is  immaterial. 

While  the  distinction  between  the  two  kinds  of 
contract  is  well  defined,  difficulty  is  sometimes 
experienced  in  determining  the  classification.  Op- 
tion contracts  often  assume  the  form  and  language 
of  an  agreement  of  sale.  Interpretation,  of  course, 
is  the  key  to  the  situation.  The  intention  of  the 
parties  is  the  first  and  the  cardinal  rule.^ 

It  may  be  laid  down  as  an  established  rule  of 
law  that  unless  the  contract  contains  language 
which  may  reasonably  be  construed  as  an  agree- 
ment on  the  part  of  the  vendee  to  purchase  the 
property,  or  to  assume  some  obligation  thereunder, 
it  will  be  held  to  be  an  option  contract  and  not  an 
agreement  of  sale  and  purchase."^  It  is  impossible 
to  conceive  of  an  agreement  of  sale  and  purchase 

3  Collier  v.  Robinson,  53  Tex.  Civ.  App.  285,  129  S.  W.  389;  Clark  v.  Cagle, 

141  Ga.  703,  82  S.  E.  21. 

4  Indiana  etc.  L.  Co.  v.  Pharr,  82  Ark.  573,  102  S.  W.  686  j   Gordon  v. 

Swan,  43  Cal.  564;  White  v.  Bank  of  Hanford,  148  Cal.  552,  83  P. 
698;  Strauss  v.  Brier,  (Colo.)  140  P.  183,  patent;  Simpson  v.  San- 
ders, 130  Ga.  265,  60  S.  E.  541;  Kessler  v.  Pruitt,  14  Idaho  175, 
93  P.  965,  on  rehearing,  p.  970 ;  Cortelyou  v.  Barnsdall,  236  111.  138, 
86  N.  E.  200,  oil  lease;  O'Neill  v.  Risinger,  77  Kan.  63,  93  P.  340, 
oil  and  gas  option;  Darr  v.  Mummert,  57  Neb.  378,  77  N.  W.  767; 
Swank  v.  Fretts,  209  Pa.  625,  59  Atl.  264;  Uhlman  t.  Sullivan,  242 
Pa.  436,  89  Atl.  550,  held  to  be  an  option,  though  no  express  promise 
to  pay  the  consideration;  Gira  v.  Harris,  14  S.  D.  537,  86  N.  W.  624; 
Wheeling  Creek  etc.  Co.  v.  Elder,  170  Fed.  215;  Witherspoon  v. 
Staley,  (Tex.  Civ.  App.)  156  S.  W.  557;  Heydrick  v.  Dickey,  154 
Ky.  475,  157  S.  W.  915. 
But  a  contract  reciting  that  one  party  has  ' '  sold ' '  to  another  certain 
goods  is  binding  on  the  latter  when  signed  by  the  agent  of  both, 
though  it  does  not  recite  that  the  latter  ' '  purchased ' '  the  goods, 
Butler  v.  Thompson,  92  U.  S.  412,  23  L.  Ed.  684. 


§  ^^^  LAW  OF  OPTION  CONTRACTS  12 

and  si)'^^  obligation  on  the  part  of  tlie  vendee  to 
^9Krchase.  On  the  other  hand,  the  absence  of  such 
obligation  is  the  distinctive  characteristic  of  an 
option  contract.  A  contract  of  sale  creates  mutual 
obligations  on  the  part  of  the  seller  to  sell,  and  on 
the  part  of  the  purchaser  to  buy,  while  an  option 
gives  the  right  to  purchase,  within  a  limited  time, 
without  imposing  any  obligation  to  purchase/ 


5 


Sec.  106.  OPTION  DISTINGUISHED  FROM 
SALE.  CASES.  OFFERS  AND  OPTIONS.— 
An  agreement  to  convey  land  to  plaintiff,  for  a 
certain  sum,  if  plaintiff  desired  to  purchase  the 
land  after  the  completion  of  a  well  then  being 
drilled  for  oil  on  an  adjoining  tract  of  land  belong- 
ing to  another  person,  is  an  ''option."^ 

A  writing  signed  by  the  vendor  alone  in  which 
he  recites  he  has  sold  the  land  to  the  vendee,  for 
a  certain  price,  and  is  to  receive  a  certain  sum  as 
deposit  and  part  payment,  the  sale  to  be  subject  to 
a  search  and  approval  of  title,  and  giving  the  ven- 
dee twenty  days  for  examination  of  the  title,  is  a 
mere  proposal.^ 

6  Brickell  v.  Atlas  Assur.  Co.,  10  Cal.  App.  17,  101  P.  16,  test  is  right  to 
specific  performance;  In  re  Allen,  183  Fed.  172;  see  Ellsworth  v. 
So.  Minn.  R.  El.  Co.,  31  Minn.  543,  18  N.  W.  822;  Dillinger  v. 
Ogden,  244  Pa.  20,  90  Atl.  446;  Black  v.  Maddox,  104  Ga.  157,  30 
S.  E.  723. 
Assignment  of  option  held  to  be  an  option  and  not  sale  and  did  not, 
therefore,  bind  the  assignee  to  pay  the  price  for  the  assignment  in 
the  absence  of  an  election  by  him,  Caine  v.  Hagenbarth,  37  Utah  69, 
106  P.  945. 

1  Laughner  v.  Smith,  232  HI.  534,  83  N.  E.  1052. 

2  Vassault  v.  Edwards,  43  Cal.  458. 


13  OPTION  DISTINGUISHED  PROM  SALE  §  106 

A  contract  by  which  a  land  owner  agreed  to  con- 
vey certain  land  on  each  side  of  its  right  of  way, 
at  any  time  within  two  years,  whenever  required 
by  the  vendee,  provided  it  should  pay  him  $1,  which 
it  covenanted  to  pay  upon  the  execution  and  deliv- 
ery of  the  deed,  is  simply  a  contract  conferring  an 
** option"  on  the  vendee  to  secure  a  conveyance.^ 

A  writing  giving  defendant,  in  consideration  of 
$2,000  paid,  the  exclusive  privilege,  to  a  certain 
date,  to  purchase  certain  land,  at  a  certain  price, 
and  providing  that  if  on  or  before  that  date 
defendant  did  not  pay  an  additional  sum  named, 
the  agreement  should  be  void  and  the  $2,000 
returned,  is,  until  the  expiration  of  the  fixed  time, 
an  ** option."* 

Defendant  gave  a  land  company  the  exclusive 
sale  of  certain  lands  for  ninety  days  from  August 
21,  1907,  on  condition  that  a  sale  then  pending  was 
not  closed  on  or  before  that  date;  the  land  com- 
pany agreeing  to  sell  at  $8  per  acre,  and  was  per- 
mitted to  retain  all  in  excess  of  that  amount  as  its 
commissions.  The  land  company  agreed  to  sell  all 
of  the  land  and  also  agreed  that  if  any  land 
remained,  at  the  expiration  of  the  stipulated  time, 
it  would  buy  the  same  itself.  This  was  held  ''but 
an  option."^ 

A  paper  signed  by  A  by  which  he  agrees  that  B, 
in  consideration  of  $1  paid,  shall  for  thirty  days, 

3  Louisville  etc.  R.  Co.  v.  Gulf  etc.  Co.,  82  Miss.  180,  33  So.  845,  100 
A.  S.  R.  627. 

4Kingsley  v.  Kressly,  60  Ore.  167,  118  P.  678;  Martin  v.  Wilson,  24 
Idaho  353,  134  P.  532,  holding  a  "void"  and  "no  effect"  clause 
made  the  agreement  an  option. 

0  Pope  V.  Ansley  Realty  Co.,  (Tex.  Civ.  App.)  135  S.  W.  1103. 


§  107  LAW  OP  OPTION  CONTRACTS  14 

have  the  ''refusal"  on  certain  lands,  and  that  he 
will  convey  the  same  in  consideration  of  $20  per 
acre,  $500  to  be  paid  on  the  execution  of  the  deed 
and  the  balance  secured  by  mortgage  on  the  land, 
specifying  the  rate  of  interest,  but  not  any  time 
for  the  delivery  of  the  deed,  nor  the  length  of  time 
the  mortgage  was  to  run,  is  a  "refusal"  or  "offer" 
and  not  a  contract  of  sale.^ 

Sec.  107.  OPTION  DISTINGUISHED  FROM 
SALE.  CASES  CONTINUED.  OFFERS  AND 
OPTIONS. — The  mortgagor,  to  stop  foreclosure 
proceedings,  conveyed  the  property  to  the  mort- 
gagee in  discharge  of  the  debt.  The  mortgagee 
executed  an  agreement  to  reconvey  any  of  the  tracts 
to  the  mortgagor,  at  any  time  within  two  years,  for 
certain  prices  and  interest.  The  agreement  to 
reconvey  was  held  an  "option"  and  not  a  condi- 
tional sale.^ 

An  agreement  by  the  optionor  to  convey  to  the 
optionee,  within  a  certain  time,  and  providing  for 
an  extension  of  time  to  five  years,  at  a  certain  price, 
for  each  lot  of  a  certain  tract  sold,  the  optionee  to 
pay  taxes  and  assessments  and  interest,  and  per- 
mitting the  optionee  to  build  houses  on  each  lot, 
within  a  certain  time,  the  optionor  to  receive  sec- 
ond mortgages,  in  certain  amounts,  in  payment  of 
the  balance  of  the  price  for  the  lots  sold,  and  pro- 
viding that  no  estate  or  interest  in  the  land  was  to 
pass   beyond   the   ri^ht  to   build   the   houses,   is 

«  Potts  V.  Whitehead,  21  N.  J.  Ea.  55.  a^Lrmad  23  N.  J.  Eq.  512, 
1  Neeson  ▼.  Smith,  47  Wash.  386,  92  P.  131. 


15  OPTION   DISTINGUISHED   FROM  SALE  §  107 

an  ''option"  and  not  an  "executory  contract  to 
purchase."^ 

A  contract  by  plaintiff  to  sell,  and  by  defendant's 
predecessors  in  interest  to  buy,  certain  mining 
property,  and  which  is  personal,  and  does  not,  in 
terms,  run  ''to  heirs  and  assigns"  and  under  which 
the  prospective  grantees,  although  given  posses- 
sion, could  neither  sell  nor  assign  without  the 
grantor's  assent,  until  they  had  become  entitled  to 
a  deed  by  performance  of  certain  conditions,  and 
one  of  which  was  to  pay  the  grantor  a  certain  sum 
out  of  the  property,  is  a  mere  "option."^ 

Defendants  signed  a  writing  as  follows:  "Re- 
ceived from  C  the  sum  of  $50  on  account  of  said 
price  of  $25,500  on  the  sale  of  said  premises ;  $950 
to  be  paid  on  this  day  and  $24,500  on  delivery  of 
the  deed,  contract  to  be  made  at  the  office  of  N." 
It  was  held  the  writing  was  not  a  contract  for  the 
purchase  of  the  premises,  "but  merely  an  option.""* 

An  agreement  whereby  the  parties  of  the  first 
part  in  consideration  of  $5  per  acre  "for  which  $1 
in  hand  paid,  the  remainder  to  be  paid  within 
thirty  days,"  bargained  certain  described  prop- 
erty, and  contracted  to  make  a  warranty  deed  at 
any  time  within  thirty  days,  the  second  party 
"paying  the  remainder  of  $5  per  acre  per  con- 
tract," is  an  "option,"  and  not  a  sale  of  the  land.^ 

2  IVSoore  V.  Allen,  109  Minn.  139,  123  N.  W.  292. 

a  Smith  V.  Jones,  21  Utah  270,  60  P.  1104;  see  Witherspoon  v.  Staley, 
(Tex.  Civ.  App.)  156  S.  W.  557;  Harper  v.  Ind.  Devp.  Co.,  13  Ariz. 
176,  108  P.  701,  option  on  mine  with  privilege  of  working. 

*Levy  V.  Kottman,  11  Misc.  Rep.  372,  32  N.  Y.  S.  241;  see  also  Seidman 
V.  Rauner,  99  N.  Y.  S.  862,  51  Misc.  Rep.  10. 

6  Noe  V.  Saylor,  143  Ky.  254,  136  S.  W.  209 ;  see  also  Title  etc.  Co.  t. 
McDonnell,  32  Wash.  418,  73  P.  484. 


§  107  LAW  OF  OPTION  CONTRACTS  16 

Where  plaintiff  contracts  to  sell  a  mining  claim 
for  a  certain  sum  to  be  paid  on  or  before  a  certain 
day,  and  the  deed  purporting  to  convey  title  to  the 
purchaser  is  left  in  his  possession  but  not  as  an 
absolute  conveyance,  and  a  reconveyance  by  the 
purchaser  to  the  plaintiff  is  placed  in  escrow,  to 
be  delivered  to  plaintiff  upon  failure  of  the  pur- 
chaser to  make  the  payment,  all  bearing  the  same 
date,  the  transaction  constitutes  an  "option."^ 

6  Conway  v.  Hart,  129  Cal.  480,  62  P.  44;  see,  however,  Bonanza  M. 
etc.  Co.  V.  Ware,  78  Ark.  306,  95  S.  W.  765,  where  the  rendor  exe- 
cuted note  for  price  and  deed  was  placed  in  escrow  to  be  delivered 
upon  payment  of  note;  held  agreement  of  sale. 

Cable  correspondence  held  option  and  not  sale,  Pomeroy  v.  Newell, 
102  N.  Y.  S.  1098,  117  App.  Div.  800. 

The  fact  that  deposits  are  made  by  the  parties  to  secure  performance 
does  not  transform  the  option  into  a  sale,  Nagel  v.  Cohen,  112 
N.  Y.  S.  1066.   See,  however,  Sec,  109,  note  4. 

Agreement  to  purchase  car  wheels  held  an  "option,"  Northwestern 
etc.  Co.  v.  Eailway  Co.,  94  Wis.  603,  69  N.  W.  371. 

An  agreement  to  sell  certain  described  land  to  E  and  plaintiff  "or 
either  of  them,"  is  an  "offer  to  sell"  to  either  and  not  a  sale, 
Mossie  V.  Cyrus,  61  Ore.  17,  119  P.  485. 

An  agreement  to  sell  merchandise,  with  right  of  optionee  to  counter- 
mand, held  an  ' '  option ' '  and  not  agreement  of  sale,  Moise  v.  Eock 
Springs  Distilling  Co.,  79  Neb.  124,  112  N.  W.  372. 

Transaction  to  repurchase  shares  of  stock  held  "option,"  Sayward  v. 
Houghton,  119  Cal.  545,  51  P.  853,  52  P.  44. 

Contract  relating  to  sale  of  cotton  held  an  "option,"  Luke  v.  Living- 
ston, 9  Ga.  App.  116,  70  S.  E.  596. 
■    Contract  relating  to  timber,  held  option,  Union  Sawmill  Co.  v.  Lake 
L.  Co.,  120  La.  106,  44  So.  1000. 

Contract  held  to  give  each  party  "option"  to  buy  the  property  of  the 
other.  Hooker  Steam  Pump  Co.  v.  Buss,  240  Mo.  465,  144  S.  W.  419. 

"Option"  to  vendor  to  repurchase,  Jeffreys  v.  Charlton,  72  N.  J.  Eq. 
340,  65  Atl.  711. 

Option  to  require  defendant  to  repurchase  stock  and  not  absolute 
agreement  to  repurchase,  Scott  v.  Goodin,  21  Cal.  App.  178,  131  P. 
76.   See  McFarland  v.  McCormick,  114  Iowa  368,  86  N.  W.  369. 

Option  to  return  shares  involving  necessity  of  tendering  back  the 
shares,  Boynton  v.  Woodbury,  101  ISIass.  346. 


17  OPTION  OR  AGREEMENT  OF  SALE  §  108 

Sec.  108.  OPTION  DISTINGUISHED  FROM 
AGEEEMENT  OF  SALE.  SALES.  — A  bond 
reciting  that  the  parties  have  purchased  a  lot  and 
have  paid  thereon  $50  and  are  to  make  further 
payments,  and  that,  on  making  such  payments,  the 
lot  is  to  be  deeded  to  them,  is  a  contract  of  sale 
and  not  a  "mere  option.''^ 

A  contract  reciting  that  defendant  agreed  to  buy 
and  pay  cash  for  a  certain  tract  of  timber,  and  that 
he  would  take  the  timber  at  a  certain  advance  on 
the  price  paid  by  plaintiff,  establishes  the  relation 
of  vendor  and  vendee  and  is  not  a  ''mere  option."^ 

6  John  V.  Elkins,  63  W.  Va.  158,  59  S.  E.  961,  land  to  be  paid  for  on 
delivery  of  deed  "after  notice  of  acceptance";  also  Swank  v.  Fretts, 
209  Pa.  625,  59  Atl.  264. 

Grabenliorst  v.  Nicodemus,  42  Md.  236,  option  on  distillery. 

Gold  Spring  D.  Co.  v.  Stitzel  D.  Co.,  150  Ky.  457,  150  S.  W.  516, 
wareliouse  receipts  for  barrels  of  whiskey  to  be  delivered  as  re- 
quested and  taken  and  paid  for  by  optionee. 

Gard  v.  Thompson,  21  Idaho  485,  123  P.  497,  water  supply. 

EUiott  v.  DeLaney,  217  Mo.  14,  116  S.  W.  494,  lease. 

Berwind  v.  Williams,  172  Pa.  1,  33  Atl.  353,  contract  for  possession 
after  judgment  in  ejectment. 

Snider  v.  Yarbrough,  43  Mont.  203,  115  P.  411,  mine. 

Option  under  Louisiana  law,  Whited  v.  Calhoun,  122  La.  100,  47  So.  415. 

Womack  v.  Coleman,  92  Minn.  328,  100  N.  W.  9,  option  on  option. 

W.  Irving  S.  Bros.  Co.  v.  Herold,  81  Mo.  App.  461,  order  for  twine. 

Clark  v.  Eastlake  L.  Co.,  158  N.  C.  139,  73  S.  E.  793. 

Absolute  sale  with  option  to  select  brand  of  timber.  Storm  v.  Rosen- 
thal, 141  N.  Y.  S.  339. 

Delivery  of  pictures  on  approval,  held  option,  Steinhauer  v.  Henson, 
54  Colo.  246,  131  P.  255. 

Provision  in  contract  of  sale  that  it  is  subject  to  prior  option  does 
not  make  the  contract  a  mere  offer,  Lansing  Co.  v.  Eogers,  (Mich.) 
149  N.  W.  1000. 

1  Vance  v.  Newman,  72  Ark.  359,  80  S.  W.  574,  105  A.  S.  R.  42. 

2  Sitterding  v.  Grizzard,  114  N.  C.  108,  19  S.  E.  92. 
2 — Option   Contracts. 


§  108  LAW  OF  OPTION   CONTRACTS  18 

An  agreement  embodied  in  a  letter  reciting  that 
the  writer  will  give  $250  for  a  contract  of  land 
and  specifying  the  terms  of  payment,  and  the  reply 
by  the  owner  accepting  the  offer,  is  an  agreement 
on  the  part  of  the  owner  to  sell  and  is  not  a  "mere 
option."^ 

A  memorandum  reading,  "Received  of  A  $5  as 
a  part  payment"  for  a  certain  lot  "conditioned  as 
follows :  $2495  to  be  paid  on  or  before  the  20th  day 
of  March,  1888,  and  the  balance  of  $1500  to  run  on 
time  to  suit  convenience,"  with  an  agreement  to 
furnish  a  warranty  deed  on  payment  of  the  $2495, 
is  not  an  "option"  merely,  but  an  agreement  of 
sale  which  may  be  enforced  by  the  buyer.* 

A  contract  for  the  purchase  of  land  which  recites 
that  the  vendor  has  received  a  certain  sum  on 
account  of  the  purchase  money  "this  day  sold  to 
him  (vendee)  by  me,"  and  which  then  sets  forth 
the  terms  of  sale  which  are  to  be  complied  with  in 
fifteen  days,  or  deposit  money  to  be  forfeited,  is 
one  of  bargain  and  sale  and  not  an  "  option. "° 

An  agreement  by  landowners  to  sell  land  to 
named  parties  for  a  certain  sum,  part  payment  on 

3  Cummings  v.  Nielson,  42  Utah  157,  129  P.  619  j  also  Roberts  v.  Braf- 
fett,  33  Utah  51,  92  P.  789;  see  Hobart  v.  Frederiksen,  20  S.  D. 
248,  105  N.  W.  168. 

4  Langert  v.  Ross,  1  Wash.  250,  24  P.  443 ;  see  also  Menzel  v.  Primm, 
6  Cal.  App.  204,  91  P.  754;  Ellis  v.  Bryant,  120  Ga.  890,  48  S.  E. 
352;  Slayden  &  Co.  v.  Palmo,  53  Tex.  Civ.  App.  227,  117  S.  W. 
1054;  Newell  v.  Lamping,  45  Wash.  304,  88  P.  195;  Roberts  v. 
White  River  Power  Co.,  30  Wash.  430,  70  P.  1104,  right  of  way; 
Monongah  Coal  etc.  Co.  v.  Fleming,  42  W.  Va.  538,  26  S.  E.  201. 

6  Hazelton  v.  LeDuc,  (D.  C.)  10  App.  Cas.  379;  also  Hamburger  v„ 
Thomas,  (Tex.  Civ.  App.)  118  S.  W.  770;  Benson  ▼.  Shotwell,  87 
Cal.  49,  25  P.  249. 


19  OPTION  OR  AGREEMENT  OF  SALE  §  108 

which  was  acknowledged,  and  agreeing  to  furnish 
an  abstract  of  title  which  the  vendees  were  to  have 
three  days  to  examine,  and  within  which  to  con- 
summate the  deal,  is  an  agreement  of  sale.® 

An  agreement  certifying  that  "I  have  this  day 
sold  to  (a  corporation)  my  claim"  to  certain  lands 
and  acknowledging  receipt  of  the  price,  and  which 
is  signed  by  the  vendor,  is  an  express  agreement 
to  convey.'' 

An  agreement  endorsed  on  a  mining  lease  and 
stipulating  ''that  if  the  parties  of  the  second  part 
shall,  at  the  expiration  of  two  years  from  the  date 
hereof,  pay  unto  said  W  &  D  the  sum  of  $10,000  in 
lieu  of  the  ten  per  cent  agreed  upon  in  said  lease, 
then  the  said  W  &  D  shall  make  a  good  and  lawful 
deed  of  conveyance  for  the  above  described  prem- 
ises in  this  lease,"  etc.,  is  an  absolute  agreement 
by  the  lessees  to  purchase.' 

A  contract  for  the  sale  of  land  at  a  specified  sum 
per  acre,  which  recited  that  plaintiff  thereby  sold 
to  defendant  certain  described  land,  title  papers 
to  be  furnished  by  plaintiff  without  delay,  and 
defendant  to  ascertain  the  acreage  by  a  specified 
date,  is  an  absolute  contract  of  purchase  and  sale 
and  not  an  option.^ 

6  Cheek  v.  Nicholson,  (Tex.  Civ.  App.)  133  S.  W.  707. 

7  Anderson  v.  WaUace  L.  etc.  Co.,  30  Wash.  147,  70  P.  247. 

« Suffern  v.  Butler,  21  N.  J.  Eq.  410;  see  Baraboo  Land  etc.  Co.  v. 
Winter,  130  Wis.  457,  110  N.  W.  413,  distinguishes  Nelson  v. 
Stephens,  107  Wis.  136,  82  N.  W.  163;  Chapman  v.  Propp,  125 
Minn.  447,  147  N.  W.  442. 

»  Golden  t.  Cornett,  154  Ky.  438,  157  S.  W.  1076, 


§  108  LAW  OP  OPTION  CONTRACTS  20 

An  agreement  to  deliver  stock  in  blocks  of  five 
shares  or  more,  as  called  for  by  the  vendee,  is  not 
an  option,  but  an  agreement  of  purchase/*' 

A  will  providing  that  on  the  death  of  the  life 
tenant,  testator's  son  should  "have"  the  land  at  a 
specified  price  and  that  the  proceeds  should  be 
divided  among  all  the  children,  did  not  give  the  son 
a  mere  option  to  purchase,  but  gave  him  the  land 
charged  with  the  payment  to  the  children.  ^^ 

A  contract  for  a  retail  automobile  agency,  and  for 
the  future  purchase  of  cars  by  the  agent,  providing 
for  a  deposit,  part  of  which  is  to  be  applied  on  the 
contract  for  five  cars  ordered,  and  that  the  agent 
was  to  "purchase  five  cars,  optional,"  binds  the 
agent  absolutely  to  purchase,  and  gives  him  only 
the  option  to  select  the  cars  from  a  list  set  out  in 
the  contract/^ 

10  Cragin  v.  O'Connell,  63  N.  Y.  S.  1071,  50  App.  Div.  399,  affirmed  169 

N.  Y.  573,  61  N.  E.  1128 ;  see  also  Edwards  v.  Capps,  122  Ga.  827, 
50  S.  E.  943;  Cooper  v.  Baj  State  Gas  Co.,  127  Fed.  482;  Proyident 
G.  M.  Co.  V.  Manhattan  Sec.  Co.,  (Cal.)   142  P.  884. 

11  Mohn  V,  Mohn,  148  Iowa  288,  126  N.  W.  1127. 

12  Alden  v.  Kaiser,  121  Minn.  Ill,  140  N.  W.  343. 

Agreement  for  possession  and  improvements  held  one  of  sale,  Harless 

V.  Pelty,  98  Ind.  53. 
■     Eeceipt  held  agreement  of  sale.  Gibbons  v.  Sherwin,  28  Neb.  146,  44 

N.  W.  99. 
Colwell  V.  Fulton,  117  Fed.  931,  sale  and  not  option;  Davis  v.  Kobert, 

89  Ala.  402,  8  So.  114,  18  A.  S.  E.  126. 
Vendee  in  possession,  Cone  v.  Cone,  118  Iowa  458,  92  N.  W.  665. 
Supplemental  agreement  extending  time  of  option  held  sale,  FuUen- 

wider  v.  Eowan,  136  Ala.  287,  34  So.  975. 
Binding  vendee  to  pay  taxes  during  life  "of  the  option,"  Chenoweth 

V.  Butterfield,  11  Ariz.  315,  94  P.  1131. 
Lease  of  machine  for  test.  Star  etc.  Co.  v.  McLeod,  122  Ky.  564,  92 

S.  W.  558,  29  Ky.  L.  Eep.  84. 


21  OPTION  OR  AGREEMENT  OF  SALE  §  109 

Sec.  109.  OPTION  DISTINGUISHED  FROM 
AGREEMENT  OF  SALE.  CASES.  PENALTY, 
FORFEITURE  AND  LIQUIDATED  DAM- 
AGE CLAUSES. — Written  instruments  assuming 
the  form  of  agreements  of  sale  often  contain  pen- 
alty and  forfeiture  clauses.  The  effect  to  be  given 
to  such  clauses  depends  on  the  facts.  Where  the 
parties  mutually  stipulate  the  seller  to  sell  and  the 
buyer  to  buy,  and  it  is  further  stipulated  that  if 
the  buyer  fails  to  perform,  he  shall  forfeit  certain 
payments  made  and  the  agreement  shall  be  void, 
the  instrument  should  be  construed  as  an  agreement 
of  sale,  that  is,  as  binding  upon  the  vendee  to  pur- 
chase, and  the  forfeiture  clause  as  a  penalty  and, 
therefore,  for  the  sole  benefit  of  the  vendor.  Other- 
wise it  would  be  within  the  power  of  the  vendee, 
by  his  own  default,  to  terminate  the  agreement 
without  liability  to  the  vendor.^ 

Where,  however,  the  contract  provides  for  per- 
formance of  one  of  two  things  in  the  alternative, 

12  Agreement  to  purchase  land  and  pay  the  price  when  an  order  is  ob- 
tained from  the  County  Court  to  sell  the  same  (it  belonging  to 
minors)  is  an  agreement  of  sale  and  purchase,  Thompson  v.  Wilkin- 
son, (Okl.)  148  P.  177. 

Contract  between  water  company  and  village  construed  as  a  valid 
mutual  agreement  and  not  a  mere  reservation  by  the  city  to  pur- 
chase. Board  of  Water  Commissioners  of  White  Plains,  In  re,  176 
N.  Y.  239,  68  N.  E.  348. 

1  Mason  v.  Caldwell,  10  HI.  196,  48  Am.  Dee.  330;  also  Hazelton  v.  LeDuc, 
(D.  C.)  10  App.  Cas.  379,  sale;  Westervelt  v.  Huiskamp,  101  Iowa 
196,  70  N.  W.  125;  Hamburger  v.  Thomas,  (Tex.  Civ.  App.)  118 
S.  W.  770;  Wright  v.  Suydam,  72  Wash.  587,  131  P.  239;  Abel  v. 
Gill,  95  Neb.  279,  145  N.  W.  637;  Hedrick  v.  Firke,  169  Mich.  549, 
135  N.  W.  319. 
And  the  same  rule  applies  to  the  vendor,  where  the  agreement  stipu- 
lates for  liquidated  damages  for  failure  of  the  vendor  to  convey, 
see  Morris  v.  Lagerfelt,  103  Ala.  608,  15  So.  895. 


§  109  LAW  OF  OPTION  CONTRACTS  22 

that  is,  when  a  party  has  the  right  either  to  perform 
certain  acts  or  pay  a  sum  of  money  as  liquidated 
damages,  the  option  right  is  preserved.^ 

A  contract  for  the  sale  of  land  by  which  the 
vendor  agrees  to  convey  the  premises,  and  provid- 
ing that  the  purchaser  shall  comply  with  the  ' '  con- 
ditions" of  the  agreement,  within  a  specified  time 
or  forfeit  the  earnest  money  paid,  is  an  option.^ 
The  theory  of  the  case  was  there  was  no  agreement 
on  the  part  of  the  vendee  to  purchase,  and  there- 
fore, the  rule  applicable  to  bilateral  contracts  pro- 
viding for  a  forfeiture  or  for  liquidated  damages 
if  the  buyer  fails  to  perform,  could  not  be 
invoked. 

On  the  other  hand,  an  agreement  by  which  the 
vendor  agrees  to  sell  and  convey  to  the  vendee  a 
certain  tract  of  land,  for  a  stated  price,  "and  to 
bind  the  above  contract,  we,  the  above  contracting 

2  Davis  V.  Isenstein,  257  HI.  260,  100  N.  E.  940 ;  see  Friendly  v.  Elwert, 
57  Ore.  599,  105  P.  404,  112  P.  1085;  O'Neill  v.  Bisinger,  77  Kan. 
63,  93  P.  340;  Eedwine  v.  Hudman,  104  Tex.  21,  133  S.  W.  426. 
A  stipulation  for  liquidated  damages  will  bar  specific  performance  only 
when  it  appears  from  the  contract  that  it  was  the  intention  of  the 
parties  that  the  right  to  pay  the  stipulated  sum  or  perform  the 
contract,  should  be  optional,  Hedrick  v.  Firke,  169  Mich.  549,  135 
N.  W.  319;  Grant  County  Board  of  Control  v.  Allphin,  152  Ky.  280, 
153  S.  W.  417. 
Liquidated  damage  and  release  clause  held  to  make  agreement  option, 
Hessell  v.  Neal,  25  Colo.  App.  300,  137  P.  72. 

SEunck  V.  Dimmick,  51  Tex.  Civ.  App.  214,  111  S.  W.  779;  also  Gordon 
V.  Swan,  43  Cal.  564;  Gallup  v.  Sterling,  49  N.  Y.  S.  942,  22  Misc. 
Rep.  672;  Axe  v.  Tolbert,  179  Mich.  556,  146  N.  W.  418;  Lawrence 
V.  Pederson,  34  Wash.  1,  74  P.  1011;  Low  v.  Young,  158  Iowa  15, 
138  N.  W.  828 ;  Martin  v.  Morgan,  87  Gal.  203,  25  P.  360,  22  A.  S.  R. 
240;  see  Beckwith- Anderson  L.  Co.  v.  Allison,  (Cal.  App.)  147  P. 
482. 
Libby  v.  Parry,  98  Minn.  366,  108  N.  W.  299,  holding  subsequent 
modification  made  option  an  agreement  to  purchase. 


23  OPTION  OR  AGREEMENT  OP  SALE  §  109 

parties,  deposit  the  sum  of  $1,000  each,  the  same 
to  be  forfeited  by  the  party  failing  to  fulfill  his 
part  of  the  contract,"  and  fixing  a  time  limit  of 
thirty  days,  is  not  an  '' option,"  but  an  agreement 
of  sale  and  purchase/ 

So,  where  the  contract  contains  a  forfeiture 
clause,  but  also  provides  that  the  obligation  to  pur- 
chase, at  the  price  named,  should  continue  binding, 
the  vendee  is  bound,  the  contract  not  being  an 
option.^  And  generally  where  there  is  an  agree- 
ment on  the  part  of  the  vendee  to  purchase,  a  for- 
feiture clause  does  not  convert  the  agreement  into 
an  "option."^  Nor  does  a  stipulation  that  in  case 
the  optionee  is  not  satisfied  with  the  title,  the 
deposit  money  shall  be  returned  to  him  by  the 
optionor  ;^  but  it  is  otherwise  when,  by  the  express 

4  Newton  v.  Dickson,  53  Tex.  Civ.  App.  429,  116  S  W.  143 ;  see  Hedrick 
V.  Firke,  169  Mich.  549,  135  N.  W.  319 ;  Gordon  v.  Swan,  supra,  and 
also  Pringle  v.  Des  Moines  Ins.  Co.,  107  Iowa  742,  77  N.  W.  521, 

6  Heman  v.  Wade,  140  Mo.  340,  41  S.  W.  740. 

6  Allison  V.  Cocke,  106  Ky.  763,  51  S.  W.  593,  21  Ky.  L.  Eep.  434;  Wright 
V.  Suydam,  72  Wash.  587,  131  P.  239,  limiting  liability  to  payments 
made;  Mound  Mines  Co.  v.  Hawthorne,  173  Fed.  882,  97  C.  C.  A.  394. 
The  Texas  Supreme  Court  in  Moss  &  Ealey  v.  Wren,  (Tex.  Civ.  App.) 
120  S.  W.  847,  reversing  s.  c.  113  S.  W.  739,  holds  a  contract  stipu- 
lating that  the  purchaser  on  failing  to  comply  therewith  shall  forfeit 
the  amount  paid  which  "shall  be  accepted  by  the  seller  as  liquidated 
damages  for  such  injury  and  damages  as  the  seller  may  suffer  by 
reason  of  the  non-performance  of  the  contract  on  the  part  of  the 
purchaser,"  can  not  be  specifically  enforced,  when  the  optionee 
availed  himself  of  the  option  to  terminate  the  contract  and  to  forfeit 
the  deposit  money.  This  was  the  construction  of  the  decision  in 
Naylor  v.  Parker,  139  S.  W.  93,  which  further  holds  that  as  the 
optionee  in  the  Naylor  case  had  elected  to  purchase,  he  was  entitled 
to  have  specific  performance. 

TEeynolda  v.  O'Neil,  26  N.  J.  Eq.  223;  see  Benson  v.  Shotwell,  87  Cal. 
49,  25  P.  249;  Haskins  v.  Dern,  19  Utah  89,  56  P.  953;  see  also 
Friendly  v.  Elwert,  57  Ore.  599,  105  P.  404,  112  P.  1085. 


§  110  LAW  OP  OPTION  CONTRACTS  24 

provision  of  the  instrument,  it  is  stipulated,  for 
instance,  that  if  the  purchaser  does  not  make  the 
payments,  they  are  to  be  relieved  from  all  liability,' 
or  the  vendor  is  to  be  relieved  from  all  obligation 
to  the  vendee.^ 

Sec.  110.  OPTION  DISTINGUISHED  FROM 
AGREEMENT  OF  SALE.  CASES.  PROVI- 
SIONS FOR  TERMINATING  AGREEMENT, 
ETC. — Agreements  sometimes  contain  provisions 
for  their  termination,  or  stipulating  that  the  ven- 
dor shall  be  released  from  all  obligation  to  the 
vendee  if  the  latter  defaults.  In  these  agreements 
the  courts  endeavor  to  give  effect  to  the  intention 
of  the  parties,  and  construe  the  agreement  accord- 
ingly.^ The  decisions  best  illustrate  the  rule  and 
its  application. 

Thus,  a  contract  for  the  sale  of  land  on  a  certain 
day,  and  providing  *'if  payment  is  not  made  by 
said  day  that  this  contract  is  to  be  null  and  void" 
and  the  vendor  released  from  all  obligation  to  the 
vendee,  is  a  mere  "option"  to  buy  the  property.^ 
So,  where  the  contract  provides  that  in  case  of 

sVerstine  v.  Yeaney,  210  Pa.  109,  59  Atl.  689;  Beckwith- Anderson  L. 
Co.  V.  Allison,  (Cal.  App.)  147  P.  482. 

9  Wallace  v.  Figone,  107  Mo.  App.  362,  81  S.  W.  492;  see  Jones  v.  Hert, 
(Ala.)   68  So.  259. 

1  Abel  V.  Gill,  95  Neb.  279,  145  N.  W.  637,  construction  to  make  con- 

tract operative  rather  than  void.    See  Sec.  122,  note  8. 

2  Huggins  V.  Safford,  67  Mo.  App.  469;  Sprague  v.  Schotte,  48  Ore.  609, 

87  P.  1046;  McConathy  v.  Lanham,  116  Ky.  735,  76  S.  W.  535,  25 
Ky.  L.  Rep.  971 ;  Martin  v.  Wilson,  24  Idaho  353,  134  P.  532 ;  Kings- 
ley  V.  Kressly,  60  Ore.  167,  118  P.  678;  Warren  v.  Costello,  109  Mo. 
338,  19  S.  W.  29,  32  A.  S.  R.  669. 


25  OPTION  OR  AGREEMENT  OF  SALE  §  110 

default  on  the  part  of  the  vendee  the  parties  are  to 
be  released  from  all  liability,  the  agreement  is  a 
mere  "option."^  A  contract  providing  that  if  the 
defendants  fail  to  pay  a  specified  sum  within  a 
designated  time  the  conveyance  should  be  void,  is 
only  an  "offer  to  sell.''* 

A  written  contract  binding  the  owner  of  land  to 
sell  it  to  plaintiff  for  a  certain  sima  and  to  execute 
a  deed  on  demand  on  or  before  a  fixed  date,  and 
providing  that  if  the  vendee  within  that  time  elects 
not  to  purchase,  the  contract  should  be  null  and 
void,  is  an  agreement  of  sale.^ 

An  agreement  by  an  owner  to  sell  coal  lands  for 
a  certain  sum  per  acre,  and  providing  that,  if  the 
first  payment  was  not  made  on  a  day  named,  the 
agreement  should  be  construed  as  rescinded  and 
neither  party  should  be  bound  thereby,  is  an 
option.® 

Where  a  vendor  promises  to  convey  land  upon 
payment  of  a  specified  sum  and  the  purchaser 
promises  to  pay  the  agreed  price,  mutuality  is  cre- 
ated which  is  not  destroyed  because  the  purchaser 
could  terminate  it  by  refusing  to  pay  the  interest 
for  sixty  days,  since  it  is  simply  an  option  which 

5  Pittsburg  etc.  Co.  v.  Bailey,  76  Kan.  42,  90  P.  803 ;  Litz  v.  Goosling, 

93  Ky.  185,  9  S.  W.  527,  14  Ky.  L.  Rep.  91,  21  L.  E.  A.  127,  pro- 
viding all  obligations  should  cease;  see  Ramsey  v.  West,  31  Mo.  App. 
676;  Verstine  v.  Yeaney,  210  Pa.  109,  59  Atl.  689;  Yerkes  v. 
Richards,  153  Pa.  646,  26  Atl.  221,  34  A.  S.  E.  721. 

4  Jones  V.  Lewis,  89  Ark.  368,  117  S.  W.  561. 

6  Davis  V.  Wilson,  55  Ore.  403,  106  P.  795,  that  is,  a  contract  of  sale, 

unless  the  purchaser  elected  not  to  buy. 

6  Barnes  v.  Rea,  219  Pa.  279,  68  Atl.  836. 


§  111  LAW  OP  OPTION  CONTRACTS  26 

the  parties  contracted  for  and  which  may  or  may 
not  be  exercised/ 

Sec.  111.  OPTION  TO  PURCHASE  DISTIN- 
GUISHED FROM  OPTION  TO  RETURN. 
BAILMENT. — The  distinction  between  the  two 
forms  of  option  is  that  under  the  option  to  pur- 
chase, the  title  to  the  property  does  not  pass  until 
election,  whereas,  as  a  general  rule,  under  an 
option  to  return,  the  title  vests  immediately  in  the 
purchaser  and  re-vests  in  the  seller  upon  exercise 
of  the  option  to  return.  The  effect  of  the  contract 
as  vesting  or  not  vesting  the  title  in  the  purchaser, 
belongs  more  properly  to  the  chapter  treating  of 
that  subject.^  The  purpose  here  is  to  call  attention 
to  these  contracts  and  their  construction  by  the 
courts  as  distinguishing  the  one  from  the  other. 
The  court  endeavors  to  ascertain  the  intention  of 
the  parties  and  to  give  that  intention  effect,  irre- 
spective of  the  particular  name  given  to  the  con- 
tract by  the  parties.^ 

The  transactions  under  consideration  assume  a 
variety  of  forms.  Thus,  a  contract  of  "sale  and 
return"  or  ''sale  or  return"  is  a  sale  with  option 

7  Taber  v.  Dallas  Co.,  101  Tex.  241,  106  S.  W.  332.  Election  not  to  com- 
plete purchase,  option,  McGregor  v.  Ireland,  86  Kan.  426,  121  P. 
358. 

1  Chapter  V,  Sec.  507. 

2  Scott  M.  &  S.  Co.  V.  Shultz  &  Clary,  67  Kan.  605,  73  P.  903. 

The  general  rule  that  the  delivery  of  an  article  at  a  fixed  price  to  be 
paid  for  or  returned  at  the  receiver's  option,  is  a  sale,  yields  to  the 
express  stipulation  of  the  parties  reserving  title  in  the  bailor, 
Crocker  v.  Gullifer,  44  Me.  491,  69  Am.  Dec.  118.  See,  however, 
In  re  Wells,  140  Fed.  752. 


27  OPTION   TO  PURCHASE  OR  TO  RETURN  §111 

to  return,'  but  under  an  option  to  purchase  or 
return  there  is  no  sale  until  the  prospective  pur- 
chaser exercises  his  option  to  purchase  the  prop- 
erty, that  is,  the  prospective  purchaser,  by  this 
form  of  contract,  is  given  the  option  to  purchase  or 
to  return/  The  transaction  is  similar  to  a  bailment 
of  the  property  with  option  to  purchase  or  return.^ 

Similar  to  the  latter  is  the  transaction  whereby 
property  is  delivered  to  a  prospective  purchaser 
on  trial  or  approval.  However,  there  is  much 
refinement  shown  in  the  interpretation  of  these 
contracts,  and  much  ingenuity  displayed  in  the 
selection  of  language  to  express  the  intention  of 
the  parties.  Thus,  an  option  to  purchase,  if  one 
likes  the  property,  is  not  a  sale  with  option  to 
return;  it  is  a  bailment  with  option  to  purchase.® 
On  the  other  hand,  a  purchase  of  the  property  with 
option  to  return,  if  the  purchaser  does  not  like 
the  property,  is  not  an  option  to  purchase  the  prop- 
erty, but  is  a  purchase  of  the  property  with  option 
to  return  if  not  liked. "^  An  option  to  return  a  pur- 

3  State  V.  Betz,  207  Mo.  589,  106  S.  W.  64. 

An  option  contract  of  purchase  or  return  exists  where  the  privilege  to 
return  is  not  dependent  upon  the  character  or  quality  of  the  prop- 
erty sold,  but  upon  the  fact  that  the  contract  gives  the  purchaser 
the  option  to  retain  or  return,  Sturm  v.  Boker,  150  U.  S.  312,  37 
L.  Ed.  1093,  14  S.  Ct.  99. 

A  sale  and  return  is  a  sale  with  the  right  of  the  buyer  to  return  the 
goods  at  his  option,  William  Frantz  &  Co.  v.  Fink,  125  La.  1013, 
52  So.  131. 

4  State  V.  Betz,  supra ;   Gottlieb  v.  Rinaldo,  78  Ark.  123,  93  S.  W.  750, 

6  L.  R.  A.  (N.  S.)  273. 

6  See  Sec.  507,  note  3. 

6  Colton  V.  Wise,  7  Dl.  App.  (Bradw.)  395. 

7  See  Hunt  v.  Wyman,  100  Mass.  198;  Haskins  v.  Dem,  19  Utah  89,  56 

P.  953;  Steinhauer  v.  Henson,  54  Colo.  246,  131  P.  255. 


§  112  LAW  OF  OPTION  CONTRACTS  28 

chase  if  the  purchaser  does  not  approve,  is  differ- 
ent from  an  option  to  purchase  if  the  purchaser 
does  approve;  the  former  is  a  sale  and  delivery; 
the  latter  is  a  bailment  which  may  be  converted  into 
a  sale  at  the  option  of  the  bailee.^ 

Sec.  112.  SAME.  CASES.— An ''option'^  given 
by  an  agreement  for  the  transfer  of  corporate 
stock,  together  with  the  owner's  proxy  as  director, 
in  consideration  of  a  specified  sum  ''to  be  consid- 
ered an  option,"  running  until  a  given  date,  when 
an  additional  sum  was  to  be  paid,  or  in  lieu  thereof 
all  of  the  property  delivered  thereunder  was  to  be 
returned,  is  not  an  option  to  purchase  but  an  option 
to  return.^ 

An  agreement  to  sell  conditioned  on  payment  of 
a  certain  sum  at  a  specified  time,  the  prospective 
purchaser  promising  that  in  case  of  his  failure  to 
pay,  to  return  the  property  delivered  to  him,  is  an 
option  to  purchase,  and  not  a  contract  to  pay  the 
price  or  return  the  property.^  So,  where  plaintiff 
sent  rings  to  defendant  under  an  agreement  that 
defendant  should  keep  the  rings  and  account  to 
plaintiff  for  their  specified  value,  if  she  was  pleased 
with  them,  otherwise  that  she  should  return  them 
to  plaintiff  within  a  reasonable  time,  the  agreement 

8  Steinhauer  v.  Henson,  54  Colo.  246,  131  P.  255. 

1  Guss  V.  Nelson,  200  U.  S.  298,  50  L.  Ed.  489,  26  S.  Ct.  260,  affirming 

8.  c.  14  Okl.  296,  78  P.  170. 

2  Smith  V.  Ivey  Bros.,  119  La.  357,  44  So.  126;  Guss  v.  Nelson,  supra, 

distinguished  by  fact  that  in  the  latter  case  the  agreement  was  to 
pay  or  return;  also  Wailes  v.  Howison,  93  Ala.  375,  9  So.  594. 


29  OPTION  DISTINGUISHED  PROM  LEASE  §  113 

was  not  a  contract  of  sale  and  return,  but  a  mere 
option  to  purchase  or  return/ 


3 


Sec.  113.  OPTION  DISTINGUISHED  FROM 
LEASE. — A  contract,  in  consideration  of  $1,  giv- 
ing the  privilege  of  entering  upon  land  for  a  term 
of  ten  years  to  bore  oil  and  gas  wells  and  in  the 
event  of  the  discovery  of  oil  or  gas  in  paying  quan- 
tities, to  convey  title  to  the  oil,  etc.,  for  a  specified 
royalty,  the  optionee  agreeing  to  bore  the  wells, 
etc.,  and  giving  him  the  right  of  surrender  and  dis- 

3  Gottlieb  V.  Rinaldo,  78  Ark.  123,  93  S.  W.  750,  6  L.  R.  A.   (N.  S.) 
273. 

Agreement  held  not  to  be  one  to  return  or  repay  money  invested,  but 
option  to  sell,  and  that  offer  of  performance  by  optionee  was  neces- 
sary, Delaware  Trust  Co,  v.  Calm,  195  N.  Y.  231,  88  N.  E.  53. 

Option  distinguished  from  sale  with  right  to  rescind,  Hudson  v.  Seeley, 
19  Cal.  App.  213,  124  P.  1051. 

Agreement  held  bailment  or  lease  with  option  to  purchase  and  not 
sale  and  purchase,  American  C.  &  F.  Co.  v.  Altoona  &  B.  C.  R.  Co., 
218  Pa.  519,  67  Atl.  838. 

Lambert  Hoisting  Engine  Co.  v.  Carmody,  79  Conn.  419,  65  Atl.  141. 

Cincinnati  Equipment  Co.  v.  Strang,  215  Pa.  475,  64  Atl.  678. 

Fact  that  price  for  goods  has  not  been  paid  in  full  does  not  prevent 

return,  Ramsey  v.  Hessig  etc.  Co.,  32  Okl.  457,  122  P.  662. 
Time  to  return  and  credit  on  price,  under  option  to  return  part  of 

mules  sold,  Loughridge  v.  Allen,  18  Ky.  894,  38  S.  W.  698,  18  Ky. 

L.  Rep.  894;   stock,  when  no  time  fixed,  Brooks  v.  Trustee  Co.,  76 

Wash.  589,  136  P.  1152. 
Offering  to  return  shares  as  condition  of  maintaining  action  for  price 

paid,  Boynton  v.  Woodbury,  101  Mass.  346;  also  Ketchum  v.  Alex- 
ander, 153  N.  Y.  S.  864. 
Tender  of  deed  of  reconveyance  of  land  necessary  to  defeat  recovery 

on  note  for  price,  Pursley  v.  Good,  94  Mo.  App.  382,  68  S.  W.  218. 
Complaint  to   recover  the   price   must  allege   election  to   return,   etc., 

Bovee  v.  Boyle,  25  Colo.  App.  165,  136  P.  467, 
Failure  to  return  as  an  election  to  purchase,  see  Sees.  828-830. 


§  113  LAW  OF  OPTION  CONTRACTS  30 

charge  of  all  liability  in  case  of  non-performance, 
is  not  a  ''strict  lease"  but  an  option/ 

An  oil  and  gas  lease  granting  to  the  lessee  the 
right  to  mine  for  oil  or  gas  so  long  as  the  same  is 
producing,  and  royalty  and  rentals  are  paid,  but 
which  does  not  bind  the  lessee  to  perform  any  obli- 
gation, is  a  mere  option.^ 

Where  the  defendant  executed  a  mining  lease 
with  option  to  purchase  and,  at  the  same  time,  exe- 
cuted a  mining  deed  which  was  deposited  in  escrow 
in  a  bank,  together  with  a  copy  of  the  lease,  with 
instructions  to  deliver  the  deed  when  the  condi- 
tions of  the  lease  were  complied  with,  the  option 
and  the  instruments  should  be  construed  together 
as  parts  of  the  same  transaction,  and,  when  so 
construed,  must  be  held  to  be  an  option  and  not  a 
lease.^ 

A  contract  providing  that  one  party  will  ''turn 
over"  to  another  a  certain  postoffice  and  gi^dng 
the  latter  an  option  on  the  "store  building"  and 
two  acres  upon  which  it  is  constructed,  at  $300 
''without  rent  if  taken  by  the  first  of  April ;  and  if 
not  the  property  is  to  rent  for  $5  per  month,"  is 
not,  as  to  such  provision,  a  contract  of  purchase 

1  Pittsburg  etc.  Co.  v.  Bailey,  76  Kan.  42,  90  P.  803 ;  see  Owens  v.  Cor- 

sicana  Petroleum  Co.,  (Tex.  Civ.  App.)  160  S.  W.  192. 

2  Cortelyou  v.  Barnsdall,  236  HI.  138,  86  N.  E.  200,  s.  c.  140  111.  App. 

163 ;  Davis  v.  Riddle,  25  Colo.  App.  162,  136  P.  551. 
An  ordinary  mining  lease  with  option  to  purchase  does  not  create  the 
relation  of  vendee  and  vendor,  Milwaukee  Gold  M.  Co.  v.  Tomkins- 
Cristy  Hardware  Co.,   (Colo.  App.)   141  P.  527. 

3  Pollard  V.  Sayre,  45  Colo.  195,  98  P.  816. 

Agreement  held  irrevocable  license  where  plaintiff  went  into  possession, 
made  improvements  in  mine,  and  incurred  expenditures,  Clarno  t. 
Grayson,  30  Ore.  Ill,  46  P.  426. 


31  OPTION  DISTINGUISHED  FROM  LEASE  §  113 

and  sale,  but  is  a  contract  of  tenancy  with  option 
to  purchase.* 

A  contract  by  which  a  party  is  to  pay  the  owner 
a  rent  of  six  per  cent  on  the  cost  of  a  building, 
with  the  privilege  of  becoming  the  owner  on  pay- 
ing the  price,  creates  the  relation  of  landlord  and 
tenant.^ 

A  stipulation  in  a  contract  selling  land  that  if 
the  installments  of  the  price  are  not  paid  the  owner 
shall  be  paid  rental,  creates  the  relation  of  land- 
lord and  tenant  with  option  to  purchase.^ 

A  contract  reciting  that  the  first  party,  in  consid- 
eration of  $500  to  him  paid,  leases  to  the  second 
party,  for  a  certain  term,  certain  railroad  cars 
and  track,  and  providing  that  if  the  second  party 
shall  return  them  before  the  expiration  of  the 
term,  he  shall  pay  for  the  use  thereof  at  the  rate 
of  $200  per  month  till  the  return  thereof,  and  giv- 
ing the  second  party  the  right,  at  any  time  before 
returning  them,  to  buy  them  at  a  price  not  exceed- 
ing $900,  is  a  lease  with  the  pri\dlege  of  purchase 
during  the  term,  the  rent  not  applying  on  the  pur- 
chase price/ 

A  piano  was  leased  for  a  certain  sum  payable 
quarterly,  the  lease  giving  the  lessor  an  option  to 

4  Powers  V.  Myers,  25  Okla.  165,  105  P.  674. 

5  Municipality  No.  1  v.  New  Orleans,  5  La.  Ann.  761. 

6  Hodnett  v.  Mann,  10  Ga.  App.  666,  73  S.  E.  1082 ;   see  also  Miller  v. 

Citizen's  etc.  Ass'n,  50  Ind.  App.  132,  98  N.  E.  70. 

7  Braun  v.  Wisconsin  Rendering  Co.,  92  Wis.  245,  66  N.  W.  196 ;  also 

Ludden  &  Bates  Southern  Music  House  v.  Dusenberry,  27  S.  C.  464, 
4  S.  E.  60. 


§  113  LAW  OF  OPTION  CONTRACTS  32 

terminate  it  at  any  time,  and  the  lessee  an  option 
to  buy  and  receive  credit  on  the  price  for  the  rent 
paid.  The  lessee,  before  either  election  is  made, 
holds  as  bailee  only.® 

Where  one  delivers  to  another  a  certain  amount 
of  money  with  which,  as  his  agent,  to  purchase  live 
stock,  and  the  purchase  is  made,  the  title  to  the 
stock  vests  in  the  principal,  and  if  he  agrees  that 
the  agent  shall  use  the  stock  for  a  certain  rental 
and  further  agrees  that  the  agent  may,  whenever 
he  wishes  to  do  so,  purchase  the  stock  from  the 
principal  for  the  cost,  with  interest,  the  latter 
agreement  is  a  lease  with  option  to  purchase  and 
not  a  conditional  sale.® 

Other  decisions  on  this  subject  will  be  found 
collected  in  the  note.^** 

8  Crist  V.  Kleber,  79  Pa.  290;  Wheeler  &  Wilson  Mfg.  Co.  v.  Heil,  115 

Pa.  487,  8  Atl.  616,  2  A.  S.  E.  575. 

9  Evans  v.  Napier,  111  Ga.  102,  36  S.  E.  426. 

10  Offer  of  lease  and  not  lease,  Giering  v.  Hartford  T.  Seminary,  86  Conn. 
208,  84  Atl.  930. 

Renewal  clause  held  not  mutual,  but  as  giving  lessee  option  to  renew, 
Swank  v.  St.  Paul  City  Ey.  Co.,  72  Minn.  380,  75  N.  W.  594. 

Lease  and  option  therein  separate  agreements  in  sense  that  notice  ter- 
minating lease  does  not  defeat  option,  Mathews  Slate  Co.  v.  New 
Empire  Slate  Co.,  122  Fed.  972. 

New  lease  not  surrender  of  option  in  original,  Lester  Agricultural 
Chemical  Wks.  v.  Selby,  68  N.  J.  Eq.  271,  59  Atl.  247. 

Renewal  held  to  embrace  option  in  first  lease,  Pflum  v.  Spencer,  108 
N.  Y.  S.  344,  123  App.  Div.  742. 

Renewal  of  lease  construed  to  continue  option  to  purchase  in  original 
lease,  Madison  Athletic  Ass'n  v.  Brittin,  60  N.  J.  Eq.  160,  46  Atl.  652, 

Instrument  held  lease  and  not  option,  Benedict  v.  Pincus,  191  N.  Y. 
377,  84  N.  E.  284;  Brewer  v.  Broadwood  L.  E.,  22  Ch.  Div.  105. 

Instrument  held  "contract"  and  not  lease,  City  of  Los  Angeles  v. 
Water  Co.,  124  Cal.  368,  57  P.  210. 


33  OPTION   DISTINGUISHED   FROM   AGENCY  §  114 

Sec.  114.  OPTION  DISTINGUISHED  FROM 
AGENCY. — The  question  whether  a  particular 
agreement  is  one  giving  an  option  to  purchase,  or 
is  a  mere  authorization  to  sell  for  a  conmiission,  is 
one  frequently  arising.  The  rule,  of  course,  here 
as  elsewhere,  is  that  the  intention  of  the  parties 
controls.  A  writing  empowering  or  authorizing  a 
real  estate  broker  to  sell  land  for  a  certain  sum 
and  binding  the  broker  to  accept,  as  his  remunera- 
tion, any  amount  which  he  might  obtain  in  excess 
of  that  sum,  is  a  contract  of  agency  and  not  an 

10  Lease  with  option  to  buy,  Wellmaker  v.   Wheatley,   123   Ga.   201,  51 

S.  E.  436;  Grummer  v.  Price,  101  Ark.  611,  143  S.  W.  95;  Crawford 

V.  Cathey,   (Ga.)   85  S.  E.  127;  Powell  v.  Eckler,  96  Mieh.  538,  56 

N.  W.  1,  piano ;  Powell  v.  Plank,  141  Mo.  App.  406,  125  S.  W.  836, 

,  mine,  holding  over  optionee  becomes  tenant  at  will. 

Lease,  Jarvis  v.  Sutton,  3  Lid.  289;   Crinkley  v.  Egerton,  113  N.  C. 

444,  18  S.  E.  669. 
Preference  right  to  purchase,  Slaughter  v.  Mallet  L.  &  C.  Co.,  141  Fed. 

282,  72  C.  C.  A.  430. 

Delivery  of  machine  for  test,  sale.  Star  etc.  Co.  v.  McLeod,  122  Ky. 
564,  92  S.  W.  558,  29  Ky.  L.  Eep.  84. 

Waiver  of  option  in  lease  by  paying  rent  after  election,  etc.,  Hartwell 

V.  Black,  48  lU.  301. 
Optionee  in  possession  becomes   trespasser,   on   expiration   of   option, 

Henry  v.  Perry,  110  Ga.  630,  36  S.  E.  87. 
Lease  of  sewing  machine,  with  option  to  purchase  may  not  be  treated 

as  sale.  Singer  Sewing  Machine  Co.  v.  Independent  Waist  Band  Mfg. 

Co.,  141  N.  Y.  S.  488. 

Apportionment  of  rent  on  exercise  of  option  to  purchase,  Withington 
V.  Nichols,  187  Mass.  575,  73  K  E.  855 ;  Church  v.  Standard  etc.  Co., 
65  N.  Y.  S.  116,  52  App.  Div.  407,  no  additional  rent  if  optionor  not 
*     able  to  convey  good  title.    See  Sec.  519. 

Effect  of  exercise  of  option  on  lease,  see  Sec.  871. 

Under  extension  lessee  bound  to  pay  taxes.  Wood  v.  Company,  184 
Mass.  523,  69  N.  E.  364. 

Contract  between  city  and  water  company  held  not  a  lease  and  there- 
fore not  entitling  it  to  take  possession  of  the  water  works  at  the  end 
of  the  30-year  period  without  paying  or  tendering  the  value  of  the 
plant.  City  of  Los  Angeles  v.  Los  Angeles  City  Water  Co.,  124  Cal. 
368,  57  P.  210. 

3 — Option   Contracts. 


§  114  LAW  OF  OPTION  CONTRACTS  34 

option  to  the  broker  to  purchase  the  land/  On 
the  other  hand,  a  contract  by  the  owner  of  land 
authorizing  a  real  estate  agent,  within  a  certain 
time,  to  sell  the  land  for  a  specified  sum,  and  agree- 
ing to  pay  him  a  commission  on  whatever  he  might 
realize  therefrom  above  that  amount,  confers  an 
option,  which  if  exercised,  creates  between  them 
the  relation  of  vendor  and  purchaser  under  a  con- 
tract of  sale  rather  than  the  relation  of  principal 
and  agent,  and  a  sale  thereunder  is  in  the  capacity 
of  vendor  on  his  own  account  and  not  on  account 
of  the  owners.^ 

In  another  case,  defendants  agree  that,  in  con- 
sideration of  plaintiff's  undertaking  to  use  his  best 
efforts  to  sell  their  land,  they  would  transfer  the 
land  to  plaintiff  or  his  appointee,  on  payment  of  a 
certain  sum  whenever  called  upon  to  do  so.  This 
was  held  to  be  an  option  and  not  a  mere  authority 
to  seU.^ 

Plaintiff,  in  consideration  of  $5,000,  by  power  of 
attorney,  appointed  M  its  agent  to  sell  certain  land 

1  Tate  V.  Aitken,  5  Cal.  App.  505,  90  P.  836;  see  Van  Loan  v.  Glaze,  11 

Cal.  App.  750,  106  P.  250;  Mitchel  v.  Gray,  8  Cal.  App.  423,  97  P. 
160,  not  coupled  with  interest;  Carter  v.  Love,  206  Ul.  310,  69  N.  E. 
85;  Raddle  v.  Lindemann,  151  111.  App.  441;  Faraday  Coal  Co.  v. 
Owens,  26  Ky.  L.  Rep.  243,  80  S.  W.  1171,  agency  revoked  by  elec- 
tion to  purchase;  Young  v.  Ruhwedel,  119  Mo.  App.  231,  96  S.  W. 
228 ;  Barbar  v.  Martin,  67  Neb.  445,  93  N.  W.  722 ;  Chezum  v.  Kreigh- 
baum,  4  Wash.  680,  30  P.  1098,  32  P.  109 ;  Chesbrough  v.  Vizard  Inv. 
Co.,  156  Ky.  149,  160  S.  W.  725. 

2  Robinson  v.  Easton  etc.  Co.,  93  Cal.  80,  28  P.  796,  27  A.  S.  R.  167 ;  see 

Southack  v.  Lane,  65  N.  Y.  S.  629,  reversing  52  N.  Y.  S.  687,  option 
for  stated  price;  Brackenridge  v.  Claridge,  91  Tex.  527,  44  S.  W. 
819,  43  L.  R.  A.  593 ;  Lawrence  v.  Pederson,  34  Wash.  1,  74  P.  1011. 

8  Kellow  V.  Jory,  141  Pa.  144,  21  Atl.  522 ;  see  Jolliflfe  v.  Steele,  9  Cal. 
App.  212,  98  P.  544;  Davenport  v.  Corbett,  98  N.  Y.  S.  403,  112 
App.  Div.  382;  see  also  Hahl  v.  McPherson,  (Tex.  Civ.  App.)  133 
S.  W.  515;  Alger  v.  Keith,  105  Fed.  105,  44  C.  C.  A.  371. 


35  OPTION  OR  MORTGAGE  OR  DEED  §  115 

at  any  time  within  thirty  days  at  a  price  of  not 
less  than  $500,000.  It  was  held  the  agreement  was 
not  one  of  option  but  one  of  agency,  notwithstand- 
ing the  fact  that,  in  the  event  of  sale,  the  $5,000  was 
to  be  applied  on  the  purchase  price/ 

Sec.  115.  OPTION  DISTINGUISHED  FROM 
MORTGAGE  OR  DEED.— Plaintiff  claimed  title 
to  land  under  a  quitclaim  deed  from  the  grantee  in 
an  instrument  executed  by  defendants  who  owned 
the  land,  and  which  granted,  bargained  and  sold 
the  same  on  condition,  among  others,  that  on  a 
day  named  they  should  receive  $100  per  acre  for 
the  land,  a  certain  sum  in  cash,  and  the  balance 
in  notes,  and  providing  that,  thereupon,  they  would 
deliver  to  such  grantee,  a  perfect  warranty  deed 
conveying  the  fee,  and  it  was  held  that  notwith- 
standing the  words  ''grant,  bargain  and  sell"  in 
the  instrument,  it  was  a  mere  option  which  gave 
the  grantee  or  his  successors  no  interest  in  the 

4  Miller  v.  Louisville  etc.  E.  Co.,  83  Ala.  274,  4  So.  842,  3  A.  S.  R.  722. 

Agreement  to  sell  "cash  on  delivery  of  deed  or  one-half  on  time  if 
terms  can  be  agreed  upon,"  is  mere  option  or  agency  and  not  con- 
tract of  sale,  Wallace  v.  Figone,  107  Mo.  App.  362,  8  S.  W.  492. 

Agreement  held  to  constitute  selling  agent  with  option  to  buy,  Burt  v. 
Stringfellow,  (Utah)  143  P.  234;  Walter  C.  Reese  Co.  v.  House, 
162  Cal.  740,  124  P.  442 ;  Shepard  v.  Pabst,  149  Wis.  35,  135  N.  W. 
158. 

Agreement  in  form  of  option  held  brokerage  contract,  Axe  v.  Tolbert, 
179  Mich.  556,  146  N.  W.  418. 

Contract  authorizing  agent  to  sell  and  binding  owner  to  execute  con- 
veyance and  making  writing  irrevocable,  is  power  of  attorney,  Meek 
V.  Hurst,  223  Mo.  688,  122  S.  W.  1022. 

Contract  of  sale  not  converted  into  agency  by  supplemental  agree- 
ment that  any  excess  in  price  obtained  should  be  equally  divided, 
Gutierrez  del  Arroyo  v.  Graham,  227  U.  S.  181,  57  L.  Ed.  472,  33 
S.  Ct.  248. 


§  115  LAW  OF  OPTION  CONTRACTS  36 

land  after  the  time  fixed  for  performance  had 
passed  without  performance  on  his  part.^ 

A  contract  purporting  to  sell  mining  claims,  by 
plaintiff  to  third  parties,  for  a  certain  sum,  to  be 
paid  on  or  before  a  certain  date,  and  a  deed  pur- 
porting to  convey  the  title  to  the  purchasers  and 
left  in  their  possession,  but  found  by  the  court  not 
intended  as  an  absolute  deliver}^,  and  a  reconvey- 
ance by  them  to  plaintiff  placed  in  escrow  to  be 
delivered  to  plaintiff  upon  failure  of  purchasers 
to  make  payment,  all  bearing  the  same  date,  are 
the  same  transaction  and  constitute  an  ''option"  in 
the  third  parties  to  purchase.^ 

A  conveyed  certain  land  to  B  and  at  the  same 
time  and  as  part  of  the  same  transaction  B  entered 
into  an  agreement  giving  A  the  right  to  repurchase 
within  a  certain  time  and  upon  certain  conditions. 
The  agreement  under  the  circumstances  was  held  to 
be  an  "option"  and  not  a  mortgage.  The  court 
reached  this  conclusion  largely  from  the  fact  that 
there  was  no  obligation  on  the  part  of  A  to  repur- 
chase, and  that  the  amount  to  be  paid  by  A,  on  the 
repurchase,  was  practically  the  entire  value  of  the 
property.^ 

1  Dunnaway  v.  Day,  163  Mo.  415,  63  S.  W.  731, 

The  same  conclusion  was  reached  in  a  similar  agreement  in  Borst  v. 
Simpson,  90  Ala.  373,  7  So.  814. 

2  Conway  v.  Hart,  129  Gal.  480,  62  P.  44 ;  see  Sandoval  v.  Eandolph,  222 

U.  S.  161,  56  L.  Ed.  142,  32  S.  Ct.  48 ;  White  v.  Bank  of  Hanford, 
148  Cal.  552,  83  P.  698. 

8  Jeffreys  v.  Charlton,  72  N.  J.  Eq.  340,  65  Atl.  711;  Eoberts  v.  Norton, 
66  Conn.  1,  33  Atl.  532. 
To  the  same  effect:  Neeson  v.  Smith,  47  Wash.  386,  92  P.  131;  Feudt- 
ner  v.  Ross,  74  N.  J.  Eq.  214,  69  Atl.  190;  Whitting,  Succession  of, 
121  La.  501,  46  So.  606,  15  Ann.  Cas.  379;  Watts  v.  Kellar,  56  Fed. 
1,  5  C.  C.  A.  394 ;  Woods  v.  McGraw,  127  Fed.  914,  63  C.  C.  A.  556, 
the  theory  advanced  was  that  the  agreement  was  an  extension  of 
time  to  redeem. 


37  MISCELLANEOUS   CONTRACTS   DISTINGUISHED  §  116 

An  agreement  executed  by  the  beneficiary  of  a 
trust  deed,  on  foreclosure,  to  sell  the  property  to 
any  one  whom  the  optionee  should  direct,  before  a 
certain  day,  is  an  option  and  is  enforceable  by  the 
optionee.* 

Sec.  116.  OPTION  DISTINGUISHED  FROM 
OTHER  KINDS  OF  CONTRACTS.  MISCEL- 
LANEOUS.— A  subsequent  agreement  to  resell  the 
collaterals  to  the  maker  of  a  note,  on  his  payment, 
within  a  certain  time,  of  the  total  amount  the 
endorser  had  paid  out,  is  an  option  to  repurchase 
and  not  a  pledge.^  An  agreement  by  an  applicant 
for  a  patent  to  a  mining  claim  which  right  had  been 
adversed  by  another  that,  in  consideration  of  the 
dismissal  of  such  adverse,  he  would  convey  when 
the  patent  was  obtained,  on  demand  and  payment 

3  Conner  v.  Clapp,  37  Wash.  299,  79  P.  929,  case  where  third  party  ad- 

vanced money  to  ' '  take  up ' '  option. 
Doying  v.  Chesebrough,  (N.  J.)  36  Atl.  893,  case  where  grantee  in  deed 
intended  as  mortgage  gave  lease  with  option  to  repurchase.   See  Butt 
V.  Bondurant,  23  Ky.  (7  T.  B.  Mon.)  421,  option  to  repurchase. 

In  Ensworth  v.  Griffiths,  5  Bro.  P.  C.  184,  2  Eng.  Eeprint  615,  dis- 
tinction ia  pointed  out  between  a  contract  originally  founded  upon 
a  loan  of  money,  for  repurchase  of  the  property  mortgaged  upon  a 
certain  event,  and  a  contract  made  after  a  mortgage  is  entered  into 
for  absolute  repurchase  by  the  mortgagor.  In  the  latter  case  the 
failure  of  the  mortgagee  to  exercise  his  option  right  to  repurchase 
strictly  in  time,  cuts  off  his  legal  and  equitable  right.  See  Jeffreys 
V.  Charlton,  supra;  Neeson  v.  Smith,  supra;  Owens  v.  Williams, 
130  N.  C.  165,  41  S.  E.  93. 

4  Alston  V.  Connell,  140  N.  C.  485,  53  S.  E.  292. 

1  Cantwell  v.  Johnson,  236  Mo.  575,  139   S.  W.   365 ;   see   Sayward  y. 
Houghton,  119  Cal.  545,  51  P.  853,  52  P.  44. 
Option  is  personal  property  and  the  subject   of  pledge,  Singling  t. 
Smith  Eiver  Dev.  Co.,  48  Mont.  467,  138  P.  1098. 


§  116  LAW  OP  OPTION  CONTRACTS  38 

of  a  certain  amount,  did  not  create  a  trust  but  was 
an  ''option."^ 

But  when  plaintiff  received  a  deed  for  property 
upon  an  agreement  at  the  time  of  the  execution  of 
the  deed  that  he  would  convey  the  land  to  defend- 
ant to  whom  the  vendor  had  agreed  to  give  an 
option,  on  the  pajnnent  by  defendant  of  a  certain 
consideration,  a  parol  trust  was  created  in  favor 
of  defendant,  enforceable  against  plaintiff,  as  trus- 
tee of  the  legal  title.^ 

2  Stevens  v.  McChrystal,  150  Fed.  85. 

Duty  of  trustee  giving  option  to  get  best  price,  Callaway  v.  Hubner, 
99  Md.  529,  58  Atl.  362. 

See  Beulah  Marble  Co.  v.  Mattiee,  22  Colo.  547,  45  P.  432,  not  part- 
nership. 

3  Sykes  v.  Boone,  132  N.  C.  199,  43  S.  E.  645,  95  A.  S.  E.  619. 

An  option  in  the  purchaser  to  pay  or  to  refuse  to  pay  for  the  prop- 
erty is  not  essential  to  a  conditional  sale,  Dunlop  v.  Mercer,  156 
Fed.  545,  86  C.  C.  A.  435,  but  see  Andrews  v.  Colorado  Sav.  Bank, 
20  Colo.  313,  36  P.  902. 

Option  to  secure  purchaser  and  not  option  to  purchase.  Hale  v.  Triest, 
134  N.  Y.  S.  673,  150  App.  Div.  166. 

Loan  with  option.  Bangs  v.  Nordheimer,  66  Barb.  (N.  Y.)  627. 

Agreement  for  termination  or  renewal  of  partnership,  Floyd  v.  Storrs, 
144  Mass.  56,  10  N.  E.  743. 

Option  on  water,  etc.,  works  and  plants:  City  of  Indianapolis  v.  Gas 
Co.,  144  Fed.  640,  75  C.  C.  A.  442 ;  Quinby  v.  Gas  Co.,  140  Fed.  362 ; 
City  and  County  of  Denver  v.  New  York  Trust  Co.,  229  U.  S.  123, 
57  L.  Ed.  1101,  33  S.  Ct.  657,  reversing  187  Fed.  890,  11  C.  C.  A.  224; 
Montgomery  Gaslight  Co.  v.  City,  87  Ala.  245,  6  So.  113,  4  L.  R.  A. 
616;  City  of  Los  Angeles  v.  Water  Co.,  124  Cal.  368,  57  P.  210; 
Town  of  Southington  v.  Company,  80  Conn.  646,  69  Atl.  1023 ;  Val- 
paraiso City  Water  Co.  v.  Valparaiso,  33  Ind.  App.  193,  69  N.  E, 
1018;  Overall  v.  Madisonville,  125  Ky.  684,  102  S.  W.  278,  31  Ky. 
L.  Eep.  278,  12  L.  R.  A.  (N.  S.)  433,  lighting  plant;  Rockport  Water 
Company  v.  Rockport,  161  Mass.  279,  37  N.  E.  168;  Mayo  v.  Dover 
etc.  Fire  Co.,  96  Me.  539,  53  Atl.  62;  Farmington  Village  Corp.  v. 
Farmington  W.  Co.,  93  Me.  192,  44  Atl.  609;  Jersey  City  v.  Flynn, 
74  N.  J.  Eq.  104,  70  Atl.  497;  Town  of  Bristol  v.  Waterworks,  25 
R.  I.  189,  55  Atl.  710;  Cherryvale  Water  Co.  v.  Cherryvale,  65  Kan. 
219,  69  P.  176;  Connor  v.  City  of  Marshfield,  128  Wis.  280,  107 
N.  W.  639;  Town  of  Boonton  v.  United  Water  Supply  Co.,  83 
N.  J.  Eq.  536,  91  Atl.  814. 


39  OPTION  TO  TERMINATE  CONTRACT  §  117 

Sec.  117.  OPTION  TO  TERMINATE  CON- 
TRACT.— A  continuing  contract  may  contain  a 
provision  making  it  terminable  at  the  option  of 
one,  or  either  of  the  parties,  and  such  provision 
is  valid  and  when  exercised  will  be  enforced  by 
the  courts  if  not  contrary  to  equity  and  good 
conscience.^ 

There  is  a  class  of  contracts  like  those  for  sup- 
plying gas  and  other  commodities  in  which  the  time 
limit  is  not  specified.  These  contracts  are  con- 
strued by  the  courts  as  running  for  a  reasonable 
time  and  as  terminable  by  either  party  upon  giving 
reasonable  notice.^ 

A  contract  reserving  the  right  to  one  of  the  par- 
ties to  terminate  it  when  he  becomes  dissatisfied, 
ordinarily  implies  that  the  party  must  have  reason- 
able grounds  for  so  doing,^  but  this  rule  does  not 
apply,  it  seems,  where  the  term  is  left  indefinite.* 

1  Monissey  v.  Broomal,  37  Neb.  766,  56  N.  W.  383. 

2  McCuUough-Dalzell  C.  Co.  v.  Philadelphia  Co.,  223  Pa.  336,  72  Atl.  633 ; 

Victoria  L.  Co.  v.  Hinton,  166  Ky.  674,  161  S.  W.  1109. 

3  Clark  V.  Kelley,  (Iowa)  109  N.  W.  292. 

Gould  V.  McCormick,  75  Wash.  61,  134  P.  676,  48  L.  R.  A.  (K  S.)  765, 
Adii.  Gas.  1915A,  710,  discharge  of  architect  employed  to  superin- 
tend construction  of  building  to  entire  satisfaction  of  employer,  hold- 
ing when  it  is  doubtful  if  contract  gives  right  to  discharge  for  good 
cause  or  arbitrarily  the  former  construction  will  be  adopted,  citing 
Hawkins  v.  Graham,  149  Mass.  284,  21  N.  E.  312,  14  A.  S.  E.  422, 
and  Doll  v.  Noble,  116  N.  Y.  230,  22  N.  E.  406,  5  L.  E.  A.  554, 
15  A.  S.  E.  398. 

The  rule  is  that  contracts  containing  alternative  stipulation  will  be 
construed  strictly  in  favor  of  the  party  bound,  Kolachny  v.  Gal- 
breath,  26  Okla.  272,  110  P.  902. 

When  the  right  to  discharge  is  reserved  in  the  contract  of  employ- 
ment the  master  may  discharge  before  the  expiration  of  the  term 
of  employment  if  in  good  faith  he  is  not  satisfied  with  the  services 
rendered,  Bridgeford  &  Co.  v.  Meagher,  144  Ky.  479,  139  S.  W.  750. 

4  Victoria  L.  C.  v.  Hinton,  156  Ky.  674,  161  S.  W.  1109. 


§  117  LAW  OP  OPTION  CONTRACTS  40 

The  exercise  of  a  right  to  terminate  is  not  a 
breach  of  the  contract,^  and  the  party  terminating 
is  not  entitled  to  damages,  the  other  party  not  being 
in  default,*^  unless,  of  course,  the  contract  contem- 
plates and  provides  for  an  adjustment  of  the  rights 
and  liabilities  of  the  parties,^  or  for  the  payment 
of  a  sum  on  notice  of  termination.^ 

A  contract  covering  a  period  of  time  but  con- 
taining a  condition  that  it  may  be  terminated  before 
that  time,  will  remain  effective  for  the  full  term, 
unless  the  condition  of  termination  is  fully  com- 
plied with.^  Where,  therefore,  a  particular  notice, 
or  a  specified  time,  is  required  to  make  the  notice 
effective,  a  notice  not  conforming  to  the  contract, 
or  not  given  at  the  time  specified,  does  not  have 
the  effect  of  terminating  the  contract/ '^.  With 
reference  to  mutuality,  it  would  seem  the  rule 

5  Over  V.  Byram  Foundry  Co.,  37  Ind.  App.  452,  77  N.  E.  302. 

6  Walton  etc.  Co.  v.  McKitrick,  141  Ky.  415,  132  S.  W.  1046. 

7  Harlow  v.  Oregonian  Pub.  Co.,  45  Ore.  520,  78  P.  737,  contract  for 

newspaper  route. 

8  Ward  V.  American  Health  Food  Co.,  119  Wis.  12,  96  N.  W.  388,  ad- 

vertising contract  in  street  cars,  holding  that  there  was  no  termina- 
tion because  the  specified  amount  was  not  paid  at  the  time  of  notice 
to  terminate. 

9  Home  Ins.  Co.  v.  Hamilton,  143  Mo.  App.  237,  128  S.  W.  273. 

A  contract  which  is  terminable  at  the  vsdll  of  either  party  on  reasonable 
notice,  is  obligatory  upon  the  parties  so  long  as  they  continue  to  act 
under  it,  that  is,  until  termination,  Kenny  v.  Knight,  119  Fed.  475. 

10  Cedar  Rapids  &  I.  C.  Ry.  &  L.  Co.  v.  Chicago  R.  I.  &  P.  Ry.  Co.,  145 
Iowa  528,  124  N.  W.  323,  a  contract  affecting  third  persons;  Mayo 
H.  &  Co.  V.  Phil.  T.  M.  Co.,  105  Va.  486,  53  S.  E.  967;  McClelland  v. 
McLemore,  (Tex.  Civ.  App.)  70  S.  W.  224,  3  days'  notice  to  termi- 
nate building  contract. 
Brown  v.  Raisin  Mon.  Co.,  98  Md.  1,  55  Atl.  391,  holding  Sundays 
should  not  be  counted  in  computing  the  10  days'  time,  suspension 
during  which  worked  a  termination  of  the  contract  to  remove  tar. 


41  OPTION  TO  TERMINATE  CONTRACT  §  117 

is  that  unless  the  option  to  terminate  the  con- 
tract is  reserved  to  either  party,  it  is  lacking 
in  that  essential.  Thus,  a  contract  between  a  rail- 
road company  and  a  telephone  company  which 
gives  the  latter  the  privilege  of  placing  telephones 
in  two  depots,  of  the  former,  in  consideration  of 
free  telephone  service  for  it,  but  subject  to  ter- 
mination at  the  will  of  one,  with  the  stipulation  that 
no  corresponding  right  shall  be  exercised  by  the 
other,  lacks  mutuality/^ 

A  provision  in  a  contract  employing  a  baseball 
player  for  the  season  of  1913  and  obligating  him 
to  contract  to  render  similar  services  for  the  em- 
ployer during  the  year  1914,  when  the  employer 
by  the  contract  was  entitled  to  terminate  it  at  any 
time  on  ten  days'  notice,  is  void  for  want  of 
mutuality.  ^^ 

But  a  contract  whereby  one,  in  consideration  of 
a  release  of  a  claim  for  damages  against  him,  agrees 
to  employ  the  claimant  at  certain  wages  so  long  as 
the  works  of  the  former  are  kept  running,  or  until 
the  employee  shall  see  fit  to  quit,  is  not  void,  either 
for  indefiniteness  of  term  employed,  or  for  want  of 
mutuality.^* 

11  Great  N.  By.  Co.  v.  Sheyenne  T.  C,  27  N.  D.  256,  145  N.  W.  1062,  suit 
for  equitable  relief  by  injunction;  see  also  American  A.  C.  Co.  v. 
Kennedy,  103  Va.  171,  48  S.  E.  868. 
There  is  no  lack  of  mutuality  when  the  contract  gives  the  purchaser  of 
real  estate  the  option  to  rescind  for  breach  of  condition,  or  waive  the 
condition.  Catholic  F.  M.  Soc.  v.  Oussani,  215  N.  Y.  1,  109   N.  E.  80. 

l2Wheeghan  v.  Killefer,  215  Fed.  168,  affd.  215  Fed.  289;  American 
L.  B.  C.  V.  Chase,  149  N.  Y.  S.  6;  Brooklyn  B.  C.  v.  McGuire,  116 
Fed.  782;  Cincinnati  Exhibition  Co.  v.  Marsans,  216  Fed.  269,  in- 
junction; Philadelphia  Ball  Club  v.  Lajoie,  202  Pa.  210,  51  Atl.  973; 
Metropolitan  Exhibition  Co.  v.  Ewing,  (C.  C.)  42  Fed.  198,  7  L.  K.  A, 
381,  injunction;  see  Sec.  1115. 

18  Carter  White  Lead  Co.  v.  Kinlin,  47  Neb.  409,  66  N.  W.  536. 


§  118  LAW  OF  OPTION  CONTRACTS  42 

Sec.  118.  ALTERNATIVE  STIPULATION. 
— The  rule  is  that  where  one  of  the  parties  to  a 
contract  obligates  himself  to  do  one  of  two  things 
on  the  performance  of  a  certain  act  by  the  other, 
the  one  making  such  alternative  promise  has  the 
right  to  elect  which  alternative  he  will  perform, 
provided  he  makes  such  election  before  he  is  in 
default;  but  if  he  fails  to  make  such  election  in 
time,  then  the  promisee  may  elect  which  alternative 
he  will  accept.^  Thus,  an  agreement  by  A  to  deliver 
to  B  from  700  to  1,000  barrels  of  meal,  gives  A  the 
right  to  deliver  any  number  of  barrels  from  700  to 
1,000.^  An  agreement  by  A  to  pay  B  $8  per  acre 
for  land  in  two  separate  payments,  and  in  case  of 
default  in  payment,  then  $9  per  acre  at  a  further 
specified  time,  gives  A  the  option  right  to  pay  the 
$3  per  acre  at  the  fixed  time,  or  $9  per  acre  at  the 
subsequent  specified  time.^  A  written  promise  to 
pay  a  certain  siun  in  one  year  for  a  clock, ' '  or  inter- 
est on  the  same  and  the  clock  uninjured,"  gives  the 
promisor  an  election  to  pay  the  money  or  deliver 
the  clock  and  pay  the  interest.^  A  contract  by 
A  to  deliver  to  B  all  the  lambs  of  a  flock  sold  B, 
for  a  certain  time  and  price,  the  amount  to  be  cred- 

1  Kramer  v.  Ewing,  10  Okl.  357,  61  P.  1064;  also  Patchin  v.  Swift,  21 
Vt.  292;  Collins  v.  Whigham,  58  Ala.  438,  also  holding  an  election 
once  made  is  irrevocable;  Markall  v.  Ferguson,  23  Cal.  65;  Childs  v. 
Fischer,  52  Ul.  205;  Phillips  v.  Cornelius  (Miss.),  28  So.  871. 

If  one  of  the  alternatives  becomes  impossible  or  can  not  be  legally 
performed,  then  the  other  must  be  performed,  Eosenthal  v.  Perkins, 
123  Cal.  240,  55  P.  804. 

2Disborough  v.  Neilson,  3  Johns.  Gas.  (N.  Y.)  81;  also  White  v.  Ton- 
cray,  9  Leigh  (Va.)  347;  Illinois  Glass  Co.  v.  Three  States  L.  Co.,  90 
ni.  App.  599. 

8  Smith  V.  Sanborn,  11  Johns.   (N.  Y.)  59. 

4  Barker  v,  Jones,  8  N.  H.  413. 


43  ALTERNATIVE  STIPULATION  §  118 

ited  on  the  note  executed  by  A  for  the  purchase 
price  when  the  sheep  are  sold,  was  intended  to 
provide  a  manner  for  paying  the  note  in  Iambs 
instead  of  money  and  it  was  optional  with  A  to  pay 
the  note  either  in  money  or  lambs.  ^  Where  a  debtor 
has  the  election  to  pay  either  in  money  or  prop- 
erty, within  a  certain  time,  and  he  fails  to  exercise 
the  option  and  make  a  tender  at  the  time  fixed,  he 
loses  his  option  and  the  seller  has  the  right  to 
demand  the  money.® 

An  agreement  to  lease  provided  that  plaintiff,  a 
new  tenant,  should  be  entitled  to  take  the  fixtures 
on  the  premises,  at  their  appraised  value,  or  to 
purchase  them  direct  from  the  old  tenant,  and  that, 
at  the  expiration  of  the  lease,  plaintiff  would  buy 
the  fixtures  from  him.  Under  this  agreement  the 
new  tenant  was  bound  to  purchase  the  fixtures,  his 
only  option  being  as  to  the  mode  of  purchase."^  A 
contract  for  the  payment  of  a  certain  sum  of  money 
in  specified  articles  does  not  give  the  debtor  an  elec- 
tion to  deliver  the  articles  at  the  prices  specified, 
or  to  pay  the  sum  in  money,  but  requires  the  deliv- 
ery of  the  specified  articles.^ 

A  contract  stipulating  that,  in  consideration  of 
described  personal  property  delivered  by  the  pur- 
chaser to  the  vendor,  the  latter  shall  execute  and 
deliver  a  deed  to  the  purchaser  of  real  estate 
described,  and  providing  for  a  return  of  the  per- 
sonal property  if  the  vendor  shall  fail  or  refuse, 

6  Longfellow  v.  Huffman,  57  Ore.  388,  112  P.  8. 

6  Haskins  v.  Dem,  19  Utah  89,  56  P.  953,  holding  the  contract  is  not  one 

of  bailment. 

7  Street  v.  Chicago  W.  &  S.  Co.,  157  Dl.  605,  41  N.  E.  1108. 

8  Wilson  V.  George,  10  N.  H.  445, 


§  118  LAW  OF  OPTION  CONTRACTS  44 

from  any  cause,  to  execute  and  deliver  the  deed, 
does  not  give  the  vendor  the  right  to  elect  whether 
to  return  the  personal  property  or  execute  a  deed, 
but  requires  him  to  return  the  personal  property 
when  his  failure  to  convey  is  justified,  and  the  con- 
tract is  in  form  subject  to  specific  performance.^ 

Where  a  person  covenants  with  another  to  pay 
a  certain  sum  of  money  or  return  a  bond  when 
called  for  by  the  latter,  he  is  unconditionally  bound 
to  pay  the  money  if  the  latter  does  not  exercise  his 
privilege  of  calling  for  the  bond/° 

A  contract  by  a  father  to  restore  a  daughter  to 
her  mother  or,  for  failure  so  to  do,  to  become  liable 
to  the  mother  in  a  certain  sum  as  stipulated  dam- 
ages, does  not  give  the  father  the  option  to  pay  the 
penalty,  or  rid  himself  of  the  obligation,  where 
tendering  the  penalty  he  was  bound,  by  the  con- 
tract, to  pay  costs  of  legal  proceedings  by  the 
mother  to  obtain  the  child/ ^ 

If,  by  the  terms  of  an  agreement,  an  option  is 
reserved  to  one  party  to  determine  or  to  consum- 
mate it  as  a  contract,  the  law  will  give  a  like  option 
to  the  other  party  until  both  are  bound;  then  it 
becomes  a  binding  contract.  Thus,  defendant 
agreed  to  purchase  from  a  manufacturer  all  the 
lumber  of  a  certain  description  that  he  should  man- 
ufacture until  defendant  should  notify  him  to  dis- 
continue the  cutting,  and  the  manufacturer  agreed 
to  sell  such  lumber  at  specified  prices,  and  it  was 

9  Eedwine  v.  Hudman,  104  Tex.  21,  133  S.  W.  426. 

10  Kamsey  v.  Walthan,  1  Mo.  395. 

11  Dittrich  v.  Gobey,  119  Cal.  599,  51  P.  962. 


45  ALTERNATIVE  STIPULATION  §  119 

held  that  either  party  could  terminate  the  agree- 
ment before  any  limiber  of  such  description  had 
been  manufactured  as  until  then  it  was  binding  on 
neither,  but  after  the  manufacture  of  such  lumber 
had  connnenced,  it  was  binding  on  both.^^ 

A  party  to  a  contract  giving  alternative  rights, 
who  exercises  his  right  of  choice  and  makes  an 
election,  is  concluded  thereby  under  a  determina- 
tion by  election  at  law,  though  under  a  determina- 
tion by  election  in  equity  a  mere  acceptance  does 
not  conclusively  evidence  election.  But  where  a 
party  to  an  unambiguous  contract  which  gives  him 
alternative  rights,  elects  one  of  the  rights,  he  can 
not  rescind  his  election  merely  because  he  regrets 
he  did  not  select  the  other,  or  because  he  had  for- 
gotten the  terms  of  the  contract  which  he  did  not 
read,  and  which  he  had  the  opportunity  of  reading, 
at  the  time  of  his  election/^ 

The  doctrine  of  relation  applies  to  alternative 
stipulations  and,  consequently,  the  rights  of  the 
parties  will  attach  as  against  third  parties  with 
notice  and  as  between  themselves  as  of  the  time 
of  making  the  contract/^ 

Sec.  119.  OPTION  TO  MATURE  CHATTEL 
MORTGAGE.— The  right  to  foreclose  a  chattel 
mortgage  does  not  arise  until  the  debt  secured 
thereby  matures,  unless  by  virtue  of  a  special  pro- 
vision in  the  mortgage  giving  the  mortgagee  the 

12  Mclntyre  L.  &  E.  Co.  v.  Jackson  L.  Co.,  165  Ala.  268,  51  So.  767. 

13  Twaits  V.  Penn.  E.  Co.,  77  N.  J.  Eq.  103,  75  Atl.  1010. 

14  Collins  V.  Whigham,  58  Ala.  438. 


§  119  LAW  OF  OPTION  CONTRACTS  46 

option  to  accelerate  the  maturity  of  the  debt  upon 
breach,  by  the  mortgagor,  of  some  stipulation  of  the 
mortgage,  on  his  part,  usually  the  non-payment  of 
interest  or  an  installment  of  the  principal,  and 
sometimes  arbitrarily  when  the  mortgagee  deems 
himself  insecure.^  Upon  such  breach  or  default 
taking  place,  the  common  form  of  chattel  mortgage 
provides  that  the  mortgagee  may  take  immediate 
possession  of  the  property  and  sell  it  either  under 
the  power  of  sale  contained  therein  or  under  fore- 
closure proceedings  by  suit.  We  are  concerned 
here  only  with  the  option  feature  of  the  mortgage. 

A  clause  providing  for  accelerating  the  maturity 
of  a  debt  at  the  option  of  the  mortgagee  in  the 
following  cases  is  held  by  the  courts  to  be  valid :  in 
case  an  execution  is  levied  on  the  property  by  a 
third  person;^  default  in  payment  of  the  sum 
secured,  or  of  any  installment  thereof,  or  the 
removal  of  the  mortgaged  chattels  without  the  writ- 
ten consent  of  the  mortgagee,  and  providing  that 
the  mortgagee  may  take  possession  in  such  cases 

1  Corrigan  v.  Sammis,  120  N.  Y.  S.  69,  and  Abramson  v.  Potts,  125  N.  Y. 

S.  1012,  cases  where  clause  in  mortgage  payable  in  installments 
giving  the  mortgagee  the  right  to  foreclose  upon  default  in  payment 
of  the  ' '  said  sum, ' '  was  construed  as  not  accelerating  the  maturity 
by  default  in  payment  of  installment  of  the  sum. 
In  Gernert  v.  Lembach,  163  Ala.  413,  50  So.  903,  where  the  mortgage 
secured  several  notes  and  provided  that  if  the  mortgagor  failed  to 
pay  each  of  the  notes  promptly  at  maturity,  the  mortgagee  upon 
default  in  the  payment  of  the  note  first  maturing,  was  authorized  to 
take  possession  and  sell  under  the  power  of  sale  therein,  the  default 
and  election  maturing  all  the  notes;  also  Gavin  v.  Matthews,  152 
N.  C.  195,  67  S.  E.  478. 

2  Gaar  v.  Centralia  First  Nat'l  Bank,  20  HI.  App.  611;   Dice  v.  Irvin, 

110  Ind.  561,  11  N.  E.  488 ;  Wilson  v.  Eoundtree,  72  111.  570 ;  Wells 
T,  Chapman,  59  Iowa  658,  13  N.  W.  841,  attachmecT. 


47  OPTION    TO    MATURE    MORTGAGE   DEBT  §  120 

without  notice;^  in  the  payment  of  an  interest 
installment;'*  when  the  mortgagee  deems  him- 
self insecure;^  default  in  pajTnent  of  taxes  or 
assessments.^ 

The  privilege  of  accelerating  the  maturity  of  the 
debt,  however,  is  one  for  the  sole  benefit  of  the 
mortgagee  and,  consequently,  the  mortgagor  can 
not,  by  his  default,  force  the  mortgagee  to  exercise 
the  right,  or  otherwise  work  maturity  of  the  debt/ 
The  privilege  being  one  for  the  sole  benefit  of  the 
mortgagee,  the  maturity  of  the  debt  is  not  accel- 
erated unless  he  exercises  the  privilege  in  due  time 
and  if  he  fails  to  do  so,  he  waives  the  right  as  to 
the  particular  default. 

Sec.  120.  OPTION  TO  MATURE  DEBT  SE- 
CURED BY  REAL  ESTATE  MORTGAGE.— A 

debt  to  secure  the  payment  for  which  a  mortgage  is 

8  Baumann  t.  Cornez,  8  N.  Y.  S.  480 ;  Fulgham  v.  Morris,  75  Ala.  245, 
installment;  Maddox  v.  Wjman,  92  Cal.  674,  28  P.  838,  installment; 
Chapin  v.  Whitsett,  3  Colo.  315,  one  of  several  notes;  Brink  v. 
Freoff,  40  Mich.  610;  installment;  Clark  v.  Baker,  6  Mont.  153,  9 
P.  911;  Eichardson  v.  Coffman,  87  Iowa  121,  54  N.  W.  356,  renewal. 

4  Goad  V.  Home  Cattle  Co.,  32  Neb.  761,  49  N.  W.  757,  23  A.  S.  R.  465. 

5  Woods  V.  Gaar  S.  &  Co.,  93  Mich.  143,  53  N.  W.  14;  Cole  v.  Shaw,  103 

Mich.  505,  61  N.  W.  869;  Evans  v.  Graham,  50  Wis.  450,  7  N.  W. 
380;  Robinson  v.  Gray,  90  Iowa  699,  57  N.  W.  614;  Newlean  v. 
Olson,  22  Neb.  717,  36  N.  W.  155,  3  A.  S.  R.  286 ;  Rich  v.  Milk,  20 
Barb,  (N.  Y.)  616;  Humpfner  v.  D.  M.  Osborne  &  Co.,  2  S.  D.  310, 
50  N.  W.  88,  holding  power  not  absolute  and  arbitrary;  also  Nash  v. 
Larson,  80  Minn.  458,  83  N.  W.  451,  81  A.  S.  R.  272;  Wertz  v.  Ber- 
nard, 32  Okl.  426,  122  P.  649. 
See,  however,  to  the  contrary,  Huebner  v.  Koebke,  42  Wis.  319. 

6  Jones  v.  Norton,  136  Ga.  835,  72  S.  E.  337. 

T  Kelly  V.  Bogardus,  51  Mich.  522,  16  N.  W.  885. 

Central  Fruit  Co.  v.  Worcester  Cycle  Mfg.  Co.,  110  Fed.  491,  creditor 
of  mortgagor  can  not  interpose  defense  that  suit  was  brought  to 
foreclose  prematurely. 


§  120  LAW  OP  OPTION  CONTRACTS  48 

given,  is  now  quite  uniformly  evidenced  by  the  note 
of  the  mortgagor.  The  mortgage  being  a  security 
for  payment  of  the  debt,  the  maturity  of  the  debt 
fixes  the  time  when  the  mortgagee  is  entitled  to 
foreclose  his  mortgage  in  the  event  default  in  pay- 
ment is  made.  In  the  absence  of  an  ''interest'^ 
clause,  or  some  similar  clause,^  maturing  the  debt, 
it  does  not  mature  prior  to  the  time  fixed,  by  reason 
of  default  in  the  payment  of  an  interest  installment 
maturing  prior  to  that  time.^  A  custom,  however, 
has  grown  up  of  inserting,  either  in  the  note  or  in 
the  mortgage,  or  in  both,  a  provision  to  the  effect 
that  if  default  shall  be  made  in  payment  of  any 
interest  installment  maturing  during  the  term  of 
the  mortgage,  the  mortgagee  shall  have  the  right, 
at  his  election,  to  declare  the  principal  sum  inune- 
diately  due  and  payable. 

Such  a  clause  has  been  sustained  as  valid  and 
legal  as  against  the  objection  that  it  creates  a  pen- 
alty, or  forfeiture,  the  courts  placing  their  decis- 
ions upon  the  ground  that  the  effect  of  such  clause 
is  merely  to  allow  the  mortgagee  the  privilege, 

1  As  to  tax  clauses  see  Brockway  v.  McClun,  148  Jl\.  App.  465,  aflfd. 

90  N.  E.  374,  trust  deed;  Pearmain  v.  Mass.  H.  L,  Ins.  Co.,  206  Mass. 
377,  92  N.  E.  497. 
In  French  v.  Poole,  83  Kan.  281,  111  P.  488,  mortgage  construed  as 
requiring    default    in   both    tax   and    interest   clauses   in    order    to 
mature  debt. 

2  Kirk  V.  Van  Petten,  38  Fla.  335,  21  So.  286;   Hinton  v.  Jones,  136 

N.  C.  53,  48  S.  E.  546 ;  Rowe  v.  Griffiths,  57  Neb.  488,  78  N.  W.  20 ; 
Sweeney  v.  Kaufman,  168  HI.  233,  48  N.  E.  144. 

When  the  interest  clause  is  in  the  trust  deed  and  not  in  the  note 
secured  thereby,  the  note  is  not  affected  as  to  date  of  maturity  by 
the  terms  of  the  trust  deed,  except  for  the  purpose  of  enforcing  the 
security.  Board  of  Trustees  v.  Piersol,  161  Mo.  270,  61  S.  W.  811, 
trust  deed. 

See,  however.  Castor  v.  Muramoto,  69  Wash.  145,  125  P.  153. 


49  OPTION   TO   MATURE    MORTGAGE   DEBT  §  120 

at  his  election,  of  accelerating  the  maturity  of 
the  debt.^  The  debt,  however,  is  not  ipso  facto 
matured  upon  default  in  payment  of  interest.  The 
clause  becomes  effective  only  in  the  event  the  mort- 
gagee exercises  the  privilege/  In  other  words,  if 
the  mortgagee  fails  to  exercise  the  privilege  within 
a  reasonable  time  after  the  due  date  of  a  particular 
unpaid  interest  installment,  he  is  said  to  have  lost 
his  right  to  declare  the  mortgage  debt  due  because 
of  that  particular  default. 

An  election  under  such  a  clause  starts  the  statute 
of  limitations  running ;  otherwise,  notwithstanding 
a  default  in  the  payment  of  interest,  the  statute 
does  not  begin  to  run  until  the  expiration  of  the 
period  fixed  by  the  mortgage  for  the  payment  of 
the  mortgage  debt,^  and  this  rule  applies  where 

3  Curran  v.  Houston,  201  El.  442,  66  N.  E.  228 ;   Connecticut  Mut.  L. 

Ins.  Co.  V.  Westerhoff,  58  Neb.  379,  78  N.  W.  724,  79  N.  W.  731,  76 
A.  S.  E.  101 ;  First  National  Bank  v.  Peck,  8  Kan.  660 ;  Sweariiiger 
V.  Lahner,  93  Iowa  147,  61  N.  W.  341,  26  L.  R.  A.  765,  57  A.  S.  R. 
261;  Hawkinson  v.  Banaghan,  203  Mass.  591,  89  N.  E.  1054;  Taber  v. 
Cincinnati  L.  &  C.  Bj.  Co.,  15  Ind.  459;  Gore  v.  Davis,  124  N.  C. 
234,  32  S.  E.  554;  Warren  v.  Harrold,  92  Tex.  417,  49  S.  W.  364, 
trust  deed;  Hoekett  v.  Burns,  90  Neb.  1,  132  N.  W.  718,  not  against 
public  policy;  Bizzel  v.  Roberts,  156  N.  C.  272,  72  S.  E.  378. 
In  some  states  there  is  a  statute  maturing  the  debt  for  default  in 
interest  payment.  Perry  v.  Fisher,  30  Ind.  App.  261,  65  N.  E.  935; 
see  Bank  v.  Doherty,  29  Wash.  233,  69  P.  732,  92  A.  S.  E.  903. 

4  McCarthy  v.  Benedict,  89  Neb.  293,  131  N.  W.  598. 

5  Richards  v.  Daley,  116  Cal.  336,  48  P.  220;  Watts  v.  Hoffman,  77  111. 

App.  411;  Keene  etc.  Bank  v.  Eeid,  123  Fed.  221,  59  C.  C.  A.  225; 
Sherwood  v.  Wilkins,  65  Ark.  312,  45  S.  W.  988;  First  National  Bank 
V.  Park,  37  Colo.  303,  86  P.  106;  Insurance  Co.  of  North  America 
V.  Martin,  151  Ind,  209,  51  N.  E.  361;  Kennedy  v.  Gibson,  68  Kan. 
612,  75  P.  1044;  Watts  v.  Creighton,  85  Iowa  154,  52  N.  W.  12; 
Weinberg  v.  Naher,  51  Wash.  591,  99  P.  736;  Moline  Plow  Co.  v. 
Webb,  141  U.  S.  616,  35  L.  ed.  879,  12  S.  Ct.  100;  Fletcher  v.  Daugh- 
erty,  13  Neb.  224,  13  N.  W.  207. 
4 — Option  Contracts. 


§  121  LAW  OF  OPTION  CONTRACTS  50 

there  is  an  election  and  the  default  is  waived,  or 
cured,  by  subsequent  payment.® 

An  interest  clause  does  not  affect  the  negotiabil- 
ity of  the  mortgage  note,'^  unless  it  is  exercised,* 
but  the  note  is  rendered  non-negotiable  when  the 
payee  is  given  the  right  to  declare  the  money  due 
whenever  he  deems  himself  insecure,^  or  for  default 
in  payment  of  taxes. ^ 


10 


Sec.  121.  SAME.  EXERCISE  OF  OPTION. 
WAIVER. — This  option  to  be  effective  must  be 
exercised  by  the  mortgagee  and  within  a  reasonable 
time  after  default,  or  the  right  to  declare  the  mort- 
gage debt  due  is  waived.^  What  is  a  reasonable  time 
seems  to  be  relative  to  the  facts  and  circumstances.^ 
In  particular  cases  of  great  hardship  to  the  mort- 

6  Gal.  Sav.  &  L.  Co.  v.  Culver,  127  Cal.  107,  59  P.  292,  case  where  suit 

to  foreclose  was  filed  and  then  dismissed. 

7  Hunter  v.  Clarke,  184  HI.  158,  56  N.  E.  297,  75  A.  S.  E.  160 ;  Mackin- 

tosh V.  Gibbs,  81  N.  J.  L.  577,  80  Atl.  554;  Schmidt  v.  Pegg,  172 
Mich.  159,  137  N.  W.  524;  Contra,  Bell  v.  Riggs,  34  Okl.  834,  127  P. 
427,  41  L.  R.  A.  (N.  S.)  111. 

8  Stark  V.  Olsen,  44  Neb.  646,  63  N.  W.  37 ;  Merrill  v.  Hurley,  6  S.  D. 

592,  62  N.  W.  958 ;  Mackintosh  v.  Gibbs,  81  N.  J.  L.  577,  80  Atl.  554. 

0  First  National  Bank  v.  Bynum,  84  N.  C.  24,  37  Am.  Rep.  604;  Carroll 
Co  Sav.  Bk.  V.  Strother,  28  S.  C.  504,  6  S.  E.  313;  Morgan  v. 
Edwards,  53  Wis.  599,  11  N.  W.  21,  40  Am.  Rep.  781. 

10  Bright  V.  Offield,  81  Wash.  442,  143  P.  159. 

ijulien  V.  Model  Bldg.  L.  &  Inv.  Co.,  116  Wis.  79,  92  N.  W.  561,  61 
L.  R.  A.  668,  case  where  it  was  held  mortgagee  waived  notice  by 
changing  his  place  of  residence,  etc.,  without  giving  mortgagor  notice 
of  change  of  residence  or  P.  O.  address. 

2  Washburn  v.  Williams,  10  Colo.  App.  153,  50  P.  223;  Famsworth  v. 
Hoover,  66  Ark.  367,  50  S.  W.  865;  Swearingen  v.  Lahner,  93  Iowa 
147,  61  N.  W.  431,  57  A.  S.  R.  261,  26  L.  R.  A.  765. 


51  OPTION  TO   MATURE   MORTGAGE    DEBT  §  121 

gagor,  the  court  sometimes  relieves  him  from  the 
default.^ 

It  is  held  that  the  bringing  of  a  suit  to  foreclose 
the  mortgage,*  or  the  advertisement  of  the  property 
under  power  of  sale,^  is  sufficient  notice  of  election 
to  treat  the  v^^hole  mortgage  debt  due,  and  that, 
therefore,  previous  notice  is  not  necessary,  unless, 
of  course,  the  mortgage  provides  for  a  particular 
notice,  or  a  specified  time  for  making  the  election.® 

The  privilege  is  one  for  the  sole  benefit  of  the 
mortgagee  and  since  the  exercise  of  the  right  to 
accelerate  the  maturity  of  the  debt  is  optional  with 
him,  the  maturity  is  not  accelerated  unless  he  elects 
to  do  so."^  Where,  therefore,  he  does  not  elect,  the 
debt  does  not  mature  until  the  period  fixed  by  the 

3  Provident  Sav.  Life  Assur.  Soc.  v.  Georgia  Industrial  Co.,  124  Ga.  399, 

52  S.  E.  289;  Condon  v.  Maynard,  71  Md.  601,  18  Atl.  957;  SerreU  v, 
Eothstein,  49  N.  J.  Eq.  385,  24  Atl.  369. 

4  Bank  of  Commerce  v.  Scofield,  126  Cal.  156,  58  P.  451;   Sweeney  v. 

Kaufman,  168  ni.  233,  48  N.  E.  144;  National  Life  Ins.  Co.  v. 
Butler,  61  Neb.  449,  85  N.  W.  437,  87  A.  S.  E.  462;  I^ilpatrick  v. 
Germania  Life  Ins.  Co.,  183  N.  Y.  163,  75  N.  E.  1124,  2  L.  R.  A. 
(N.  S.)  574,  111  A.  S.  R.  722;  Mullen  v.  Gooding  I.  &  H.  Co.,  20 
Idaho  348,  118  P.  666. 

5  Lee  V.  Security  Bk.  &  Tr.  Co.,  124  Tenn.  582,  139  S.  W.  690,  trust  deed. 

6  Chicago  etc.  R.  Co.  v.  Fosdick,  106  U.  S.  47,  21  L.  Ed.  47,  1  S.  Ct.  10; 
Lauterjung  v.  Chicago  T.  &  T.  Co.,  156  HI.  App.  621;  Potomac  Mfg. 
Co.  V.  Evans,  84  Va.  717,  6  S.  E.  2;  Doolittle  v.  Nurnberg,  27  N.  D, 
521,  147  N.  W.  400. 

7  Lowenstein  v.  Phelan,  17  Neb.  429,  22  N.  W.  561. 
Gunby  v.  Ingram,  57  Wash.  97,  106  P.  495,  tender  before  election. 
Citing  Coman  v.  Peters,  52  Wash.  574,  100  P.  1002,  as  deciding  that 
whether  there  be  words  of  option  or  not,  the  maturity  of  the  debt 
is  not  hastened  without  an  election,  the  clause  not  being  self- 
executing. 


§  122  LAW  OP  OPTION  CONTRACTS  52 

mortgage.  The  privilege  being  optional,  It  is  held 
the  mortgage  may  waive  the  default  or  breach,  and 
also  an  election  made,  and  that  he  does  so  when  he 
receives  payment  from  the  mortgagor  of  a  past  due 
interest  installment;^  and  it  is  also  held  that  a 
default  is  cured  and  the  right  of  election  is  barred 
where,  before  election,  the  mortgagor  tenders  the 
amount  due.^  Waiver  of  a  prior  default  does  not 
affect  the  right  of  the  mortgagee  to  exercise  the 
option  privilege  as  to  a  subsequent  default  when  the 
mortgage  provides  that  he  may  declare  the  whole 
amount  due  and  foreclose  "at  any  default."^" 

Sec.  122.  INTERPRETATION.  RULES  OF 
CONSTRUCTION.— The  purpose  is  to  give  some 
of  the  more  important  of  the  general  rules  and 
to  illustrate  them,  as  far  as  possible,  by  decisions 
involving  option  contracts. 

SBelloe  V.  Davis,  38  Gal.  242;  Mason  v.  Luce,  116  Cal.  232,  48  P.  72; 
Crossmore  v.  Page,  73  Cal.  213,  14  P.  787;  Fletcher  v.  Dennison,  101 
Cal.  292,  35  P.  868;  KinseU  v.  Ballou,  151  Cal.  754,  91  P.  620; 
Hecker  v.  Boylan,  126  Iowa  162,  101  N.  W.  755,  note;  Farmers  &  M. 
Bk.  V.  Daiker,  153  Iowa  484,  133  N.  W.  705. 
The  holder  of  a  mortgage  security  may  rescind  an  election  to  declare 
the  principal  sum  due  and  dismiss  a  bill  for  foreclosure,  even  as  to 
a  surety,  when  the  mortgage  specifically  provides  for  rescission, 
Philadelphia  Sav.  Fund  Soc.  v.  Lasher,  144  HI.  App.  653. 

»  Clark  V.  Paddock,  24  Idaho  142,  132  P.  795,  46  L.  E.  A.  (N.  S.)  475; 
Stalder  v.  Eiverside  G.  &  W.  Co.,  167  Cal.  560 ;  140  P.  252,  holding 
maker  may  tender  before  receipt  of  notice  of  exercise  of  option; 
Weinberg  v.  Naher,  51  Wash.  591,  99  P.  736;  see  Matzger  v.  Page, 
62  Wash.  170,  113  P.  254. 

10  Bower  v.  Stein,  177  Fed.  673,  101  C.  C.  A.  299;  Industrial  L.  Dev.  Co. 
V.  Post,  55  N.  J.  Eq.  559,  37  Atl.  892. 


53  RULES  OP  CONSTRUCTION  §  122 

The  cardinal  rules  of  construction  are : 

(a)  The  contract  must  be  so  construed  as  to  give 
effect  to  the  common  intention  of  the  parties.* 

(b)  The  intention  of  the  parties  is  to  be  gath- 
ered from  the  whole  contract.^ 

(c)  And  the  clear  and  unambiguous  terms  of 
the  contract  govern  the  court  in  ascertaining  the 
intention." 

1  Jorgensen  v.  Tuolumne  County,  205  Fed.  612,  123  C.  C.  A,  628 ;  Cum- 

mings  V.  Nielson,  42  Utah  157,  129  P.  619;  Brovm  v.  Beckwith,  60 
Fla.  310,  53  So.  542;  Dwight  v.  Germania  L.  Ins.  Co.,  103  N.  Y. 
341,  8  N.  E.  654,  27  Am.  Rep.  729;  Newbern  Banking  Co.  v.  Duffy, 
153  N.  C.  62,  68  S.  E.  915;  Radell  v.  Sharlan,  66  Wis.  138,  28  N.  W. 
136;  Wallis  v.  First  Nat'l  Bank,  155  Wis.  306,  143  N.  W.  670;  Tilton 
V.  Sterling  Coal  etc.  Co.,  28  Utah  173,  77  P.  758,  107  A.  S.  R.  689, 
regardless  of  literal  interpretation;  Pratt  v.  Prouty,  104  Iowa  419,  73 
N.  W.  1035,  65  A,  S.  R.  472;  Ross  v.  Savage,  66  Fla.  106,  63  So.  148. 

2  Caine  v.  Hagenbarth,  37  Utah  69,  106  P.  945 ;  Carnegie  Natural  Gas 

Co.  V.  Oil  Company,  56  W.  Va.  402,  49  S.  E.  548 ;  Taylor  v.  Buffalo 
Collieries  Co.,  72  W.  Va.  353,  79  S.  E.  27;  Pittsburg  Steel  Co.  v. 
Wood,  109  Ark.  537,  160  S.  W.  519;  McGraw  v.  Hanway,  120  Md. 
197,  87  Ark.  666;  Hathaway  v.  Stone,  215  Mass.  212,  102  N.  E.  461  j 
Lindley  v.  Groff,  37  Minn.  338,  34  N.  W.  26. 

Barnes  v.  Rea,  219  Pa.  279,  68  Atl.  836,  holding  that  whether  a  par- 
ticular instrument  should  be  construed  as  an  absolute  conveyance,  or 
as  an  agreement  to  sell,  or  as  an  option  to  purchase,  does  not,  as  a 
rule,  depend  upon  any  particular  words  or  phrases  but  upon  the 
intention  of  the  parties  derived  from  the  instrument  itself  by  a 
consideration  of  all  its  parts,  and  where  that  is  doubtful,  from  the 
attending  circumstances.  See,  also,  Aiple  etc.  Co.  v.  Spelbrink,  211 
Mo.  671,  111  S.  W.  480,  14  Ann.  Cas.  652. 

8  See  Miller  v.  St.  Paul  F.  &  M.  Ins.  Co.,  26  S.  D.  454,  128  N.  W.  609; 
Lee  V.  Cochran,  157  Ala.  311,  47  So.  581. 

Baraboo  Land  etc.  Co.  v.  Winter,  130  Wis.  457,  110  N.  W.  413,  fact 
that  plaintiff  was  not  the  owner,  that  possession  was  not  delivered 
and  that  there  was  an  "enormous"  price,  are  by  themselves 
immaterial. 


§  122  LAW  OF  OPTION  CONTRACTS  54 

In  applying  these  rules  the  courts  have  laid  down 
the  following  subsidiary  rules: 

(d)  Several  contracts  relating  to  the  same 
subject  matter,  made  between  the  parties,  and 
involving  the  same  transaction,  will  be  considered 
together.* 

(e)  The  words  of  the  contract  are  to  be  given 
their  ordinary  and  popular  meaning  except  when 

3  Written  lease  deemed  to  embody  whole  agreement  in  absence  of  fraud 

or  mistake,  Abbott  v.  76  Land  Co.,  101  Cal.  567,  36  P.  1,  53  P.  445, 
option  in  lease  not  implied. 
Oral  negotiations  merged  in  option  which  is  regarded  as  the  exclusive 
medium  of  ascertaining  the  agreement  of  the  parties,  Fox  v.  Da- 
nargo  L.  Co.,  37  Colo.  203,  86  P.  433;  Carson  v.  Bedding,  52  Colo. 
178,  120  P.  147. 

4  Prior  option  may  be  referred  to  to  determine  intention  of  parties  to 

lease  when  language  ambiguous,  Chicago  Auditorium  Ass'n  v.  Corp. 

Fine  Arts  Bldg.,  244  Bl.  532,  91  N.  E.  665,  aflfd.  150  lU.  App.  262. 
Burt  V.  Stringfellow,   (Utah)    143  P.  234,  first  option  and  extension; 

Standiford  v.  Kloman,  234  Pa.  443,  83  Atl.  311,  option  and  extension; 

Lechner  v.   Strauss,  50  Ind.   App.   414,   98   N.   E.   444,  option   and 

extension. 
Option  and   lease  construed  as  one  transaction.  Pollard  v.  Sayre,  45 

Colo.  195,  98  P.  816;  Snider  v.  Yarbrough,  43  Mont.  203,  115  P.  411; 

see  Conway  v.  Hart,  129  Cal.  480,  62  P.  44. 
Terms  of  option  to  be  determined  from  correspondence  and  not  from 

formal  contract  executed  by  bank  depositary  without  authority,  Tyng 

V.  Constant  Elec.  Co.,  37  Utah  304,  108  P.  1109. 
Deed  and  option  agreement  construed  as  one  contract,  Myers  v.  Metzger, 

61  N.  J.  Eq.  522,  48  Atl.  1113. 
Option  and  lease  not  same  transaction,  Broadway  Hospital  and  Sani- 
tarium V.  Decker,  47  Utah  586,  92  P.  445. 
Agency  to  sell  and  option  to  purchase,  Sixta  v.  Land  Co.,  157  Wis.  293, 

147  N.  W.  1042. 
Parol  evidence  is  not  admissible  to  connect  one  writing  with  another, 

as  constituting  one  transaction;  the  connection  must  appear  from  the 

face  of  the  papers,  Broadway  Hospital  and  Sanitarium  v.  Decker, 

Bupra;  Tipping  v.  Phillips,  123  Ga.  415,  51  S.  E.  410. 


55  RULES  OF   CONSTRUCTION  §  122 

used  ii!  a  technical  sense^  and  except,  also,  when,  by 
usage,  they  have  acquired  a  special  meaning.^ 

(f )  When  the  contract  is  susceptible  of  two  con- 
structions that  one  will  be  adopted  which  will  ren- 
der the  contract  valid/ 

(g)  The  contract  will,  if  possible,  be  construed 
so  as  to  make  it  reasonable,  equitable,  and  opera- 
tive rather  than  unreasonable,  inequitable,  or  not 
operative.^ 

5  See  Boss  v.  Savage,  66  Fla.  106,  63  So.  148 ;  Thompson  v.  Craft,  238 
Pa.  125,  85  Atl.  1107. 

Words  must  be  given  their  ordinary  meaning;  absurdity  avoided  if 
possible,  Cumniings  v.  Nielson,  42  Utah  157,  129  P.  619;  E.  H. 
Stanton  Co.  v.  Eochester  etc.  Agency,  206  Fed.  978;  Carnegie  N. 
Gas  Co.  V.  Oil  Co.,  56  W.  Va.  402,  49  S.  E.  548;  Scudder  v.  Perce, 
159  Cal.  429,  114  P.  571. 

The  use  of  the  word  "option"   upon   particular  facts,   excludes   the 

idea  of  an  absolute  agreement  of  purchase,  Gard  v.  Thompson,  21 

Idaho  485,  123  P.  497;  "sell"  construed  as  meaning  "offer  to  sell"; 

Luke  V.  Livingston,  9  Ga.  App.  116,  70  S.  E.  596. 
"Refusal"  construed  to  mean  option,  Wellmaker  v.  Wheatley,  123  Ga. 

201,  51  S.  E.  436;  Callahan  v.  Michael,  45  Ind.  App.  215,  90  N.  E. 

642;  Potts  V.  Whitehead,  21  N.  J.  Eq.  55,  affd.  23  N.  J.  Eq.  512. 
Reference  ip  pleading  to  instrument  as  "option"  does  not  make  it 

such  when  it  lacks  the  essentials  of  an  option,  Comstoek  Bros.  v. 

North,  88  Miss.  754,  41  So.  374. 

6Findley's  Exrs.  v.  Findley,  11  Grat.  (Va.)  434;  Wayne  v.  The  General 
Pike,  16  Ohio  421. 

7  Hammond  v.  Haskell,  14  Cal.  App.  522,  112  P.  575;  Saunders  v.  Clark, 

29  Cal.  299;  Rapp  v.  Linebarger  &  Son,  149  Iowa  429,  128  N.  W. 
555;  Rice  v.  Lincoln  &  N.  W.  R.  Co.,  88  Neb.  307,  129  N.  W.  425, 
involving  perpetuity;  Lewis  v.  Tipton,  10  Ohio  St.  88,  75  Am.  Dec. 
498;  Lippert  v.  Garrick  Theatre  Co.,  144  Wis.  413,  129  N.  W.  409. 

8  Stein  V.  Archibald,  151  Cal.  220,  90  P.  536. 

Instrument  construed  as  a  lease  and  option  in  order  to  protect  the 
rights  of  the  parties,  Gilbert  v.  Port,  28  Ohio  St.  276;  to  make  it 
operative,  Abel  v.  Gill,  95  Neb.  279,  145  N.  W.  637;  construed  to 
make  it  equitable  rather  than  unreasonable,  where  ambiguous,  Caine 
v.  Hagenbarth,  37  Utah  69,  106  P.  945;  McMillan  v.  Phila.  Co.,  159 
Pa.  142,  28  Atl.  220. 


§  122  LAW  OP  OPTION  CONTRACTS  56 

(h)  In  case  of  doubt  the  court  will,  in  proper 
cases,  follow  the  construction  placed  upon  the  con- 
tract by  the  parties^  and  likewise,  in  case  of  doubt, 
the  court  will  construe  the  words  of  the  contract 
most  strongly  against  the  party  who  used  them  in 
the  preparation  of  the  contract/" 

8  Where  option  is  plain  and  unambiguous,  it  can  not  be  construed  to 
relieve  party  from  consequences  claimed  by  him  hard  and  unfair, 
Lee  V.  Cochran,  157  Ala.  311,  47  So.  581;  however,  if  option  is  not 
plain  and  unambiguous,  if  two  constructions,  that  will  be  adopted 
which  is  fair  and  reasonable  rather  than  one  which  results  in  injus- 
tice, Lechner  v.  Strauss,  50  Ind.  App,  414,  98  N.  E.  444;  Paine  v. 
Copper  etc.  Co.,  13  Ariz.  406,  114  P.  964;  Eedwine  v.  Hudman,  104 
Tex.  21,  133  S.  W.  426;  Berry  v.  Frisbie,  120  Ky.  337,  86  S.  W.  558, 
27  Ky.  L.  Rep.  724;  Christian  Feigenspan  v.  Popowska,  75  N.  J.  Eq. 
342,  72  Atl.  1003. 

9  Tilton  V.  Sterling  C.  &  C.  Co.,  28  Utah  173,  77  P.  758,  107  A.  S.  R.  689; 
Pittsburg  V.  P.  &  B.  Brick  Co.  v.  Bailey,  76  Kan.  42,  90  P.  803; 
Abel  V.  GUI,  95  Neb.  279,  145  N.  W.  637;  Pratt  v.  Prouty,  104  Iowa 
419,  73  N.  W.  1035,  65  A.  S.  R  472;  Stone  v.  Powell,  (Iowa)  150 
N.  W.  15 ;  Shaw  v.  Caldwell,  16  Cal.  App.  1,  115  P.  941. 
Construed  as  an  agreement  (lease)  when  so  treated  by  the  parties, 
Benedict  v.  Pincus,  191  N.  Y.  377,  84  N.  E.  284;  see  O'Connor  y. 
Harrison,  132  HI.  App.  264;  Standiford  v.  Thompson,  135  Fed. 
991,  68  C.  C.  A.  425,  option;  Berry  v.  Frisbie,  120  Ky.  337,  86  S.  W. 
558,  27  Ky.  L.  Rep.  724. 
Evidence  not  admissible  to  show  construction  by  parties  when  intention 
can  readily  be  ascertained  from  written  option,  Lawrence  v.  Peder- 
son,  34  Wash.  1,  74  P.  1011;  see  Pittsburg  V.  P.  &  B.  Brick  Co.  v. 
Bailey,  supra. 

10  Hardy  v.  Ward,  150  N.  C.  385,  64  S.  E.  171,  printed  form;  Lechner  v. 
Strauss,  50  Ind.  App.  414,  98  N.  E.  444;  Wier  v.  Am.  Locomotive 
Co.,  215  Mass.  303,  102  N.  E.  481;  Brown  v.  Beckwith,  60  Fla.  310, 
53  So.  542;  Moorefield  v.  Fidelity  Mut.  Life  Ins.  Co.,  135  Ga.  186, 
69  S.  E.  119;  L'Engle  v.  Overstreet,  61  Fla.  653,  55  So.  381;  Paine 
V.  Copper  etc.  Co.,  13  Ariz.  406,  114  P.  964. 
Rule  does  not  apply  to  grant  of  franchise  by  city  for  waterworks  by 
ordinance  reserving  option  to  city  to  purchase,  Valparaiso  City  W. 
Co.  v.  Valparaiso,  33  Ind.  App.  193,  69  N.  E.  1018. 


57  RULES   OF   EVIDENCE  §  123 

(i)  Where  there  is  a  conflict  between  the  printed 
and  the  written  matter  of  the  contract,  the  latter 
controls.** 

( j )  The  meaning  of  general  words  and  the  scope 
of  general  clauses  will  be  restricted  by  the  more 
specific.*^ 

(k)  The  contract  is  to  be  interpreted  according 
to  the  law  and  usage  of  the  place  where  it  is  to  be 
performed,  if  indicated,  otherwise  according  to  the 
law  of  the  place  where  it  was  made.** 

Sec.  123.  INTERPRETATION.  RULES  OF 
EVIDENCE.— Proof  of  the  contract  itself  neces- 
sarily precedes  its  interpretation  by  the  court. 
Such  proof  ha^dng  been  made  and  its  validity 
established,  there  is  no  room  for  interpretation,  or 
construction,  if  the  language  of  the  contract  is 

11  Hardy  v.  Ward,  150  N.  C.  385,  64  S.  E.  171. 

Seaver  v.  Thompson,  189  111.  158,  59  N.  E.  553,  option  in  lease,  but  of 
course  this  rule  is  subordinate  to  the  controlling  rule  that  the  inten- 
tion of  the  parties  must  prevail,  John  v.  ELkins,  63  W.  Va.  158,  59 
S.  E.  961. 

12  Taylor  v.  Buffalo  Collieries  Co.,  72  W.  Va,  353,  79  S.  E.  27;  Scudder 

V.  Perce,  159  Cal.  429,  114  P.  571. 

13  An  option  to  purchase  land  in  Louisiana  and  performed  in  that  state, 

is  governed  by  the  laws  of  Louisiana,  Kirby  etc.  Co.  v.  Burnett,  144 
Fed.  635,  75  C.  C.  A.  437;  Horrltz  v.  Fredson,  178  DI.  App.  303, 
where  made. 

Construction  of  agreement  containing  penalties  or  forfeiture  clauses: 

See  Sec.  109. 
As  being  offer  or  option,  Sees.  -103-107. 
As  being  option  or  sale.  Sees.  108-110. 
As  being  sale  or  return,  Sees.  111-112. 
As  being  lease  or  option.  Sec.  113. 
As  being  agency  or  option.  Sec.  114. 
As  being  deed,  etc.,  or  option.  Sec.  115. 


§  123  LAW  OP  OPTION  CONTRACTS  58 

plain  and  unambiguous,  for  the  general  rule  is  that 
parol  evidence  is  not  admissible  to  contradict,  vary, 
add  to,  or  subtract  from,  the  terms  of  such  a  writ- 
ten contract/  There  are,  however,  what  are  called 
exceptions  to  the  rule,  the  more  important  of  which 
allow  the  introduction  of  parol  evidence  as  follows : 

(a)  To  show  the  invalidity  of  the  contract,^  or  a 
contingency  or  condition  affecting  its  creation, 
operation  or  effect.^ 

1  Where   not   ambiguous   parol   evidence   not  admissible,   Chicago   Aud. 

Ass'n  V.  Corp.  Fine  Arts  Bldg.,  244  ni.  532,  91  N.  E.  665;  Pollard 
V.  Sayre,  45  Colo.  195,  98  P.  816;  Eichardson  v.  Hardwick,  106  U.  S. 
252,  27  L.  Ed.  145,  1  S.  Ct.  213,  payment;  Newell  v.  Lamping,  45 
Wash.  304,  88  P.  195;  Pratt  v.  Prouty,  104  Iowa  419,  73  N.  W. 
1035,  65  A.  S.  K.  472 ;  Broadway  H.  &  8.  v.  Decker,  47  Wash.  586, 
92  P.  445,  statute  of  frauds. 

In  the  absence  of  fraud,  mistake  or  ambiguity,  parol  eyidenee  is  not 
admissible  to  vary  the  terms  of  a  written  contract,  Haskins  v.  Dem, 
19  Utah  89,  56  P.  953;  Kelly  v.  Chicago  etc.  Ey.  Co.,  93  Iowa  436, 
61  N.  W.  957. 

This  rule  applies  to  legal  effect  of  the  contract,  as  where  time  of  elec- 
tion, payment  or  performance  is  not  expressly  fixed,  parol  evidence 
is  not  admissible  to  show  an  agreement  for  a  particular  time,  Stone 
V.  Harmon,  31  Minn.  512,  19  N.  W.  88;  Willard  v.  Tayloe,  8  Wall 
(U.  S.)  557,  19  L.  Ed.  501;  Standard  Box  Co.  v.  Mut.  Biscuit  Co., 
10  Cal.  App.  746,  103  P.  938;  Hawkins  v.  Studdard,  132  Ga.  265, 
63  S.  E.  852. 

Eule  does  not  apply  to  third  parties,  Shields  Bros.,  In  re,  134  Iowa  559, 
111  N.  W.  963,  10  L.  E.  A.  (N.  S.)  1061,  or  to  consideration  for 
option;  Horn  v.  Hansen,  56  Minn.  43,  57  N.  W.  315,  22  L.  E.  A.  617. 

All  antecedent  and  contemporaneous  oral  agreements  are  merged  in  the 
written  contract,  Kelly  v.  Chicago  etc.  Ey.  Co.,  93  Iowa  436,  61 
N.  W.  957. 

2  Barrett  v.  Davis,  104  Mo.  549,  16  S.  W.  377;   Curry  v.  Colburn,  99 

Wis.  319,  74  N.  W.  778,  non-delivery. 

3  Lyons  v.  Stills,  97  Tenn.  514,  37  S.  W.  280,  to  show  option  to  rescind 

sale,  in  suit  on  note  for  price. 
Whitaker  v.  Salisbury,  32  Mass.  534,  escrow. 
See  Eaves  v.  Vial,  98  Va.  134,  34  S.  E.  978,  to  hold  grantor  in  deed 

trustee. 


59  RULES  OF  EVIDENCE  §  123 

(b)  To  prove  mistake  or  fraud  as  the  basis  for 
equitable  relief.* 

(c)  To  prove  a  distinct,  valid,  contemporaneous, 
oral  agreement,  not  in  conflict  with  the  provisions 
of  the  written  agreement  in  certain  cases.^ 

3  Stanton  v.  Singleton,   (Cal.)   54  P.  587,  signature  of  another  party. 

But  this  rule  does  not  apply  to  the  enforcement  of  a  forfeiture  clause 
in  the  contract,  Stevinson  v.  Joy,  164  Cal.  279,  128  P.  751,  or  to 
mere  offers,  Weiden  v.  Woodruff,  38  Mich.  130. 

In  the  absence  of  fraud  or  mistake  parol  evidence  is  not  admissible  to 
show  that  notes  containing  an  unconditional  promise  to  pay  the  prin- 
cipal were  executed  under  an  agreement  that  they  were  not  to  be 
binding,  Stewart  v.  Gardner,  152  Ky.  120,  153  S.  W.  3. 

4  Somerville  v.  Coppage,  101  Md.  519,  61  Atl.  318;  Beach  v.  Bellwood, 
104  Va.  170,  51  S.  E.  184;  Kee  v.  Davis,  137  Cal.  456,  70  P.  294, 
671 ;  Bush  v.  Merriman,  87  Mich.  260,  49  N.  W.  567, 

•  Where  option,  is  not  ambiguous  and  contains  nothing  as  to  time  and 
manner  of  payment,  it  will  be  presumed  that  payment  of  price  and 
delivery  of  deed  are  concurrent  acts  and  parol  evidence  is  not  admis- 
sible to  show  an  agreement  for  the  payment  of  earnest  money,  not 
complied  with,  Kibler  v.  Caplis,  140  Mich.  28,  103  N.  W.  531,  112 
Am.  Rep.  388. 

Admissible  to  show  a  parol  agreement  that  neither  one  of  two  options 
should  be  enforced  unless  the  purchaser  should  carry  out  the  other, 
Reynolds  v.  Hooker,  76  Vt.  184,  56  Atl.  988. 

Also  to  determine  whether  payment  of  price  is  a  part  of  the  act  of 
election,  Breen  v.  Mayne,  141  Iowa  399,  118  N.  W.  441. 

Also  that  dividends  on  optioned  stock  were  not  to  pass.  Rivers  v.  Oak 
Lavni  Sugar  Co.,  52  La.  Ann.  762,  27  So.  118. 

But  not  to  show  omission  of  clause  applying  rentals,  Braun  v.  Wiscon- 
sin R.  Co.,  92  Wis.  245,  66  N.  W.  196. 

Not  to  show  a  contemporaneous  oral  agreement  to  take  back  articles 
and  repay  price  sold  by  bill  of  sale,  Tales  v.  McKeon,  2  Hilt. 
(N.  Y.)  53. 

Not  admissible  to  show  option  in  lease  intended  by  the  parties  as  con- 
tract of  sale.  Smith  v.  Caldwell,  78  Ark.  333,  95  S.  W.  467,  or  that 
the  option  was  unconditional,  Devitt  v.  Kaufman  Co.,  27  Tex.  Civ. 
App.  332,  66  S.  W.  224,  or  that  the  option  was  given  for  the  purpose 
of  authorizing  the  optionee  to  sell  the  property  to  a  third  person, 
Watkins  v.  Robertson,  105  Va.  2G9,  54  S.  E.  33,  115  A.  S.  R.  880, 
5  L.  R.  A.  (N.  S.)  1194. 


§  123  LAW  OF  OPTION  CONTRACTS  60 

(d)  To  identify  the  parties  and  the  subject 
matter.® 

(e)  To  introduce  a  custom  or  usage  into  the  con- 
tract where  permissible^  and  to  prove  the  meaning 
of  words  and  phrases  in  proper  cases. ^ 

5  See  Hazeltoi)  v.  LeDuc,   (D,  C.)   19  App.  Cas.  379,  understanding  of 
optionee  as  option. 
Oral  agreement  as  to  securities,  Fletcher  v.  Painter,  81  Kan.  195,  105 
P.  500. 

To  show  transaction  mortgage  of  option,  Connor  t.  Clapp,  37  Wash. 
299,  79  P.  929,  931. 

To  show  what  is  reasonable  time,  Simpson  v.  Sanders,  130  Ga.  265, 
60  S.  E.  541. 

But  not  where  time  is  fixed,  Abell  v.  Munson,  18  Mich.  306,  100  Am. 
Dec.  165. 

6  Parol  evidence  admitted  to  identify  property,  Langert  v.  Ross,  1  Wash. 

250,  24  P.  443 ;  Wellmaker  v.  Wheatley,  123  Ga.  201,  51  S.  E.  436 ; 
Easton  v.  Thatcher,  7  Utah  99,  25  P.  728 ;  Eggleston  v.  Wagner,  46 
Mieh.  610,  10  N,  W.  37;  Gaylord  v.  McCoy,  158  N.  C.  325,  74  S.  E. 
321;  Hayes  v.  O'Brien,  149  El.  403,  37  N.  E.  73,  23  L.  R.  A.  555. 

Joyce  V.  Tomasini,  168  Cal.  234,  142  P.  67,  State  and  County  not  given, 
also  uncertain  as  to  location  of  right  of  way. 

To  identify  adjoining  piece  of  land,  Heyward  v.  Willmarth,  84  N.  Y.  S. 
75,  87  App.  Div.  125;  reference  to  lease  not  permissible,  Broadway 
H.  &  S.  V.  Decker,  47  Wash.  586,  92  P.  445. 

Easton  v.  Thatcher,  7  Utah  99,  25  P.  728,  description;  parol  evidence 
admitted  to  apply  contract  to  subject  matter. 

Barnes  v.  Husted,  219  Pa.  287,  68  Atl.  839,  parol  evidence  not  admis- 
sible to  supply  description;  or  to  connect  letter  containing  descrip- 
tion with  option  contract,  Tippins  v.  Phillips,  123  Ga.  415,  51  S.  E. 
410,  or  to  supply  lot  numbers  in  blank  space  left  unfilled,  (rule  as  to 
patent  ambiguities)  Marske  v.  Willard,  169  El.  276,  48  N.  E.  290. 

As  to  mistake,  reformation,  etc.,  see  Sec.  217;  Butler  v.  Threlkeld,  117 
Iowa  116,  90  N.  W.  584. 

7  Lillard  v.  Kentucky  etc.  Co.,  134  Fed.  168,  67  C.  C.  A.  74;  J.  J.  Moore 

Co.  v.  United  States,  196  U.  S.  157,  49  L.  Ed.  428,  25  S.  Ct.  202. 

8  Nonantum  Worsted  Co.  v.  North  Adams  Mfg.  Co.,  156  Mass.  331,  31 

N.  E.  293 ;  Licking  Rolling  Mills  Co.  v.  W.  P.  Snyder  &  Co.,  28  Ky. 
L.  Rep.  357,  89  S.  W.  249. 


61  RULES  OF  EVIDENCB  §  123 

(f )  Generally  to  show  the  circumstances  attend- 
ing and  surrounding  the  execution  of  the  contract 
including  the  situation  of  the  parties  and  of  the 
subject  matter,  to  place  the  court  in  the  position 
of  the  parties  and  thus  enable  the  court  to  ascer- 
tain the  true  meaning  and  intent  of  the  parties® 
but  not  for  the  purpose  of  varying,  etc.,  the  terms 
of  the  contract.^" 

»  Stein  V.  Archibald,  151  Cal.  220,  90  P.  536;  Simpson  v.  Sanders,  130 
Ga.  265,  60  S.  E.  541,  543;  Curtin  v.  Ingle,  137  Cal.  95,  69  P.  836; 
Hardy  v.  Ward,  150  N.  C.  385,  64  S.  E.  171. 

Extrinsic  evidence  of  surrounding  circumstances  and  facts,  of  the  rela- 
tion of  the  parties,  and  of  the  purpose  sought  to  be  accomplished,  is 
admissible  to  aid  the  court  to  determine  whether  an  instrument  is  a 
sale  or  an  option,  Caine  v.  Hagenbarth,  37  Utah  69,  106  P.  945 ; 
Low  V,  Young,  158  Iowa  15,  138  N.  W.  828;  McHenry  v.  Mitchell, 
219  Pa.  297,  68  Atl.  729. 

See  Collier  v.  Eobinson,  (Tex.  Civ.  App.)  129  S.  W.  389,  evidence  not 
admissible  to  show  contract  optional. 

Admissible  to  show  whether  sum  named  in  option  contract  is  penalty 
or  Liquidated  damages,  Kinkaid  v.  Levy,  151  Mo.  App.  352,  131 
S.  W.  757. 

lODugan  V.  Kelly,  75  Ark.  55,  86  S.  W.  831;  Jersey  Island  Dredging  Co. 
V.  Whitney,  149  Cal.  269,  86  P.  691;  Wells  v.  Gress,  118  Ga.  566,  45 
S.  E.  418;  Chambers  v.  Prewitt,  172  Dl.  615,  50  N.  E.  145;  Ransdel 
V.  Moore,  153  Md.  393,  53  N.  E.  767,  53  L.  R.  A.  753;  Citizens 
Bank  v.  Brigham,  61  Kan.  727,  60  P.  754;  Lee  v.  Carter,  52  La. 
Ann.  1453,  27  So.  739;  Alvord  v.  Cook,  174  Mass.  120,  54  N.  E.  499; 
Gregory  v.  Village  of  Lake  Linden,  130  Mich.  368,  90  N.  W.  29; 
Calloway  v.  Henderson,  130  Mo.  77,  32  S.  W.  34,  description ;  Oliver 
V.  Oregon  Sugar  Co.,  42  Ore.  276,  70  P.  902 ;  Richardson  v.  Planters 
Bank,  94  Va.  130,  26  S.  E.  413. 
Evidence  of  what  took  place  before  or  after  the  execution  of  the  option 
is  not  admissible  to  vary  its  terms,  Sirk  v.  Ela,  163  Mass.  394,  40 
N.  E.  183. 

To  show  real  consideration  or  want  of  consideration  when  not  required 
by  Statute  of  Frauds  to  be  expressed,  see  Sec.  331. 

Statements  by  secretary  of  corporation  as  to  extension,  etc.,  admissible 
against  corporation,  Abbott  v.  76  Land  Co.,  87  Cal.  323,  25  P.  693. 


§  124  LAW  OF  OPTION  CONTRACTS  62 

Sec.  124.  INTERPRETATION.  MISCELLA- 
NEOUS.— A  lease  provided  the  tenant  should  have 
the  privilege  of  purchasing  the  premises  at  any 
time  within  four  years,  for  a  specified  sum,  and 
that  if  the  landlord  did  not  dispose  of  the  premises 
before  the  expiration  of  the  term  of  the  lease,  the 
tenant  might  have  a  renewal  on  the  same  terms  and 
conditions,  and  it  was  held  that  the  instrument 
must  be  construed  as  providing  that  if  the  lessor 
did  not  dispose  of  the  premises  before  the  expira- 
tion of  the  term,  the  tenant  should,  at  his  option, 
have  a  renewal,  but  that  the  lessor  could  not  exer- 
cise his  reserved  right  of  disposal  within  the  four 
years  without  first  giving  the  tenant  an  opportu- 
nity to  purchase.^ 

A  clause  in  an  oil  lease  giving  the  lessee  "the 
option  to  drill  the  well  or  not,  or  pay  said  rental  or 
not,  as  he  may  elect,"  construed  as  requiring  the 
lessee  to  dig  a  well  or  pay  the  rent.^ 

A  clause  in  a  lease  giving  the  lessee  ''the  oppor- 
tunity" to  purchase  the  leasehold  estate  "upon 
terms  and  conditions"  fixed  by  lessor,  merely  binds 
the  lessor  to  notify  the  lessee  of  his  decision  to  sell 
giving  the  lessee  his  "terms  and  condition,"  and 

1  Elston   V.    Schilling,   42   N.   Y.    79;    see   Schroeder   v.   Gemeinder,    10 

Nev.  355. 

Court  leans  against  construction  for  perpetual  renewal  of  leases,  Bayn- 
ham  V.  Guy's  Hospital,  3  Ves.  Jun.  295,  30  Eng.  Reprint  1019; 
Moore  v.  Foley,  6  Ves.  Jun.  232,  31  Eng.  Reprint  1027. 

Devitt  V.  Kaufman  County,  27  Tex.  Civ.  App.  332.  66  S.  W.  224,  holds 
on  the  facts  that  optionee  had  no  right  to  purchase  unless  the 
oi)tionor  elected  to  terminate  the  lease  by  making  a  sale. 

2  McMillan  v.  Phila.  Co.,  159  Pa.  142,  28  Atl.  220. 

Option  construed  to  cover  bonds  first  described  and  not  other  bonds 
referred  to  in  option,  Martyn  v.  Hitchings,  192  Mass.  71,  78  N.  E. 
380. 


63  INTERPRETATION — MISCELLANEOUS  §  124 

does  not  require  the  lessor  to  find  a  third  person  to 
make  the  offer.* 

A  provision  in  a  lease  that  the  lessee  may  buy  the 
land  "at  the  option  of  the  parties"  means  that  the 
lessee  may  buy  it  at  his  own  option/ 

A  contract  giving  defendants  an  option  to  pur- 
chase and  take  sand  and  gravel  from  plaintiffs' 
land,  was  held  not  to  give  them  an  irrevocable  right, 
but  merely  to  entitle  them  to  at  least  $1,000  worth.'^ 

A  covenant  to  convey  when  the  covenantor 
"should  find  a  purchaser"  becomes  obligatory  when 
the  covenantor  finds  some  person  who  is  able  and 
willing  to  pay  the  covenantor's  price  and  to  pur- 
chase the  property.^ 

In  a  contract  by  which  defendant  agrees  to  sell  to 
l^laintiff  certain  sheep  and  lambs  on  certain  condi- 
tions, defendant  renewed  an  option  for  ten  days  to 
sell  the  lambs  to  third  parties  and  the  contract 
provided  that  at  the  expiration  of  the  ten  days,  the 
lambs  could  be  sold  only  to  plaintiff,  and  it  was 
held  that  the  contract  did  not  give  defendant  an 

3  Chandler  &  Co.  y.  McDonald- Weber  Co.,  215  Mass.  365,  102  N.  E.  319, 

distg.  Hayes  v.  O'Brien,  149  Bl.  403,  37  N.  E.  73,  23  L.  R.  A.  555. 

Agreement  construed  as  giving  an  option  to  buy  and  not  option  to 

sell,  Cummings  v.  Town  of  Lake  Realty  Co.,  86  Wis.  382,  57  N.  W.  43. 

4  Mack  V.  Dailey,  67  Vt.  90,  39  Atl.  686. 

Clause  in  lease  construed  as  giving  lessee  alone  right  to  renew,  Swank 
V.  St.  Paul  Ry.  Co.,  72  Minn.  380,  75  N.  W.  594. 

5  Stebbina  v.  Myers,  143  N.  Y.  S.  296. 

An  option  agreement  providing  that  a  church  should  have  the  option 
to  buy  a  lot  and  that  the  lot  should  not  be  sold  by  the  optionor 
unless  plaintiff  should  be  constrained  by  circumstances  requiring 
such  sale,  means  any  cause  requiring  sale  and  not  merely  financial 
causes,  Smyth  v.  Nelson,  135  Ga.  96,  68  S.  E.  1032. 

6  McCormick  v.  Stephany,  61  N.  J.  Eq.  208,  48  Atl.  25. 


§  124  LAW  OF  OPTION   CONTRACTS  64 

option,  after  not  selling  to  third  persons,  to  refuse 
to  sell  to  plaintiff/ 

A  testator  devised  lands  to  his  children  equally, 
to  be  amicably  divided  by  them,  and,  if  possible, 
W.  J.  to  take  a  certain  40  acres.  If  they  could 
not  agree  to  such  partition,  and  the  premises  had 
to  be  sold,  he  directed  that  W.  J.  should  have  the 
first  right  to  purchase  the  40  acres  "at  the  price  at 
which  it  may  be  appraised,  or  at  such  price  as  may 
be  agreed  upon."  Held,  that  W.  J.  had  the  right 
to  purchase  the  40  acres  at  the  appraised  value 
whether  or  not  the  other  heirs  would  pay  more  for 
the  same  tract.* 

The  general  rule  is  that  conditions  precedent  to 
the  exercise  of  the  option  rights  must  be  strictly 
complied  with,  but  whether  a  particular  provision 
amounts  to  a  condition  precedent  depends  on  the 
intention  of  the  grantor  gathered  from  the  whole 
instrument  and  existing  facts. ^ 

7  Rothrock  v.  Hunter,  66  Wash.  543,  119  P.  1114. 

8  Snyder  v.  Snyder,  75  Iowa  255,  39  N.  W.  297. 

9  Frank  v.  Stratford-Handcock,  13  Wyo.  37,  77  P.  134,  67  L.  R.  A.  571, 

110  A.  S.  R.  963,  making  deposit. 
Woodruff  V.  Woodruff,  44  N.  J.  Eq.  349,  16  Atl.  4,  1  L.  R.  A.  380, 
holding  courts  will  incline  against  construing  a  repurchase  clause  in 
a  deed  as  a  conditioo. 


CHAPTER  II. 

FORM  AND  VALIDITY. 

Sec.  201.     Essentials  of  option  contract. 

Sec.  202.     Parties.    Generally. 

Sec.  203.     Parties.    Executor.    Guardian.    Donee. 

Sec.  204.     Parties.    Agent.    Authority  and  liability  of. 

Sec.  205.     Parties.   Agent.    Authority  and  liability  of,  continued. 

Sec.  206.     Parties.    Tenants  in  common.    Joint  tenants. 

Sec.  207.     Parties.    Homestead  and  dower  right  of  wife. 

Sec.  208.     Formal  requisites. 

Sec.  209.     Terms  and  provisions  must  be  definite  and  certain. 

Sec.  210.     Terms  and  provisions  must  be  definite  and  certain.    Price. 

Sec.  211.  Terms  and  provisions  must  be  definite  and  certain.  Price  fixed 
by  offer  of  third  parties,  etc. 

Sec.  212.  Terms  and  provisions  must  be  definite  and  certain.  "Refusals. ' ' 
Preference  right  to  purchase,  etc. 

See.  213.  Terms  and  provisions  must  be  definite  and  certain.  Arbitra- 
tion, valuation  and  appraisal  clauses. 

Sec.  214.     Description. 

Sec.  215.     Legality  and  validity. 

See.  216.     Futures. 

Sec.  217.     Mistake,  fraud,  etc. 

Sec.  218.     Time  limit.   Perpetuities. 

Sec.  219.     Perpetuities.    Common  law  rule.    The  Gomm  decision. 

Sec.  220.     Perpetuities,  continued.    The  Starcher  Brothers  decisions. 

Sec.  221.  Perpetuities,  continued.  Rule  under  Statutes  providing  against 
suspension  of  power  of  alienation. 

Sec.  222.     Perpetuities.  Rule  where  no  time  limit  is  expressly  fixed  by  the 

option. 

Sec.  223.     Perpetuities.  Leases  and  like  instruments. 

Sec.  224.     Perpetuities.  Option  for  life  or  for  term  of  years. 
5 — Option  Contracts.  (65) 


§§  201,  202  LAW  OF  OPTION  CONTRACTS  66 

Sec.  201.  ESSENTIALS  OF  OPTION  CON- 
TRACT.— The  formal  essentials  of  a  valid  option 
contract  differ  in  no  respect  from  those  of  any 
other  contract.  There  must  be  an  offer  to  sell  a 
right  of  election,  whether  it  be  one  to  purchase,  to 
sell,  to  deliver,  to  return,  or  otherwise.  The  offer 
must  be  accepted  and  the  option  agreement  con- 
cluded.^ The  option  must  be  supported  by  a  con- 
sideration, or,  in  some  jurisdictions,  it  is  sufficient 
if  it  is  under  seal.  The  option  contract  thus  raised 
must  be  in  the  form  required  by  law.  The  parties 
must  be  competent  in  law  to  make  a  valid  contract 
and  their  assent  thereto  must  be  free  from  fraud, 
duress,  undue  influence,  and  mistake.  In  addition 
to  these  the  object  of  the  contract  must  be  legal. 
The  consideration  to  support  the  option  and  the 
Statute  of  Frauds  are  subjects  which  will  be  dis- 
cussed in  separate  chapters.  The  other  matters 
will  be  presented  in  the  following  sections  of  this 
chapter. 

Sec.  202.    PARTIES.    GENERALLY.  —It  is 

not  the  intention  to  discuss  here  the  competency  of 
parties  to  enter  into  an  option  contract,  beyond 
saying  that  the  test  is  the  same  for  an  option  as  for 
any  other  contract. 

The  competency  of  the  parties  being  assumed, 
the  inquiry  naturally  arises  as  to  the  authority  or 
power  of  a  party  to  grant  or  sell  an  option 
privilege. 

1  Negotiations  which  are  not  concluded,  or  which  are  broken  off  by  the 
parties,  do  not  give  rise  to  an  option  contract,  Bradford  v.  Haas, 
111  La.  148,  35  So.  493. 


67  PARTIES  §  203 

The  decisions  exhibit  four  classes  of  cases :  First, 
those  where  the  party  is  the  sole  owner  in  his  own 
right;  secondly,  those  where  the  party  is  a  joint 
tenant,  tenant  in  common,  or  partner ;  thirdly,  those 
where  the  party  is  acting  in  a  representative  capac- 
ity such  as  executor,  trustee,  etc. ;  and  fourthly, 
those  where  the  party  acts  through  an  agent. 

The  right  of  a  party  of  the  first  class  to  grant  or 
sell  an  option  privilege  is  undoubted.  The  only 
question  ever  raised  bearing  even  remotely  on  this 
point,  is  the  invalidity  of  the  option  contract,  a 
subject  which  is  discussed  elsewhere  in  this  chap- 
ter.^ The  power  and  authority  of  the  other  classes 
will  be  found  presented  in  the  following  sections  of 
this  chapter.^ 

Sec.  203.  PARTIES.  EXECUTOR.  GUARD- 
IAN.— It  is  said  in  a  North  Carolina  case^  that 
in  respect  to  the  personal  estate  of  the  testator,  the 
title  to  which  vests  in  the  executors  jointly,  one  of 

1  See  Sec.  215. 

2  Joint  optionees  sustain  fiduciary  relations  and  equity,  in  a  proper  case, 

will  protect  the  right  of  the  one  against  the  other,  Merritt  v.  Joyce, 
117  Minn.  235,  135  N.  W.  820.  But  on  failure  to  pay  the  price 
either  optionee  is  at  liberty  to  take  a  new  option  excluding  the  others 
from  its  benefits,  Commercial  Bank  v.  Weldon,  148  Gal.  601,  84  P.  171. 

Power  of  City  to  take  and  consent  to  extension  of  option,  see  Gath- 
right  V.  H.  M.  Byllesby,  154  Ky.  106,  157  S.  W.  45. 

An  instrument  signed  by  defendant  setting  forth  that  she  agreed  to 
sell  to  E  and  plaintiff  "or  either  of  them,"  certain  land  is  fatally 
defective,  since  it  showed  no  definite  purchaser,  being  at  most  an 
offer  to  sell  to  either  of  the  persons  named,  Mossie  v.  Cyrus,  61  Ore. 
17,  119  P.  485. 

iTrodgen   y.    Williams,    144    N.    C.    192,    56    S.    E.    865,    10    L.   E.    A. 
(N.  S.)  867. 
Clay  V.  Eufford,  5  DeG.  &  Sm.  768,  64  Eng.  Eeprint  1337,  holds  that 
a  donee  of  a  power  of  sale  can  not  give  a  future  option. 


§  203  LAW  OF  OPTION  CONTRACTS  68 

them  may  sell  or  dispose  of  it ;  but  that  the  rule  is 
different  where  a  power  to  sell  land  is  conferred 
upon  two  executors.  In  such  case  they  must  join  in 
the  sale  and  in  the  execution  of  the  deed.  The  same 
case  also  holds  that  a  power  to  sell  real  estate  con- 
ferred on  the  executor  does  not  include  the  power 
to  execute  an  option  contract,  and  a  later  case  holds 
that  the  executor  has  no  such  power  when  he  is 
not  vested  with  power  to  sell.^ 

Another  case  holds  that  an  executor  is  not  author- 
ized to  give  an  option  on  lands  belonging  to  the 
estate  as  against  the  next  of  kin,  although  it 
appears  to  be  an  advantage  to  the  estate.^ 

In  another  North  Carolina  case  it  is  held  that  an 
option  contract,  by  a  guardian,  to  sell  his  ward's 
real  estate,  without  any  authority  from  the  Court 
to  enter  into  such  a  contract,  is  contrary  to  public 
policy  and  void.* 

An  administrator  of  the  lessee  under  a  lease 
which  provides  for  renewal  only  at  the  option  of  the 
lessee,  on  a  valuation  of  the  land  only,  the  improve- 
ments belonging  to  the  lessee,  and  making  no  pro- 
vision for  compensation  therefor,  if  there  was  no 
renewal,  can  not  bind  the  estate  by  renewal.' 

2  Hedgecock  v.  Tate,  (N.  C.)  85  S.  E.  34. 

3  Oceanic  Steam  Nav.  Co.  v.  Sutherberry,  16  Ch.  Div.  236,  15  L.  J.  Ch. 

308,  43  L.  T.  743,  29  W.  R.  813. 

4  LeRoy  v.  Jacobosky,  136  N.  C.  443,  48  S.  E.  796,  67  L.  R.  A,  977,  and 

also  holds  that  where   lack   of   authority  to   do   so  was   known   by 
optionee,  the  latter  had  no  action  for  breach. 

e  Chisholm  v.  Toplitz,  82  N.  Y.  S.  1081,  82  App.  Div.  346,  affd.  178  N.  Y. 
599,  70  N.  E.  1096. 


69  PARTIES — AGENT  §  204 

An  executor  may  be  directed  by  the  Court  to  sell 
testator ^s  property  subject  to  an  existing  lease  giv- 
ing the  lessee  an  option  to  purchase  at  the  end  of 
the  term,  when  the  lease  does  not  prohibit  a  sale 
during  the  term.^ 

Sec.  204.  PARTIES.  AGENT.  AUTHORITY 
AND  LIABILITY  OF.— The  right  of  a  party  to 
negotiate  and  give  an  option  contract  himself  per- 
sonally or  through  the  agency  of  some  other  person, 
is  common  place  law.  Where,  however,  the  con- 
tract falls  within  the  provisions  of  the  statute  of 
frauds  the  authority  of  the  agent  to  act  for  the 
principal  must  be  evidenced  by  writing  in  accor- 
dance with  the  provisions  of  that  statute.^ 

Whether  a  particular  contract  is  an  option,  or  a 
mere  agency  to  sell,  is  presented  in  another  place.^ 
The  decisions  exhibited  here  are  those  dealing  with 
the  power  and  authority  of  the  agent  and  the  rights, 
duties  and  liabilities  growing  out  of  the  relation  of 
principal  and  agent. ^ 

A  power  of  attorney  authorizing  the  agent  to 
**  superintend  my  real  and  personal  estate,  to  make 
contracts  .  .  .  and  generally  to  do  all  things  that 

6  In  re  Brannan's  Estate,   (Cal.)   51  P.  320;   see,  however,  Magruder  v. 
Hornot,  110  La.  585,  34  So.  696. 

1  See  See.  407. 

2  See  Sec.  114. 

An  optionee  as  such  has  no  authority  to  act  as  agent  of  the  owner, 
Raymer  v.  Hobbs,  (Cal.  App.)  146  P.  906. 

3  Agent  selling  merchandise  has  no  implied  authority  to  give  the  purchaser 

an  option  to  return  any  goods  he  might  subsequently  buy  from  the 
principal,  Ide  v.  Brody,  156  Bl.  App.  479, 


§  204  LAW  OF  OPTION  CONTRACTS  70 

concern  my  interest  in  any  way,  real  or  personal 
whatsoever,"  gives  the  agent  power  to  execute  a 
lease  of  real  estate  containing  an  option  to  pur- 
chase the  leased  land/ 

A  power  of  attorney  merely  to  sell  land  implies 
that  the  agent  shall  sell  for  cash  and  he  can  not  sell 
on  credit  in  the  absence  of  authority  contained  in 
the  power  of  attorney.^ 

One  dealing  with  an  agent  acting  under  a  power 
of  attorney  is  taken  to  deal  with  the  power  spread 
out  before  him  and  must  inspect  it  to  see  whether 
the  agent's  act  is  authorized  by  the  power;  one 
dealing  with  a  special  agent  does  so  at  his  peril. ^ 

A  power  of  attorney  may  fix  the  limit  of  time 
within  which  the  agent  is  to  do  the  act  and  where 
it  fixes  a  reasonable  time  for  doing  an  act,  it  must 
be  done  by  the  agent  within  a  reasonable  time  in 
order  to  bind  the  principal.^ 

A  broker  and  member  of  the  chamber  of  com- 
merce of  a  city  who  receives  from  another  an  order 
to  purchase  a  quantity  of  wheat  for  the  latter,  has 
authority  to  execute  the  order  according  to  the 
usage  and  custom  of  the  business.^ 

4  DeEutte  v.  Muldrow,  16  Gal.  505. 

5  Dyer  v.  Duffy,  39  W.  Va.  148,  19  S.  E.  540,  24  L.  E.  A.  339. 

6  Van  Dusen-Harrington  Co.  v.  Jungeblut,  75  Minn,  298,  77  N.  W.  970, 

74  A.  S.  E.  463. 
A  contract  signed  by  a  person  with  the  addition  to  his  signature  of 

"agent,"  is  the  contract  of  the  person  signing,  Pearson  v.  Home, 

139  Ga.  453,  77  S.  E.  387. 
General  manager  of  corporation  where  money  is  paid  to  him  under 

lease  and  option  is  turned  over  by  him  to  corporation  and  retained 

by  it.  West  v.  Washington  etc.  E.  Co.,  49  Ore.  436,  90  P.  666. 


71  PARTIES — AGENT  §  205 

Sec.  205.  PARTIES.  AGENT.  AUTHORITY 
AND    LIABILITY    OF,    CONTINUED.  —  An 

agent  authorized  to  give  an  option  can  not  appoint 
a  sub-agent  for  whose  services  the  principal  will 
be  liable.^ 

Where  the  owner  of  land  gave  a  written  option 
to  a  broker  for  a  given  time  and  at  a  given  price, 
by  the  terms  of  which  the  broker  was  constituted 
the  agent  of  the  owner  to  sell  the  land  on  commis- 
sion, the  agent  can  not  buy  for  himself  at  the  price 
named.^  Nor  can  an  agent  to  buy,  purchase  from 
himself,  although  the  conduct  of  the  agent  is  not 
fraudulent.* 

The  general  rule  is  that  the  authority  of  the 
agent  to  sell  at  a  fixed  price  does  not  empower  him 
to  give  an  option  to  purchase.^ 

Another  well-established  rule  is,  that  an  agent 
employed  to  seU  or  find  a  purchaser,  has  not  per- 
formed the  contract  by  negotiating  a  mere  option 
contract,  and  therefore,  is  not  entitled  to  recover 

1  Sorenson  v.  Smith,  65  Ore.  78,  129  P.  757. 

2  Colbert  v.  Shepherd,  89  Va.  401,  16  S.  E.  246. 

3  Montgomery  v.  Hundley,  205  Mo.  138,  103  S.  W.  527. 

4  Swift  V.  Erwin,  104  Ark.  459,  148  S.  W.  267 ;  Field  v.  Small,  17  Colo. 

386,  30  P.  1034;  Jenkins  v.  Locke,  3  App.  D.  C.  485;  Wynkoop  v. 
Shoemaker,  37  App.  D.  C.   258;    Ide  v.  Brody,  156   HI.  App.  479, 
option  to  return;  Glass  v.  Eowe,  103  Mo.  513,  15  S.  W.  334. 
Trodgen  v.  Williams,  144  N.  C.  192,  56  S.  E.  865,  10  L.  R.  A,  (N.  S.) 
867,  executor's  power  under  will. 

Tibbs  V.  Zirkle,  55  W.  Va.  49,  46  S.  E.  701,  104  A.  S.  E.  977,  2  Ann. 
Cas.  421,  power  of  co-agent. 


§  205  LAW  OF  OPTION  CONTRACTS  72 

from  the  principal  the  agreed,  or  any,  compensa- 
tion for  such  services.^ 

An  agent  employed  to  procure  an  option  contract 
is  not  entitled  to  recover  commissions  from  the 
principal  for  procuring  an  agreement  to  purchase.*' 

An  agent  employed  to  procure  an  option  for  the 
purchase  of  property  who  obtains  the  same  in  his 
own  name  upon  an  oral  understanding  between 
him  and  the  optionor  that  the  option  was  procured 
for  the  employer,  is  the  agent  of  the  employer  who 
is  entitled  to  the  benefit  of  the  option."^  And  so 
where  a  broker  is  employed  to  purchase  land  and 

5  Fox  V.  Denargo  L.  Co.,  37  Colo.  203,  86  P.  344;  McGonigal  v.  Eangh- 

ley,  6  Pennewill  (Del.)  1,  63  Atl.  801,  withdrawal  of  option;  Martin 
V.  Wilson,  24  Idaho  353,  134  P.  532;  Eamsey  v.  West,  31  Mo.  App. 
676;  Ward  v.  Zborowski,  63  N.  Y.  S.  219,  31  Misc.  Eep.  66;  Benedict 
V.  Pincus,  191  N.  Y.  377,  84  N.  E.  284;  Brackenridge  v.  Claridge, 
91  Tex.  527,  44  S.  W.  819,  43  L.  E.  A.  593;  Eunck  v.  Dimmick,  51 
Tex.  Civ.  App.  214,  111  S.  W.  779;  Lawrence  v.  Pederson,  34  Wash. 
1,  74  P.  1011;  Kinney  v.  Eckenberger,  (Wash.)  145  P.  665;  Tibba 
V.  Zirkle,  55  W.  Va.  49,  46  S.  E.  701,  104  A.  S.  E.  977,  2  Ann.  Cas. 
421;  Scott  V.  Merrill's  Estate,  (Ore.)  146  P.  99. 

6  Giles  V.  Swift,  170  Mass.  461,  49  N.  E.  737. 

Eight  of  agent  to  commission  when  he  sells  property  by  option  to  A 
and  then  again  sells  the  property  for  A,  Pinnerty  v.  Fritz,  5  Colo.  174. 

But  a  broker  employed  to  procure  a  customer  with  whom  the  principal 
would  enter  into  an  option  contract  on  terms  agreed  on  between  the 
principals,  need  not  consummate  the  deal,  and  if  he  is  the  procuring 
cause  of  the  negotiations,  he  has  earned  his  commissions,  Leadville 
M.  Co.  V.  Hemphill,  (Ariz.)  149  P.  384. 

Eight  of  optionee  to  recover  from  his  agent  share  of  profits  on  sale 
of  option,  Krhut  v.  Phares,  80  Kan.  515,  103  P.  117. 

Broker  who  gives  option  to  prospective  purchaser,  can  not  claim  to 
have  found  a  purchaser  until  the  purchaser  elects  and  the  purchase  is 
completed.  Block  v.  Eyan,  4  App.  D.  C.  283;  Martin  v.  Wilson, 
supra,  and  the  election  must  be  within  the  time  limit.  Brown  v. 
Mason,  155  Cal.  155,  99  P.  867,  12  L.  E.  A.  (N.  S.)  328;  see  Martin 
V.  Wilson,  24  Idaho  353,  134  P.  532 ;  Barber  v.  Hilderbrand,  42  Neb. 
400;  60  N.  W.  594;  Horton  v.  Immen,  145  Mich.  438,  108  N.  W.  746. 

7  Henry  v.  Black,  213  Pa.  620,  63  Atl.  250. 


73  PARTIES — TENANTS  §  206 

he  takes  an  option  in  his  own  name,  he  is  not  enti- 
tled to  specific  performance  when  a  conveyance  has 
been  made  to  the  principal.^ 

Plaintiff  employed  the  defendant  to  procure  an 
option  for  him  on  certain  property  at  the  price  of 
$1,850  and  defendant  secured  an  option  on  the  prop- 
erty from  the  owner  to  himself  for  $1,520.  Plaintiff 
paid  defendant  $1,850,  out  of  which  the  defen- 
dant paid  the  owner  $1,520,  took  a  deed  in  his  own 
name  and  then  conveyed  the  property  to  plaintiff. 
It  was  held  defendant  was  the  agent  of  plaintiff; 
that  the  conduct  of  defendant  was  fraudulent 
and  that  plaintiff  was  entitled  to  recover  from 
defendant  the  excess  of  price  paid  by  him  to 
defendant.^ 

Sec.  206.  PARTIES.  TENANTS  IN  COM- 
MON. JOINT  TENANTS.— It  is  familiar  law 
that  co-tenants  do  not  sustain  the  relation  of  prin- 
cipal and  agent  and  also  that  they  are  not  partners, 
and  the  general  rule  is  that  one  co-tenant  has  no 

8  Pace  V.  Cline,  (Colo.)  147  P.  672. 

9  Callaway  v.  Wilson,  141  Cal.  421,  74  P.  1035. 

Promoter  of  plan  for  establishing  manufacturing  plant  held  on  facts 
not  to  be  the  agent  of  the  owner  of  the  land,  Boyden  v.  Hill,  198 
Mass.  477,  85  N.  E.  413. 

A  co-agent  with  power  to  sell  is  not  bound  by  an  unauthorized  option 
not  given  or  ratified  by  him,  and  if  he  purchases  for  himself  he  can 
not  be  held  as  trustee  for  the  claimant  under  such  option,  Tibbs  v. 
Zirkle,  55  W.  Va.  49,  46  S.  E.  701,  104  A.  S.  E.  977,  2  Ann.  Gas.  421. 

An  agreement  of  the  optionee  in  possession  under  oral  extension  to 
divide  commissions  with  optionor  on  sale,  is  within  California  Statute 
of  Frauds,  Crowell  v.  Ewing,  4  Cal.  App.  358,  88  P.  285. 

As  to  ratification  by  principal  of  acts  of  agent  where  part  performance 
of  oral  contract  is  involved,  see  West  v.  Wash.  etc.  R.  R.,  49  Ore. 
436,  90  P.  666. 


§  206  LAW  OF  OPTION  CONTRACTS  74 

power  or  authority  to  bind  the  estate  of  the  other. 
And  this  rule  applies  to  both  real  and  personal 
property/ 

The  estate  of  the  co-tenant  is  several;  he  holds 
by  a  separate  and  distinct  title;  the  only  unity  is 
that  of  possession.  It  follows  that  one  tenant  in 
common  can  not,  in  the  absence  of  previous  author- 
ity, subsequent  ratification,  or  estoppel,  grant  an 
option  on  the  common  property  that  will  be  binding 
upon  the  other  tenants.^  However,  one  tenant  in 
common  may  grant  an  option  upon  his  undi^dded 
interest,^  and  of  course  all  of  the  tenants  may  join 
in  granting  an  option  which  will  be  effective  to 
bind  their  respective  interests  or  estates  in  the 
common  property. "^ 

Where  a  co-tenant  of  land,  without  authority, 
attempted  to  bind  his  co-tenants  to  an  option  con- 
tract to  sell  the  land  and  assumed  authority  to  sign 
the  name  of  his  co-tenant  thereto,  the  latter  was 
not  required  to  repudiate  the  contract  or  take  any 
action  in  the  premises  to  notify  the  purchaser,  of 
his  co-tenant's  lack  of  authority,  on  pain  of  being 
presumed  to  have  ratified  the  same,  but  was  enti- 
tled to  ignore  the  transaction.  Nor  was  he  estopped 
to  deny  such  want  of  authority  in  the  absence  of 

iTuttle  V.  Campbell,  74  Mich.  652,  42  N.  W.  384,  16  A.  S.  R.  652; 
Jackson  v.  Moore,  87  N.  Y.  S.  1101,  94  App.  Div.  504. 

2  See  James  v.  Darby,  100  Fed.  224,  40  C.  C.  A.  341,  also  holding  that  an 
acceptance  by  one  of  two  owners  in  common  of  land,  of  an  offer 
to  purchase  the  entire  part,  without  the  sanction  of  the  other  co- 
owner  does  not  create  a  contract  binding  on  either  of  the  parties; 
see  Woniaek  v.  Douglas,  157  Ky.  716,  163  S.  W.  1130,  broker's 
commission. 

8  Woods  V.  Early,  95  Va.  307,  28  S.  E,  374;  Sehee  v.  McQuilken,  59 
Ind.  269. 

4  James  v.  Darby,  supra. 


75  PARTIES— HOMESTEAD DOWER  §  207 

evidence  that  he  accepted  benefits  under  the  con- 
tract so  made  by  his  co-tenant.^ 

So  far  as  the  power  of  joint  tenants  to  grant  an 
option  privilege  is  concerned,  the  above  rules 
touching  tenants  in  common  govern.^ 

Sec.  207.  PARTIES.  HOMESTEAD  AND 
DOWER  RIGHT  OF  WIFE.— The  husband  as 
such  has  no  authority  or  power  to  grant  an  option 
covering  the  dower  right  of  his  wife  in  his  lands.  ^ 
Nor,  under  statutes  common  to  many  states,  does 
the  granting  of  an  option  by  a  husband  for  the  pur- 
chase of  the  homestead  affect  the  interest  or  estate 
of  his  wife  therein,  and  in  many  jurisdictions,  in 
the  latter  case,  the  contract  is  void.^ 

5  Naylor  v.  Parker,  (Tex.  Civ.  App.)   139  S.  W.  93. 

As  to  authority  of  managing  partner,  see  Kreutzer  v.  Lynch,  122  Wis. 
474,  100  N.  W.  887;  see  also  Sec.  806a. 

6  See  People  v.  Marshall,  8  Cal.  51;   Browning  v.  Cover,  108  Pa.  595; 

Trustees  v.  Lodge,  100  Wis.  223,  75  N.  E.  954,  69  A.  S.  E.  912. 

iGraybill  v.  Braugh,  89  Va.  895,  17  S.  E.  558,  37  A.  S.  R.  894,  21 
L.  R.  A.  153;  Krah  v.  Radcliffe,  78  N.  J.  Eq.  305,  81  Atl.  1133; 
Sloan  V.  Williams,  138  111.  43,  27  N.  E.  531,  2  L.  R.  A.  496;  Jones 
V.  Barnes,  94  N.  Y.  S.  695,  105  App.  Div.  287;  Aiple  v.  Spelbrink, 
211  Mo.  671,  111  S.  W.  480,  14  Ann.  Cas.  652. 

2  Miller  v.  Gray,  29  Tex.  Civ.  App.  183,  68  S.  W.  517;  Moses  v.  McClain, 
82  Ala.  370,  2  So.  741,  holding  on  facts,  deed  of  husband  alone  void; 
see  Faraday  Coal  Co.  v.  Owens.  26  Ky.  L.  Rep.  243,  80  S.  W.  1171. 

Though  wife  with  husband  signed  deed  conveying  homestead  and  de- 
posited same  in  escrow,  the  grantee  is  not  entitled  to  specific  per- 
formance of  the  contract  where  the  notary  who  took  the  wife's 
affidavit  was  disqualified,  Watkins  v.  Youll,  70  Neb.  81,  96  N.  W. 
1042. 

If  the  homestead  is  declared  after  the  execution  of  an  option  by  the 
husband,  the  wife  having  notice  thereof,  the  homestead  right  is 
subject  to  the  rights  of  the  optionee  to  enforce  the  same.  Smith  v. 
Bangham,  156  Cal.  359,  104  P.  689,  28  L.  R.  A.  (N.  S.)  522. 


§  207  LAW  OF  OPTION  CONTRACTS  76 

However,  where  the  wife  executes  the  option 
with  her  husband,  as  well  as  where  she  signs  an 
option  made  by  the  husband  alone,  her  estate  will 
be  bound. ^  But  if  she  has  not  obligated  herself, 
she  commits  no  fraud  by  refusing  to  release  her 
dower  right,  since  such  right  is  her  own  property 
and  not  that  of  her  husband.^ 

Where  the  wife  joins  the  husband  in  a  convey- 
ance to  a  purchaser  with  notice  of  plaintiif 's  prior 
option,  the  effect  of  the  conveyance  is  to  release  the 
dower  right  in  favor  of  the  prior  optionee.^ 

The  wife  of  the  optionee  acquires  no  dower  right 
in  the  optioned  property  prior  to  election  to  pur- 
chase. Therefore,  an  assignment  of  the  option  by 
the  optionee  can  be  made  by  him  prior  to  his  elec- 
tion, without  joining  his  wife  in  the  assignment.*^ 

Under  the  Kentucky  statute,  the  wife  has  no 
dower  interest  in  land  to  which,  before  marriage, 
the  husband  had  given  an  option  to  purchase,  where 
the  option  was  exercised  within  the  time  limit. '^ 

3  Agar  V.  Streeter,  183  Mich.  600,  150  N.  W.  160. 

The  fact  that  the  optionee  is  a  femme  covert  does  not  render  the 
option  void,  when  she  elects  and  offers  to  perform,  Yerkes  t.  Richards, 
153  Pa.  646,  26  Atl.  221,  34  A.  S.  E.  721. 

4  McCormick  v.  Stephany,  61  N.  J.  Eq,  208,  48  Atl.  25. 

5  Mansfield  v.  Hodgdon,  147  Mass.  304,  17  N.  E.  544. 

6  Fletcher  v.  Painter,  81  Kan.  195,  105  P.  500. 

7  Mineral  Dev.  Co.  v.  Hall,  (Ky.  L.)  115  S.  W.  230. 

Upon  death  of  husband,  the  dower  right  passes  to  the  wife  who  did 
not  execute  the  option  with  her  husband,  Eockland  etc.  Co.  v.  Leary, 
203  N.  Y.  469,  97  N.  E.  431. 


77  FORMAL  REQUISITES  OF  CONTRACT         §  208 

Sec.  208.  FORMAL  REQUISITES.— An  op- 
tion contract  is  not  a  deed  nor  is  it  a  specialty 
within  the  meaning  of  the  common  law  rule  requir- 
ing such  contracts  to  be  under  seal,  and  our  con- 
clusion, therefore,  is  that  an  option  contract  is 
valid  at  common  law  without  a  seal.  Option  con- 
tracts, however,  are  frequently  under  seal.  The 
effect  of  a  seal  in  some  jurisdictions  is  to  import 
a  consideration  to  support  the  option  contract,  or 
speaking  more  technically,  to  dispense  with  a  con- 
sideration, or  to  make  the  recital  of  consideration 
conclusive  against  the  parties.  This  subject  will 
be  further  discussed  in  the  chapter  devoted  to 
consideration.^ 

Whether  a  particular  option  contract  is  required 
to  be  in  writing  depends  upon  its  subject  matter 
and  terms.  This  subject  will  be  found  treated  in 
the  chapter  on  Statute  of  Frauds.^  It  may,  how- 
ever, be  here  said  that  an  oral  option  contract  is 
valid  unless  it  falls  within  the  provisions  of  that 
statute. 

7  Under  Montana  statute,  a  contract  giving  an  option  to  purchase  is  not 
a  conveyance  which  will  bar  dower  when  the  option  is  not  exercised 
until  after  the  death  of  the  husband,  Tyler  v.  Tyler,  50  Mont.  65, 
144  P.  1090 ;  also  holding  that  where  husband  and  wife  gave  an 
option  to  purchase  land  and  deposit  their  deed  in  escrow  and  the 
husband  dies  before  delivery,  the  widow  is  entitled  to  dower  in  the 
land. 
Defense  that  wife's  signature  to  the  option  was  procured  by  fraud, 
held  not  sustained,  Brewer  v.  Sowers,  118  Md.  681,  86  Atl.  228. 

1  Chapter  HL 

2  Chapter  IV. 

But  if  the  offer  contemplates  that  the  option  contract  shall  be  in  writ- 
ing, it  does  not  constitute  a  binding  contract  until  reduced  to  writing 
and  executed.  Couch  v.  McCoy,  138  Fed.  696. 


§  209  LAW  OF  OPTION  CONTRACTS  78 

No  particular  form  of  words  is  necessary  to  make 
an  option  contract.  The  courts  look  to  the  inten- 
tion of  the  parties,  and  if  the  intention  can  be 
gathered  from  the  language  used,  the  agreement 
will  be  upheld.  These  agreements  are  often  made 
by  correspondence  or  by  ''wire"  and  may,  there- 
fore, consist  of  several  different  writings.  But  the 
rule  is  the  same  in  all  cases.  If  the  contract  shows 
the  parties,  subject  matter,  price,  terms  and  con- 
ditions, and  is  legal,  and  meets  the  requirements 
of  the  Statute  of  Frauds,  it  will  be  upheld. 

An  option  contract  required  to  be  in  writing  must 
be  signed  by  the  optionor  but  it  is  not  necessary 
that  it  be  signed  by  the  optionee  to  entitle  the  latter 
to  enforce  it  upon  due  and  timely  election.^  The 
option  contract,  when  in  writing,  must,  also,  of 
course,  be  delivered.* 

Sec.  209.  TERMS  AND  PEO VISIONS  MUST 
BE  DEFINITE  AND  CERTAIN.— An  option 
contract  must  be  complete  and  certain  in  its  terms, 
that  is  to  say,  the  parties  and  its  subject  matter 
must  be  identified  by  it,  and  the  terms  and  provi- 
sions of  the  contract  must  be  stated  in  writing,  if 
required  to  be  in  writing,  or  established  by  compe- 
tent evidence,  if  not  required  to  be  in  writing,  with 
that  certainty  and  definiteness  which  will  enable  a 
court  to  determine  that  the  parties,  by  an  election 

3  See  Sec.  407. 

4  Where  an  option  contract  is  loft  with  a  third  person  as  custodian,  with- 

out any  condition  as  to  delivery,  it  is  not  an  escrow,  Watson  v.  Coast, 
35  W.  Va.  463,  14  S.  E.  249,  251. 


79  TERMS   AND   PROVISIONS   OF    CONTRACT  §  210 

thereunder,  have  concluded  an  agreement  and  also 
what  the  exact  terms  of  that  agreement  are.^ 

A  contract  giving  an  option  on  coal  in  place,  con- 
taining a  j)rovision  that  the  option  is  good  for  one 
month  at  eight  cents  royalty  per  ton,  is  not  specifi- 
cally enforceable,  even  though  there  is  an  election, 
where  there  is  no  provision  as  to  when  the  royalties 
should  be  paid,  or  fixing  the  term  of  the  contract,  or 
the  maximum  or  minimum  quantities  to  be  mined.^ 

Sec.  210.  TERMS  AND  PROVISIONS  MUST 
BE   DEFINITE   AND   CERTAIN.    PRICE.— 

There  is  conflict  in  the  cases  whether  a  contract 
falling  within  the  provisions  of  the  Statute  of 
Frauds  must  express  the  consideration  in  the  writ- 
ing.^ The  Statute  of  Frauds,  however,  goes  merely 
to  the  proof  of  the  contract.  The  rule  to  be  consid- 
ered here  goes  to  the  sufficiency  only  of  the  contract 

1  Couch  V.  McCoy,  138  Fed.  696;  Buckmaster  v.  Thompson,  36  N.  Y.  558; 

Grizzle  v.  Gaddis,  75  Ga.  350. 
An  option  contract  being  an  offer  of  a  contract  to  be  raised  by  an 

' '  acceptance, ' '  it  follows  that  an  option,  if  it  is  not  complete  and 

definite  in  all  its  terms,  can  not  be  raised  to  a  valid  contract  by 

mere  ' '  acceptance, ' '  see  Monahan  v.  Allen,  47  Mont.  75,  130  P.  768 ; 

Prior  V.  Hilton  &  D.  L.  Co.,  141  Ga.  117,  80  S.  E.  559. 
When  an  option  to  extend  a  lease  is  "at  the  mutual  agreement  of  the 

parties  to  the  lease,"  it  is  void.  Pause  v.  City  of  Atlanta,  98  Ga. 

92,  26  S.  E.  489,  58  A.  S.  R.  290. 
Option  held  not  indefinite  as  to  whether  it  was  an  option  or  a  lease, 

Hilberg  v.  Greer,  172  Mich.  505,  138  N.  W.  201. 
Specific  performance  not  decreed  when  contract  to  renew  lease  does  not 

specify  the  term,  McKnight  v.  Broadway   Inv.   Co.,   147   Ky.   535, 

145  S.  W.  377. 
Option   in   lease   held   not  uncertain   for   failure   to   state   when   rent 

was  due,  etc.,  Bushman  v.  Faltis,  (i'^Iich.)  150  N.  W.  848. 

2  Zimmerman  v.  Rhodes,  226  Pa.  174,  75  Atl.  207. 
1  See  Sec.  406. 


§  210  LAW  OF  OPTIOX  COXTRACTS  80 

from  the  standpoint  of  certainty  and  completeness. 
Excepting  the  cases  where,  in  the  absence  of  a  price 
fixed  by  the  parties,  the  law  implies  a  reasonable 
price  for  the  property  sold  and  delivered,-  an  execu- 
tury  contract,  the  terms  of  which,  do  not  fix  a 
definite  price,  or  fix  a  method  or  means  of  deter- 
mining the  price  with  certainty,  is  incumjDlete  and 
therefore  is  not  enforceable.^ 

AVhen,  for  instance,  a  clause  in  a  lease  gives  the 
lessee  the  option  to  renew  but  discloses  no  certain 
basis  for  the  ascertainment  of  the  rental  to  be  paid, 
it  is  void.^  Where  the  agreement  provides  that  the 
purchase  money  shall  be  paid  ''cash  on  delivery  of 
deed,  or  one-half  on  time,  if  terms  can  be  agreed 
upon  at  time  of  sale,"  it  is  void  for  uncertainty.^ 

An  ojjtion  contract  for  the  purchase  of  land 
which  is  certain  as  to  the  minimum  amount  of  cash 
to  be  paid,  and  giving  the  optionee  the  right  to  pay 

2  The  implication  to  pav  a  reasonable  price  arises  when  the  contract  has 

been  executed  and  mav  arise  when  the  contract  is  executory,  but  these 
cases  are  to  be  distinguished  from  those  where  the  contract  was 
never  completed  because  of  failure  to  agree  upon  the  price,  see 
Tiffany  on  Sales,  p.  33-34:. 

3  Elmore-Qmllian  &  Co.  v.  Parish  Bros.,  170  Ala.  499,  54  So.  203. 

4  Morrison  v.  Eossignol,  5  CaL  65;  see,  also,  Smoyer  v.  Both,   (Pa.)   13 

Atl.  191,  option  price  left  open;  Fogg  v.  Price,  145  Mass.  513,  14 
N.  E.  741,  option,  or  first  refusal,  no  price  named;  Baker  v.  Shaw, 
68  Wash.  99,  122  P.  611,  involving  inventory  and  deduction  for 
liabiUries. 
First  refusal  to  renew  lease  implies  same  terms,  Callahan  Co.  v. 
Michael,  45  Ind.  App.  215,  90  X.  E.  642. 

5  Wallace  v.  Figone,  170  Mo.  App.  362,  81  S.  W.  492;  Potts  v.  White- 

head, 21  N.  J.  Eq.  55,  affirmed  23  N.  J.  Eq.  512,  time  of  payment 
of  mortgage  note. 
Eider  v.  Gray,  10  Md   282,  69  Am.  Dec.  135,  agreement  to  be  reduced 
to  writing,  holding  when  subsequent  negotiations  necessary,  contract 
is  void;  also  Mocahan  v.  Allen,  47  Mont.  75,  130  P.  768. 


81  TERMS   AND   PRO  VISIONS   OF    CONTRACT  §  211 

all  cash,  becomes  defixdte  and  cei*tain  upon  the 
optionee's  accepting  the  option  and  paying  all  cash, 
and,  consequently,  the  other  condition  of  the  con- 
tract as  to  securing  the  balance  in  case  part  cash 
only  is  paid,  is  rendered  tmniaterial.® 

When  the  price  of  the  land  is  fixed  by  the  option 
contract  as  not  to  exceed  $75  per  acre,  it  is  not  void 
for  uncertainty  of  price,  as  the  optionee  can  make 
a  valid  contract  of  sale  by  accepting  the  offer  at 
that  price/ 

Sec.  211.  TERMS  AXD  PROYISIOXS  ]\rCST 
BE  DEFIXITE  AXD  CERTAIX.  PEICE 
FIXED  BY  OFFER  OF  THIRD  PARTIES, 
ETC. — An  option  recited  that  *'in  consideration  of 
$1000  advanced  to  me  by  H,  I  hereby  agree,  if  I 
should  decide  to  sell  my  half  interest  in  (certain 
lands),  to  give  him  the  option  of  purchasing  the 
same  for  his  clients  at  any  price  that  may  be  offered 
by  other  parties."  The  optionor,  without  notice  to 
the  optionee,  sold  the  property  to  a  third  person  for 
a  certain  sum.  The  optionee  thereupon  brought  suit 
to  recover  damages,  alleging  that  the  value  of  the 
option  was  the  excess  of  the  selling  over  the  option 
price.    It  was  urged  as  a  defense  that  the  price  to 

6Beddow  v.  Flage,  22  N.  D.  53,  132  N.  W.  637;  see  Ckristian  etc.  Co. 
V.  Beinville  etc.  Co.,  106  Ala.  124,  17  So.  352,  contract  to  supply 
water  for  ''tliree  years  or  longer." 

Powell  V.  LoTegrove,  8  DeG.  M.  &  G.  357,  2  Jxrr.  (X.  S.)  791.  ii  Eng. 
Beprint  427,  option  for  lease  and  rental  fixed  on  percentage  of 
purchase  price,  outlay  for  repairs,  etc.;  Fogg  t.  Price,  supra. 

7  Wright  V.  Kaynor,  150  Mich.  7,  113  N.  W.  779;  Heyward  v.  Willmarth, 
84  N.  Y.  S.  75,  87  App.  Div.  125. 

So  where  there  is  a   specified  price   per  acre,   Murphy   v.   Anderson, 

128  Minn.  106,  150  N.  W.  3S7. 
6 — Option  Contracts. 


§  211  LAW  OF  OPTION  CONTRACTS  82 

be  paid  under  the  option  was  not  stated  and  that 
the  contract  was,  therefore,  void,  but  the  Court 
ruled  the  contract  must  be  construed  as  meaning 
that  if  any  price  w^as  offered  to  the  optionor  for  the 
property  which  she  would  be  willing  to  accept,  it 
was  her  duty  to  give  the  optionee  the  privilege  of 
purchasing  at  that  price.^ 

The  same  conclusion  was  reached  in  a  Nebraska 
case  where  a  provision  in  a  lease  of  land  gave  the 
lessee  an  option  to  purchase  the  property  during 
the  term  "at  any  price  offered  by  a  third  party 
satisfactory  to"  the  lessor;^  and  in  a  Texas  case 
where  an  option  in  a  lease  gave  the  lessee  "the  pref- 
erence right  to  purchase  said  land  at  any  bona  fide 
offer  made  and  acceptable  (to  the  lessor)  by  any 
responsible  party ; '  '^  and  in  an  Illinois  case  where  a 
provision  in  a  lease  reserved  the  right  to  the  lessor 
to  sell  the  land  at  any  time  but  proAdded  that  no  sale 
should  be  made  by  him  "without  first  having  given 
said  second  party  (lessee)  the  privilege  of  purchas- 
ing said  land  upon  such  terms  and  at  the  same  price 
per  acre,  as  any  other  person  or  purchaser  might 
have  offered  therefor;"^  and  in  another  case,  from 
the  same  state,  where,  by  the  provisions  of  a  lease 

1  Pearson  v.  Home,  139  Ga.  453,  77  S.  E.  387. 

2  Harper  v.  Eunner,  85  Neb.  343,  123  N.  W.  313. 

3  Slaughter  v.  Mallet  L.  &  C.  Co.,  141  Fed.  282,  72  C.  C.  A.  430 ;  also 

Jones  V.  Moncrief-Cook  Co.,  25  Okl.  856,  108  P.  403 ;  Arnot  v.  Alex- 
ander, 44  Mo.  25,  100  Am.  Dec.  252. 

4  Hayes  v.  O'Brien,  149  111.  403,  37  N.  E.  73,  23  L.  E.  A.  555,  distin- 

guishing cases  involving  arbitration  and  valuation  clauses,  and  citing 
Homfray  v.  Fothergill,  L.  E.,  1  Eq.  576,  involving  an  agreement 
between  partners  and  providing  that  no  partner  should  sell  his 
Bhares  without  first  offering  them  to  the  other  partners  collectively, 
after  notice,  and  should  not  sell  to  a  stranger  for  less  than  £500  per 
share  more  than  the  price  offered  to  the  other  partners. 


83  TEEMS  AND  PROVISIONS  OF   CONTRACT  §  211 

the  lessee  was  given  'Hhe  first  opportunity  to  pur- 
chase said  premises  provided  he  will  pay  as  much  as 
any  other  person/"* 

In  a  Utah  case,^  the  contract  pro\dded  that  in 
consideration  of  the  sale  of  shares  of  stock,  the  sell- 
ers gave  the  buyer  '  ^  an  option  on  all  their  or  either 
of  their  interests  in  the  estate  of  JM,  deceased,  or 
refusal  to  purchase  the  same  at  a  price  as  low  as 
any  other  bona  fide  offer  for  it  or  any  portion  of  it. " 
The  Court  held  the  option  was  not  uncertain  as  to 
the  price. 

Where,  by  the  provisions  of  an  option,  the  price 
is  fixed  by  an  o:ffer  of  a  third  person,  the  offer  must 

5  Marske  v.  Willard,  169  HI.  276,  48  N.  E.  290, 

6  Cummings  v,  Nielson,  42  Utah  157,  129  P.  619,  the  court  saying  that 

by  the  terms  "refusal  to  purchase"  everybody  knows  what  is  meant, 
although  the  conditions  may  not  be  f uUy  expressed ;  what  is  meant 
thereby  is  that  if  the  owner  of  the  interest  in  question  desires  to 
sell  it  he  must  communicate  that  fact  to  the  party  holding  the 
option  to  purchase  and  thus  give  the  latter  an  opportunity  to  pur- 
chase or  refuse  to  do  so;  see,  also,  McCormick  v.  Stephany,  61 
N   J.  Eq.  208,  48  Atl.  25. 

As  to  the  meaning  of  ' '  right  of  pre-emption, ' '  see  Garcia  v.  Callender, 
125  N.  Y.  307,  26  N.  E.  283;  DeRutte  v.  Muldrow,  16  Cal.  505; 
Jackson  v.  Groat,  7  Cow.  (N.  Y.)  285. 

As  to  "first  privilege,"  see  Meyer  v.  Jenkins,  80  Ark.  208,  96  S.  W. 
991. 

First  refusal  to  renew  lease,  see  Callahan  Co.  v.  Michael,  45  Ind.  App. 
215,  90  N.  E.  642. 

First  privilege  to  buy  at  ' '  fair  market  price, ' '  Myers  v.  Metzger, 
61  N.  J.  Eq.  522,  48  Atl.  1113. 

A  "first  option"  to  purchase  any  premises  that  might  be  designated 
for  dairy  purposes  on  the  property,  is  void  for  uncertainty,  Ryan 
V.  Thomas,  (Eng.)  55  S.  Jr.  364,  on  the  theory  that  "first  option" 
is  without  definite  meaning. 

Right  of  optionee  to  discover  name  of  third  party  making  offer,  see 
Taylor  etc.  Coke  Co.  v.  Hartman,  222  Pa.  172,  70  Atl.  1001. 


§  212  LAW  OF  OPTION   CONTRACTS  84 

be  hona  fide  and  the  price  one  that  a  buyer  would 

pay.' 

Sec.  212.  TERMS  AND  PEOYISIONS  MUST 
BE  DEFINITE  AND  CERTAIN.  ''REFUS- 
ALS.^' PREFERENCE  RIGHT  TO  PUR- 
CHASE, ETC. — The  cases  presented  in  the  pre- 
ceding section  must  be  distinguished  from  those 
where  the  agreement  gives  the  optionee  the  first 
chance,  or  a  preference  right,  "to  make  a  contract. '^ 
It  will  be  noted  in  the  cases  there  cited  that  in  every 
instance  the  price  was  definitely  and  certainly  fixed 
by  the  offer  made  by  a  third  person,  or  by  the 
amount  for  which  the  optionor  was  willing  to  sell. 
A  Massachusetts  case^  is  in  point  here.  A  covenant 
in  a  lease  provided  that  "if  the  premises  are  for 

7  Manchester  S.  C.  Co.  v.  Manchester  E.  Co.,  2  Ch.  Div.  37,  70  L.  J.  Ch. 
468,  84  L.  T.  Eep.  (N.  S.)  436,  17  T.  L.  E.  410,  49  Wk\j.  Eep.  418. 
When  the  optionor  notified  the  optionee  of  an  offer  of  $20,000  by  a 
third  person  which  the  optionee  paid,  when  the  best  bona  fide  offer 
was  $10,000,  he  was  entitled  to  recover  $10,000  damages,  without 
regard  to  the  value  of  the  lease  by  which  the  option  was  given, 
Guffey  V.  Clever,  146  Pa.  548,  23  Atl.  161. 

1  Fogg  V.  Price,  145  Mass.  513,  14  N.  E.  741,  citing  Bromley  v.  Jeffereys, 
2  Vern.  415,  Prec.  Ch.  138,  24  Eng.  Eeprint  66,  involving  a  marriage 
settlement  providing  that  upon  marriage  of  plaintiff  to  daughter  of 
settlor  and  issue  of  marriage,  plaintiff  should  have  certain  lands  at 
a  certain  sum  less  than  any  other  purchaser  would  give  for  the 
same.  The  Court  refused  specific  performance  ' '  because,  if  the 
estate  was  not  to  be  sold,  but  plaintiff  was  to  have  it,  it  would 
not  be  practicable  to  know  what  a  purchaser  would  give  for  it. ' ' 
The  Court  in  Hayes  v.  O  'Brien,  149  HI.  403,  37  N.  E.  73,  23  L.  E.  A. 
555,  commenting  on  these  decisions  said  the  clear  intimation  in  both 
cases  is  that,  if  there  had  been  a  mode  provided  for  the  ascertain- 
ment of  the  price,  the  holdings  would  have  been  otherwise,  and 
further  that  according  to  the  doctrine  of  some  of  the  later  cases, 
the  difficulty  found  by  the  Court  in  the  Bromley  case  would  have  been 
overcome,  evidently  meaning  that  the  Court  itself  would  have  found 
some  way  of  fixing  the  price. 


85  TERMS   AND  PROVISIONS   OF   CONTRACT  §  212 

sale  at  any  time,  the  lessee  shall  have  the  refusal  of 
them."  This,  the  court  said,  "is  simply  an  agree- 
ment to  give  the  lessee  the  first  chance  to  make  a 
contract — an  agreement  of  sale — if  the  parties  can 
agree,  but  not  otherwise.  It  neither  fixes  the  price 
nor  provides  any  way  in  which  it  can  be  fixed." 
Though  not  expressly  set  forth  it  may  be  inferred 
that  the  bill  for  specific  performance  by  the  op- 
tionee alleged  that  the  optionor  had  made  a  sale  and 
thereby  fixed  the  price,  thus  removing  the  difficulty, 
but  the  court  answered  by  saying  that  to  enforce  the 
contract  under  such  circumstances,  it  would  have 
to  add  a  clause  which  was  not  in  the  contract,  as  the 
contract ' '  does  not  contemplate  a  sale  to  somebody 
else  as  a  mode  of  ascertaining  the  price  at  which  the 
lessor  will  sell  to  the  lessee.  .  .  .  The  Statute 
of  Frauds  remains  unsatisfied,  notwithstanding 
what  has  happened."  This  difficulty,  however, 
might  be  removed  in  those  jurisdictions  where,  by 
force  of  statute  or  judicial  interpretation,  it  is  not 
necessary  to  set  forth  the  sale  price  in  order  to  meet 
the  requirements  of  the  Statute  of  Frauds. 

An  Iowa  case-  is  much  like  the  Massachusetts 
case  above  cited.  In  the  former  the  lease  provided 
that  whenever  the  lessor  "shall  offer  the  above 
described  land  for  sale"  he  would  give  the  lessee  the 
opportunity  to  buy  the  same.  The  Court  construed 
this  to  mean  nothing  more  than ' '  an  offer  for  sale, ' ' 

2  Wolf  V.  Lodge,  159  Iowa  162,  140  N.  W.  429 ;  see,  also,  Folsom  v.  Harr, 
218  ni.  369,  75  N.  E.  987,  109  A.  S.  R.  297,  where  the  clause  in  the 
lease  was  that  if  the  lessor  concluded  to  sell,  then  the  lessee  was  ' '  to 
have  the  first  chance  to  buy  the  same,"  the  Court  holding  no  price 
was  fixed,  but  saying  if  the  clause  had  been  at  any  price  offered 
by  a  third  person,  it  would  have  been  sufiicient  under  the  decision 
in  Hayes  v.  O'Brien,  supra. 


§§  213,  214  LAW  OP   OPTION   CONTRACTS  86 

that  is,  to  put  the  land  on  the  market  and  not  as 
implying  an  offer  to  sell  at  a  fixed  price. 

Sec.  213.  TERMS  AND  PROVISIONS  MUST 
BE  DEFINITE  AND  CERTAIN.  ARBI- 
TRATION, VALUATION  AND  APPRAISAL 
CLAUSES. — So  far  as  the  subject  matter  of  this 
chapter  is  concerned,  it  is  necessary  only  to  bring 
out  that  an  executory  agreement  in  an  option  to 
purchase  property,  the  price  of  which  is  to  be  fixed 
by  arbitration  or  appraisers,  is  fatally  defective  as 
a  contract  and,  therefore,  is  not  enforceable,  where 
there  is  a  failure  or  refusal  of  such  persons  to  fix 
the  price.  ^ 

It  is  otherwise,  of  course,  where  the  contract  pro- 
vides that  the  price  shall  be  the  reasonable  or  the 
fair  valuation  of  the  property.  In  such  cases  the 
implication  is  that  the  valuation  shall  be  made  by 
the  parties  and  if  they  are  unable  to  agree,  then  the 
Court  will  make  the  valuation  itself  and  fix  the 


price 


2 


Sec.  214.  DESCRIPTION.— The  rule  here,  to 
meet  the  requirement  of  the  Statute  of  Frauds,  as 
well  as  to  make  a  complete  contract,  is  that  with 
reference  to  real  property,  it  must  be  described  in 

1  Elberton  Hdw.  Co.  v.  Hawes,  122  Ga.  158,  50  S.  E.  964;  Louise  Wer- 

ner Sawmill  Co.  v.  O'Shee,  111  La.  817,  35  So.  919. 
After  party  has  appointed  arbitrator  or  appraiser  he  can  not  withdraw 
the  appointment.  Guild  v.  Atchison  etc.  R.  Co.,  57  Kan.  70,  45  P.  82, 
57  A.  S.  R.  312,  33  L.  R.  A.  77.     See,  however,  Piggot  v.  Mason, 
1  Paige  (N.  Y.)  412. 

2  Estes  V.  Furlong,  59  HI.  298 ;  see,  generally,  Faucett  v.  Northern  Clay 

Co.,  (Wash.)  146  P.  857. 
Kaufmann  v.  Liggett,  209  Pa.  87,  58  Atl.  129,  67  L.  R.  A.  353,  103 
A.  S.  R.  988,  when  arbitrators  failed  to  agree  and  Court  fixed  the 
amount  of  rent  for  the  extended  term.    See,  also,  Sec.  1213. 


87  DESCRIPTION  OF  PROPERTY  §  214 

the  writing  so  that  it  can  be  identified  from  the 
writing  itself.  Parol  evidence  is  not  admissible  to 
supply  the  description,  but  such  evidence  is  admis- 
sible and  admissible  only  to  show  the  application  of 
the  description,  as  given,  to  the  particular  property 
intended  to  be  conveyed  by  and  described  in  the 
agreement,  the  purpose  of  such  evidence,  in  a  sense, 
being  to  exclude  all  other  property  from  the  opera- 
tion of  the  agreement.  In  other  words,  parol 
evidence  is  admissible  to  identify  the  property 
described  in  the  agreement,  but  is  not  admissible 
for  the  purpose  of  furnishing  or  supplying  a 
description.  If  the  description  given  does  not  meet 
the  requirements  of  these  rules,  the  contract  is 
void.^ 

1  Barnes  v.  Hustead,  219  Pa.  287,  68  Atl.  839;  see  Heyward  v.  Bradley, 
179  Fed.  325,  102  C.  C.  A.  509,  right  of  way;  Wadick  v.  Mace,  191 
N.  Y.  1,  83  N.  E.  571,  reversing  s.  c.  103  K  Y.  S.  998;  Bauer  v. 
Lumaghi  C.  Co.,  209  111.  316,  70  N.  E.  634,  right  of  way;  Eaton  v. 
Wilkins,  163  Cal.  742,  127  P.  71,  the  fact  the  vendor  furnished  ab- 
stract of  title  is  immaterial;  Broadway  H.  &  S.  v.  Decker,  47  Wash. 
586,  92  P.  445,  "house  No.  322  Broadway";  Tippins  v.  Phillips, 
123  Ga.  415,  51  S.  E.  410,  description  not  supplied  by  subsequent 
letter;  Statute  of  Frauds,  see  Sec.  406. 
Description  held  sufficient:  Wilkins  v.  Hardaway,  159  Ala.  565,  48  So. 
678,  dam  site  to  be  selected;  Waters  v.  Bew,  infra,  right  of  way; 
South  Florida  etc.  Co.  v.  Walden,  59  Fla.  606,  51  So.  554;  Hayes  v. 
O'Brien,  149  El.  403,  37  N.  E.  73,  23  L.  R.  A.  555;  Guyer  v.  Warren, 
175  111.  328,  51  N.  E.  580;  Brooks  v.  Wentz,  61  N.  J.  Eq.  474,  49 
Atl.  147,  reasonable  certainty  only  is  required;  Worch  v.  Woodruff, 
61  N.  Y.  Eq.  78,  47  Atl.  725;  House  v.  Jackson,  24  Ore.  89,  32  P. 
1027 ;  Smith  'a  Appeal,  69  Pa.  St.  474,  parol  evidence ;  Marske  v.  Wil- 
lard,  169  HI.  276,  48  S.  E.  290,  parol  evidence  to  supply  number  of 
lot  blank  for  which  was  left  unfilled ;  Barrett  v.  McAllister,  33  W.  Va. 
738,  11  S.  E.  220;  Pearson  v.  Home,  139  Ga.  453,  77  S.  E.  387; 
Thompson  v.  Pennebaker,  173  Fed.  849,  97  C.  C.  A.  591,  water  right ; 
Easton  v.  Thatcher,  7  Utah  99,  25  P.  728;  Joyce  v.  Tomasini,  168 
Cal.  234,  142  P.  67,  no  state  or  county;  "Our  electric  depot  and 
power  plant"  sufficient.  Western  Sec.  Co.  v.  Atlee,  (Iowa)  151  N.  W. 
56;  reservation  of  five  acres  to  be  located  by  optionor,  Rouse  v. 
Eiverton  Coal  &  Dev.  Co.,  71  Ore.  154,  142  P.  343. 


§  215  LAW  OF  OPTION  CONTRACTS  88 

The  above  general  rules  apply  to  contracts  for 
the  sale  of  personal  property  required  by  law  to  be 
in  writing.  Where  such  contracts  are  not  required 
to  be  in  writing,  it  would  seem  that  a  description  of 
the  property  intended  to  be  sold  is  sufficient,  pro- 
vided it  can  be  identified.^ 

Sec.  215.  LEGALITY  AND  VALIDITY.— In  a 

sense  all  option  contracts  are  contingent  because 
the  right  of  election  may  or  may  not  be  exercised 
within  the  time  or  upon  the  conditions  stipulated, 
but  such  contingency  does  not  render  an  option 
invalid.^  At  first  the  validity  of  such  contracts  was 
doubted  but  the  right  of  the  parties  to  make  such 
contracts  as  well  as  their  enforcibility  is  now  well 
established.^ 

1  Description  held  to  include  disputed  lot,  Mansfield  v.  Hodgdon,   147 

Mass.  304,  17  N.  E.  544;  see  Gaylord  v.  McCoy,  158  K  C.  325,  74 
S.  E.  321,  see  s.  c.  77  S.  E.  959,  particular  controls  general  de- 
scription. 

Where  both  parties  acted  under  the  lease,  Fred  Gorder  &  Son  v.  Pan- 
konin,  83  Neb,  204,  119  N.  W.  449, 

Limitation  may  not  be  added.  Waters  v,  Bew,  52  N.  J,  Eq,  787,  29 
Atl,  590, 

2  McCandlish  v.  Newman,  22  Pa.  460;  Price  v.  Atkinson,  117  Mo.  App. 

52,  94  S,  W,  816;  Ferguson  v.  MeCowan,  124  Ga.  669,  52  S.  E.  886; 
Warfield  v.  Curd,  35  Ky.  318 ;  Bricker  v.  Hughes,  4  Ind.  146. 

lAnse  La  Butte  Oil  Co.  v.  Babb,  122  La.  415,  47  So.  754;  Boyer  v. 
Nesbitt,  227  Pa.  398,  76  Atl.  103,  option  and  voting  pool;  Maryott 
V.  Swaine,  28  N.  J.  Eq.  589,  not  favored  in  equity;  Buck  v.  Walker, 
115  Minn.  239,  132  N.  W.  205,  option  in  deed  reserving  mineral 
rights;  Kerr  v.  Day,  14  Pa.  112,  53  Am.  Dec.  526;  Saxby  v.  Southern 
Land  Co.,  109  Va.  196,  63  S.  E.  423. 

2  Boyer  v.  Nesbitt,  supra;  W.  G.  Eeese  Co.  v.  House,  162  Cal.  740,  124 
P.  442;  Williams  v.  Tiedemann,  6  Mo.  App.  269;  George  etc.  Co.  v. 
Maxwell,  78  Ohio  St.  54,  84  N.  E.  595;  Cherry  v.  Smith,  22  Tenn.  19, 
39  Am.  Dec.  150;  Cummins  v.  Beavers,  103  Va.  230,  48  S.  E.  891, 
106  A.S.  R.  881;  Waterman  v.  Waterman,  27  Fed.  827;  Hanna  v. 


89  LEGALITY  AND  VALIDITY  §  215 

It  is  said  the  right  of  the  owner  of  property,  for 
a  consideration,  to  sell  the  power  to  withdraw  his 
offer  of  sale,  or  to  retract  his  promise  to  keep  such 
offer  open  for  a  limited  or  reasonable  time,  is  now 
as  well  established  as  his  right  to  sell  the  property 
itself.^ 

A  direction  in  a  will  that  if  any  residuary  legatee 
desires  to  purchase  any  of  *the  property,  he  may  do 
so  at  its  current  market  price,  at  the  time  of  testa- 
tor's death,  as  valued  by  the  executors,  and  the 
same  shall  be  charged  against  the  share  as  money 
paid  to  the  legatee,  is  legal  and  must  be  given  effect 
whatever  the  court  may  think  of  its  practical 
value/ 

An  agreement  between  owners  of  a  majority  of 
stock  of  a  corporation  that  in  the  event  of  the  death 
of  any  party,  or  his  wish  to  sell  his  stock,  the  others 
shall  have  the  privilege  of  purchasing  at  a  specified 
price  per  share,  is  not  invalid  as  a  wager  on  the  life 
of  the  party,  or  as  interfering  with  the  devolution 

Ingram,  93  Ala.  482,  9  So.  621;  Mason  v.  Decker,  72  N.  Y.  595,  28 
Am.  Eep.  190;  Dambmann  v.  Lorentz,  70  Md.  380,  17  Atl.  389,  14 
A.  S.  R.  364;  City  of  Indianapolis  v.  Gas  Co.,  144  Fed.  640,  75 
C.  C.  A.  442,  option  to  city  to  purchase  plant;  option  to  lessor.  Jack, 
son  V.  Schutz,  18  Johns.  (N.  Y.)   174,  9  Am.  Dec.  195. 

3  DeRutte  v.  Muldrow,  16  Cal.  505,  "A  man  may  as  well  bind  himself 

to  make  a  contract  as  to  bind  himself  hy  contract. ' ' 
See  Weaver  v.  Burr,  31  W.  Va.  736,  8  S.  E.  743,  3  L.  R.  A.  94 ;  Butler 
V.  Thompson,  92  U.  S.  412,  23  L.  Ed.  684;  Patterson  v.  Farmington 
St.  Ry.  Co.,  76  Conn.  628,  57  Atl.  853,  858 ;  Elliott  v.  DeLaney,  217 
Mo.  14,  116  S.  W.  494;  Peterson  v.  Chase,  115  Wis.  239,  91  N.  W. 
687;  Pittsburg  etc.  Co.  v.  Bailey,  76  Kan.  42,  90  P.  803; 
Pollock  V.  Brookover,  60  W.  Va.  75,  53  S  E.  795,  6  L.  R.  A. 
(N.  S.)  403;  Woodward  v.  Davidson,  150  Fed.  840,  (reversed  on 
other  grounds,  156  Fed.  915),  holding  an  option  "as  sacroil  as  any 
other  contract";  Simpson  v.  Sanders,  130  Ga.  265,  60  S.  E.  541. 

4  In  re  Walbridge,  198  N.  Y.  234,  91  N.  E.  590. 


§  215  LAW  OF  OPTION  CONTRACTS  90 

of  property  by  will  upon  the  death  of  its  owner. 
Nor,  is  it  invalid  as  a  restraint  on  the  right  to 
alienate  the  stock,  or  unlawful  as  a  scheme  to  con- 
trol the  corporation,^  or  because  the  optionee  is 
given  the  ^'refusal"  to  purchase  at  a  price  as  low 
as  any  other  bona  fide  offer  for  the  stock.^ 

An  option  to  a  railroad  to  purchase  timber  lands, 
given  as  an  inducement  to  locate  its  road,  is  not  void 
per  se  as  against  public  policy,^  nor,  because  it  was 
taken  as  a  speculation.^ 

An  option  expressed  upon  the  face  of  a  certificate 
of  stock  giving  to  the  corporation  the  right  of 
repurchase  upon  certain  terms,  is  valid,  when  no 
right  of  creditors  is  affected.^ 

5  Scruggs  V.  Cotterill,  73  N.  Y.  S.  882,  67  App.  Div.  583 ;  Jones  v.  Brown, 

171  Mass.  318,  50  N.  E.  648,  stock;  Fitzsimmons  v.  Lindsay,  205  Pa. 
79,  54  Atl.  488,  stock;  Boyer  v.  Nesbitt,  227  Pa.  398,  76  Atl.  103; 
In  re  Lindsay's  Estate,  210  Pa.  224,  59  Atl.  1074;  Williams  v. 
Montgomery,  148  N.  Y.  519,  43  N.  E.  57. 
Anse  La  Butte  Oil  etc.  Co.  v.  Babb,  122  La.  415,  47  So.  754,  or  a 
perpetuity,  or  contrary  to  public  policy,  or  because  no  time  was 
fixed, — oil  lease. 

Option  on  shares  of  stock  of  insurance  company  given  by  it  as  induce- 
ment to  take  out  policy,  discriminatory  and  void  under  New  York 
laws,  People  v.  Commercial  Life  Ins.  Co.,  247  HI.  92,  93  N.  E.  90. 

Moses  V.  Scott,  84  Ala.  608,  4  So.  742,  holds  that  an  agreement  similar 
to  the  one  stated  in  the  text  would  not  be  specifically  enforced. 

6  Cummings  v.  Nielson,  42  Utah  157,  129  P.  619,  nor  as  to  time  limit, 
Bendix  v.  Staver  Carriage  Co.,  174  111.  App.  589,  "first  refusal"  on 

certain  number  of  motor  cars  each  month.     See  Sec.  212. 

7  McCowen  v.  Pew,  153  Cal.  735,  96  P.  893,  21  L.  E.  A.  800,  15  Ann.  Gas. 

630. 

8  Cummins  v.  Beavers,  103  Va.  230,  48  S.  E.  891,  106  A.  S.  E.  881,  1  Ann. 

Cas.  986. 

9  Douglas  v.  Aurora  Daily  News  Co.,  160  HI.  App.  506,  and  a  person 

acquiring  such  certificate  obtains  no  greater  rights  than  the  party 
had  to  whom  it  was  originally  issued. 


91  LEGALITY  AND   VALIDITY  §  215 

A  contract  by  the  seller  of  corporate  stock  to 
repurchase  within  a  specified  time,  at  the  option  of 
the  j)urchaser,  is  valid/" 

A  contract  by  a  corporation  with  a  subscriber  to 
its  stock  which  is  issued  and  paid  for,  to  repurchase 
the  same,  at  the  subscriber's  election,  is  invalid  as 
against  the  trustee  in  bankruptcy  of  the  corpora- 
tion under  the  penal  laws  of  New  York,"  and  it  is 
held  that  a  corporation  has  no  power  to  sell  its  stock 
and  agree  with  the  purchaser  to  buy  it  back,  within 
a  given  time,  at  the  price  paid,  upon  his  election  to 

10  Smith  V.  Alexander,  128  111.  App.  507. 

11  Tichenor-Grand  Co.,  In  re,  203  Fed.  702. 

But  an  agreement  to  redeem  is  not  invalid  under  California  corpora- 
tion laws,  Schulte  v.  Boulevard  Gardens  Land  Co.,  164  Cal.  464,  129 
P.  582. 

Power  of  corporation  to  take  option  on  its  own  stock,  see  Bartlett  v. 
Fourton,  115  La.  26,  38  So.  882;  Porter  v.  Plymouth  Gold  Min.  Co., 
29  Mont.  347,  74  P.  938,  101  A.  S.  R.  569. 

A  person  need  not  own  property  in  order  to  sell  an  option  to  purchase 
it,  Burks  v.  Davies,  85  CaL  110,  24  P.  613,  20  A.  S.  R.  213. 

Validity  of  contract  affecting  real  property  should  be  determined  by 
the  law  of  the  state  in  which  it  is  situate,  Dal  v.  Fischer,  20  S.  D. 
426,  107  N.  W.  534. 

Option  taken  by  city  on  lighting  plant  is  not,  before  election,  repug- 
nant to  constitutional  inhibition  against  incurring  debt  beyond 
revenue  of  the  year,  Overall  v.  Madisonville,  125  Ky.  684,  102  S.  W. 
278,  12  L.  R.  A.  (N.  S.)  433,  31  Ky.  L.  Rep.  278. 

Validity  of  option  on  homestead  of  citizen  of  Creek  Nation,  Barnes  v. 
Stonebraker,  28  Okl.  75,  113  P.  903. 

United  States  Internal  Revenue  Stamp  Act:  In  Hughes  v.  Antill,  23 
Pa.  S.  Ct.  290,  it  was  held  that  an  option  contract  was  not  required 
to  be  stamped  under  act  of  June  13,  1898;  see  White  v.  Treat,  100 
Fed.  290. 

11  Under  the  Missouri  statute,  agreement  on  sale  of  stock  of  original 
issue,  to  repurchase,  is  ultra  vires  as  it  amounts  to  a  decrease  of  its 
capital  stock,  Wilson  v.  Torchon  etc.  Co.,  167  Mo.  App.  305,  149 
S.  W.  1156;  see,  contra,  Fremont  C.  Mfg.  Co.  v.  Thoinsen,  65  Neb. 
370,  91  N.  W.  376. 


§  216  LAW  OP  OPTION  CONTRACTS  92 

sell,  the  effect  of  which  is  to  release  him  from 
responsibility  as  a  stockholder/^ 

Sec.  216.  FUTURES.— A  contract  to  purchase 
shares  of  stock,  or  other  chattels,  as  a  mere  specula- 
tion, without  any  intention  of  receiving  and  holding 
them,  is  void  as  a  gambling  transaction  under  the 
English  statute  and  decisions.  In  America  it  is 
generally  held  that  such  contracts  are  invalid  where 
the  understanding  between  both  of  the  parties  is 
that  there  is  not  to  be  a  delivery  of  the  article  and 
that  the  diif  erence  only  between  the  contract  price 
and  the  market  price,  at  a  designated  time,  is  to  be 
paid.^ 

A  presentation  of  this  subject,  however,  does  not 
fall  within  the  scope  of  this  work,  further  than  to 
say  that  it  is  held  quite  generally  by  the  American 
courts  that  if  the  agreement  of  the  parties  is  that 
the  contract  shall  be  performed  by  delivery,  if  either 
party  shall  require  it,  in  accordance  with  its  terms, 
the  contract  is  not  a  wagering  contract  and,  there- 
fore, is  not  invalid. 

12  Boley  V.  Sonora  Development  Co.,  126  Mo.  App.  116,  103  S.  W.  975. 

1  See  Pearce  v.  Rice,  142  U.  S.  28,  35  L.  Ed.  925,  12  S.  Ct.  130 ;  Clews  v. 
Jamieson,  182  U.  S.  461,  45  L.  Ed.  1183,  21  S.  Ct.  845 ;  Pickering  v. 
Cease,  79  111.  328;  Schlee  v.  Guckenheimer,  179  HI.  593,  54  N.  B. 
302 ;  Pearce  v.  Dill,  149  Ind.  136,  48  N.  E.  788 ;  First  Nat.  Bank  v. 
Oskaloosa  Packing  Co.,  66  Iowa  41,  23  N.  W.  255,  agreement  of  both 
parties;  Billingslea  v.  Smith,  77  Md.  504,  26  Atl.  1077-;  Rumsey  v. 
Berry,  65  Me.  570;  Gregory  v.  Wendell,  39  Mich.  337,  33  Am.  Eep. 
390 ;  Mohr  v.  Miesen,  47  Minn.  228,  49  N.  W.  862 ;  Isaacs  v.  Silver- 
berg,  87  Mi.ss.  185,  39  So.  420;  Cockrell  v.  Thompson,  85  Mo.  510; 
Rudolf  v.  Winters,  7  Neb.  125;  Flagg  v.  Baldwin,  38  N.  J.  Eq.  219, 
48  Am.  Rep.  308;  Garsed  v.  Stornberger,  135  N.  C.  501,  47  S.  C.  603; 
Flagg  V.  Gilpin,  17  R.  I.  10,  19  Atl.  1084;  Dunn  v.  Bell,  85  Tenn. 
581,  4  S.  W.  41;  Wall  v.  Schneider,  59  Wis.  352,  18  N.  W.  443,  48 
Am.  Rep.  520;  Jennings  v.  Morris,  211  Pa.  600,  61  Atl.  115. 


93  MISTAKE  AND  FRAUD  §  217 

An  option  on  shares  of  stock  or  other  personal 
property  is  not  invalid  as  a  wagering  contract 
where  it  is  not  the  intention  of  both  parties  that 
delivery  shall  not  be  made  in  accordance  with  the 
terms  of  the  option.^  That  is  to  say,  the  contract  is 
not  void  when  the  transaction  is  one  of  strict  option. 
The  word  option,  however,  has  by  local  usage  come 
to  have  the  same  meaning  in  stock  transactions  as 
"future,"  but  the  distinction  between  the  two 
transactions  as  above  stated  is  well  marked.  It  is 
now  settled  law  that  an  option  contemplating  the 
delivery  of  the  article  at  the  election  of  the  optionee 
is  valid. ^ 

Sec.  217.  MISTAKE,  FRAUD,  ETC.— It  is 
essential  to  the  validity  of  any  contract  that  its 
terms  were  assented  to,  by  the  respective  parties, 
free    from    mistake,    misrepresentation,     fraud, 

2  Hooper  v.  Nuckles,  (Ala.)  39  So.  711;  Kinsey  Co.  v.  Board  of  Trade, 
198  U.  S.  236,  49  L.  Ed.  1031,  25  S.  Ct.  637;  Wiggin  v.  Federal 
S.  &  G.  Co.,  77  Conn.  507,  59  Atl.  607;  Tomblin  v.  Callen,  69  Iowa 
229,  28  N.  W.  573;  Rogers  v.  Marriott,  59  Neb.  759,  82  N.  W.  21; 
Kingsbury  v.  Kirwan,  77  N.  Y.  612;  liahn  v.  Walton,  46  Ohio  St. 
195,  20  N.  E.  203;  Union  Nat'l  Bank  v.  Carr,  155  Fed.  438,  5  Mc- 
Crary  71;  Van  Dusen-Harrington  Co.  v.  Jungleblut,  75  Minn.  298, 
77  N.  W.  970,  74  A.  S.  R.  463. 

8  See  Bates  v.  Woods,  225  HI.  126,  80  N.  E.  84,  affirming  126  HI.  App. 

180;  Osgood  v.  Skinner,  211  111.  229,  71  N.  E.  869,  affirming  s.  c. 

Ill  111.  App.  606;  Morrissey  v.  Broomal,  37  Neb.  766,  56  N.  W.  383. 
Option  to  purchase  corporate  stock  at  fixed  price  not  unlawful  under 

Illinois   Civil   Code,   Sec.  130,   Bawden  v.   Taylor,   254   HI.   464,   98 

N.  E.  941. 
Agreement  to  repurchase  under  option  on  stock,  Loeb  v.   Stern,   198 

HI.  371,  64  N.  E.  1043. 
Option  to  furnish  coal.  Standard  etc.  Co.  v.  Springfield  Coal  etc.  Co., 

146  HI.  App.   144;   George  J.  Birkel  v.   Howze,   12  Cal.   App.   645, 

108  P.  145. 
Automobile,  Bendix  v.  Staver  Carriage  Co.,  174  HI.  App.  589. 


§  217  LAW  OF  OPTION  CONTRACTS  94 

duress,  or  undue  influence,  and,  of  course,  the  par- 
ties must  have  had  mental  capacity.  This  rule 
applies  to  option  contracts.  Thus,  where  there  was 
a  misunderstanding  as  to  the  exact  acreage  covered 
by  the  option,  so  that  the  minds  of  the  parties  never 
met,  the  contract  is  uncertain  and  will  not  be 
enforced.^  Where,  by  mutual  mistake,  an  option 
clause  was  omitted  from  a  lease,  equity  will  reform 
and  then  enforce  the  instrument,  notwithstanding 
the  Statute  of  Frauds.^ 

1  Bush  V.  Merriman,  87  Mich.  260,  49  N.  W.  567 ;  Clinchfield  Coal  Co.  v. 

Powers,  107  Va.  393,  59  S.  E.  370 ;  also  McCrea  v.  Hinkson,  65  Ore. 

132,  131  P.  1025,  reversion;  see  Braun  v.  Wis.  E.  Co.,  92  Wis.  245,  66 

N.  W.  196,  application  of  rentals  on  price;  Pope  v.  Hoopes,  90  Fed. 

451,  33  C.  C.  A.  595,  description. 
Collier  v.  Eobinson,  53  Tex.  Civ.  App.  285,  129  S.  W.  389,  mistake  of 

scrivener,  in  failing  to  draft  contract  as  optional. 
Anderson  v.  Anderson,  251  111.  415,  96  N.  E.  265,  ratification. 
See  Boyden  t.  Hill,  198  Mass.  477,  85  N.  E.  413,  option  on  part  of  land 

previously  sold  to  wife. 

2  Butler  V.  Threlkeld,  117  Iowa  116,  90  N.  W.  584,  where  the  decisions 

on  this  point  are  collected. 

See  Swanston  v.  Clark,  153  Cal.  300,  95  P.  1117,  removal  of  improve- 
ments, rescission. 

Meek  v.  Hurst,  223  Mo.  688,  122  S.  W.  1022,  mistake  of  scrivener, 
reformation. 

Murphy  v.  Hussey,  117  La.  390,  41  So.  692,  option  in  lease,  duty  to 
read. 

That  a  pure  mistake  of  fact  will  sometimes  defeat  specific  perform- 
ance, see  Krah  v.  Wassmer,  75  N.  J.  Eq.  109,  71  Atl.  404. 

Thomas  v.  Gottlieb  etc.  Co.,  102  Md.  417,  62  Atl.  633,  legal  effect  of 
contract;  also  Carter  v.  Love,  209  HI.  310,  69  N.  E.  85;  Hazelton 
v.  LeDuc,  (D.  C.)  19  App.  Cas.  379. 

Hopwood  V.  McClausland,  120  Iowa  218,  94  N.  W.  469,  legal  effect, 
reformed. 

Option  to  purchase  not  implied  in  lease  from  circumstances  in  absence 
of  fraud  or  mistake,  Abbott  v.  76  Land  Co.,  101  Cal.  567,  36  P.  1, 
53  P.  445, 


95  FRAUD  AND   MISREPRESENTATION  §  217 

An  option  contract  secured  through  misrepresen- 
tation and  fraud  will  not  be  enforced,  nor  will  it  be 
permitted  to  form  the  basis  of  a  suit  for  damages 
for  breach.^  But  whether  a  particular  statement  is 
a  misrepresentation,  or  a  particular  act  fraudulent, 
must  be  determined  in  accordance  with  the  rules  on 
the  subject  applicable  to  contracts  generally.  Thus, 
a  contract  glaring  an  option  to  purchase  mining 
property,  can  not  be  rescinded  for  fraud  because  of 
erroneous  statements  made  by  the  seller  as  to  the 
quantity  of  ore  on  the  property,  or  with  reference 
to  the  title,  when  the  purchasers  were  to  take  pos- 
session and  operate  the  property  for  several  months 
before  the  option  expired,  the  statements  being 
made  in  good  faith  and  expressing  the  honest  opin- 
ion of  the  sellers,  who  had  little  knowledge  of  prac- 
tical mining/ 

That  an  option  is  taken  as  a  speculation  does  not 
render  it  fraudulent.^  A  representation  to  a  pur- 
chaser by  a  person  having  an  option  on  the  land  that 
he  owned  it,  is  immaterial  and  hence  not  actionable 

3  Colbert  v.  Shepherd,  89  Va.  401,  16  S.  E.  246;  Boyden  v.  Hill,  198  Mass. 

477,  85  N.  E.  413,  mere  mental  weakness  not  sufficient  to  avoid. 

Vendor  will  not  be  relieved  from  a  contract  of  sale  merely  because 
he  thought  it  was  an  option,  Abel  v.  Gill,  95  Neb.  279,  145  N.  W. 
637;  Lenman  v.  Jones,  222  U.  S.  51,  56  L.  Ed.  89,  32  S.  Ct.  18. 

Otherwise  where  through  fraud  of  optionee  deed  of  conveyance  is  exe- 
cuted instead  of  an  option,  Gillis  v.  Arringdale,  135  N.  C.  295,  47 
S.  E.  429. 

4  Winter  v.  Bostwick,  172  Fed.  285. 

Frank  v.  Schnuettgen,  187  Fed.  515,  109  C.  C.  A.  281,  statements  by 
optionor  of  contents  of  option  are  binding  on  him  when  optionee 
can  not  read,  etc.,  language  of  option. 

B  Cummins  v.  Beavers,  103  Va.  230,  48  S.  E.   891,  106  A.   S.  R.   881; 
Saxby  v.  So.  L.  Co.,  109  Va.  196,  63  S.  E.  423. 


§  218  LAW  OF  OPTION  CONTRACTS  96 

fraud. ^  Statement  by  an  optionor  that  a  prior 
option  had  expired  when  both  vendor  and  vendee 
knew  the  true  facts,  is  the  expression  of  an  opinion 
and  not  a  fraudulent  misrepresentation/  That 
a  tenant,  in  obtaining  a  lease,  simply  acted  for 
another  is  not  fraudulent,^  and,  therefore,  does  not 
prevent  him  from  suing  for  breach  of  contract  to 
convey,  on  exercise  of  the  option.^ 

Sec.  218.  TIME  LIMIT.  PERPETUITIES.— 

The  rule  against  perpetuities  forbids  the  creation 
of  future  interests  in  property,  real  or  personal,  if 
the  vesting  of  the  property  is  made  dependent  upon 
a  contingency  which  will  not  be  determined  within 
the  period  fixed  by  law  for  the  creation  of  future 
estates.  This  is  a  brief  statement  of  the  common 
law  rule,  and  it  would  seem  it  is  directed  solely 
against  the  vesting  of  property  at  a  remote  period 
of  time. 

In  several  of  the  states,  following  those  of  New 
York,  statutes  have  been  enacted  providing,  in  sub- 
stance, that  the  absolute  power  of  alienation  may 

6  Saxby  v.  So.  L.  Co.,  109  Va.  196,  63  S.  E.  423. 

But  where  plaintiff  obtains  an  option  to  purchase  property  for  $2,000 
and  represented  to  defendant  to  induce  him  to  purchase,  that  the 
property  cost  $2,500  and  that  defendant  would  have  to  pay  only  the 
amount  demanded  by  the  owner  and  the  parties  dealt  with  the 
property  as  belonging  to  the  owner,  plaintiff  could  not  recover  in 
excess  of  $2,000,  McGough  v,  Hopkins,  172  Mich.  580,  138  N.  W.  210. 

Liability  of  promoters  of  corporation  in  case  where  stock  is  issued 
to  them  for  optioned  property,  Hayward  v.  Leeson,  176  Mass.  310, 
57  N.  E.  656,  49  L.  K.  A.  725. 

TEheinganz  v.  Smith,  161  Cal.  362,  119  P.  494;   Chesbrough  v.  Vizard 
Inv.  Co.,  156  Ky.  149,  160  S.  W.  725,  prior  contract  not  binding. 
As  to  "  trade  talk, ' '  see  Saxby  v.  So.  L.  Co.,  supra. 

8  Walshe  v.  Endom,  129  La.  148,  55  So.  744. 


97  PERPETUITIES  §  219 

not  be  suspended  by  any  limitation  or  condition 
whatever  for  a  longer  period  than  during  the  lives, 
or  a  certain  number  of  lives,  in  being  at  the  time  of 
the  creation  of  the  limitation  or  condition,  except 
in  one  or  two  enumerated  cases  not  material  here/ 

The  test  under  the  common  law  rule,  as  it  would 
seem,  is  whether  the  future  contingent  interest  is 
too  remote,  and  under  the  statutes  whether  the 
power  of  alienation  is  susj)ended,  keeping  in  mind 
that  the  absolute  power  of  alienation  is  suspended 
when  there  are  no  persons  in  being  by  whom  an 
absolute  fee  in  possession  can  be  conveyed,  that  is, 
a  fee  neither  defeasible  nor  conditional.^ 


Sec.  219.  PERPETUITIES.  COMMON  LAW 
RULE.  THE  GOMM  DECISION.— The  leading 
English  decision  is  London,  etc.  R.  Co.  v.  Gomm.^ 

1  N.  Y.  Laws,  1896,  Chap.  547,  See.  32 ;   Chap.  417,  Sec.  12 ;   Cal.  Civil 

Code,  Sees.  715-726 ;  Mich.  Comp.  Laws,  Sec.  8806 ;  Minn.  Eev.  Laws, 
Sec.  3213;  Wis.  Anno.  St.,  Sec.  2047;  N.  D.  Rev.  Codes,  1895",  Sees. 
3275-3464;  S.  D.  Anno.  St.,  1901,  Sees.  3587-3786;  Idaho  Civ.  Code, 
Sees.  2364,  2367-91;  Iowa  Code,  1897,  Sec.  2901;  Burn's  Anno.  St.  of 
Ind.,  1901;  Sees.  3382-3,  8133-4;  Ky.  St.,  1903,  Sec.  2360. 

2  See  Sec.  221. 

The  Kentucky  Court  holds  the  test  is  the  same  both  at  common  law  and 
under  the  Kentucky  statute,  to-wit :  whether  the  power  of  aliena- 
tion may  be  extended  beyond  the  permitted  period,  Tyler  v.  Fidelity 
&  C.  Tr.  Co.,  158  Ky.  280,  164  S.  W.  939. 

1  London  etc.  R.  Co.  v.  Gomm,  20  Ch.  Div.  562,  51  L.  J.  Ch.  530,  46 
L.  T.  Rep.  (N.  S.)  449,  30  Wkly.  Rep.  620  (1880). 

The  Gomm  decision  overruled  Birmingham  Canal  Co.  v.  Cartwright, 
L.  R.,  11  Ch.  Div.  421,  (1879)  which  involved  an  option  to  purchase 
certain  mines  if  the  owner  should,  at  any  time,  desire  to  sell  them. 
In  the  latter  case.  Fry,  J.,  said :  ' '  The  next  question  arises  upon 
the  terms  of  the  covenant  giving  the  right  of  pre-emption  (option), 
— whether  that  right  is  obnoxious  to  the  rule  against  perpetuities. 
In  my  opinion  the  covenant  is  not  in  any  way  liable  to  that  objec- 

7 — Option  Contracts. 


§  219  LAW  OP  OPTION   CONTRACTS  98 

By  deed  dated  August  1865,  plaintiff  conveyed  cer- 
tain land  (no  longer  required  for  railroad  uses)  to 
G  P  in  fee  for  £1000,  and  G  P  covenanted  with  the 
company  that  he,  his  heirs  and  assigns,  would,  at 
any  time  thereafter,  whenever  the  land  might  be 
required  for  the  railway  or  works  of  the  company 
and  whenever  requested  by  the  company,  on  six 
months'  notice,  and  upon  receiving  £1000,  reconvey 
the  land  to  the  company.  In  1879  the  defendant 
purchased  the  land  from  Gr  P  with  notice  of  the 

tion.  I  think  that  whenever  the  right  or  interest  is  presently  vested 
in  A  and  his  heirs,  although  it  may  not  arise  until  the  happening 
of  some  contingency  which  may  not  take  effect  within  the  period 
defined  by  the  rule  against  perpetuities,  such  right  or  interest  is  not 
obnoxious  to  that  rule  and  for  this  reason:  the  rule  is  aimed  at 
preventing  the  suspension  of  the  power  of  dealing  with  property, 
the  alienation  of  the  land  or  other  property.  But  when  there  is  a 
present  right  of  that  sort,  although  its  exercise  may  depend  upon  a 
future  contingency,  and  the  right  is  vested  in  an  ascertained  person 
or  persons,  that  person  or  persons,  concurring  with  the  person  who  is 
subject  to  the  right,  can  make  a  perfectly  good  title  to  the  prop- 
erty. The  total  interest  in  the  land,  so  to  speak,  is  divided  between 
the  covenantor  and  the  covenantee  and  they  can  together,  at  any 
time,  alienate  the  land  absolutely. ' ' 
1  The  Gomm  decision  was  followed  in  the  later  ease  of  Woodall  v. 
Clifton,  2  Ch.  257  (1905),  where  Warrington,  J.,  said  the  Gomm 
decision  "is  in  some  ways  a  puzzling  case."  He  then  defined  a 
perpetuity  thus:  "A  perpetuity  is  a  future  limitation  restraining 
the  owner  of  the  estate  from  alienating  the  fee  simple  of  the  prop- 
erty discharged  of  such  future  use  or  estate  before  the  event  is 
determined. "  The  Woodall  case  involved  a  lease  for  ninety-nine 
years,  with  option  to  purchase,  at  any  time  during  the  term.  The 
option  ran  to  the  optionee,  his  heirs,  and  assigns. 

In  MacKenzie  v.  Childers,  L.  E.,  43  Ch.  Div.  265,  279,  (1889)  it  is  said 
the  doctrine  of  the  Gomm  decision  is  "entirely  novel." 

The  Gomm  decision  was  also  followed  in  Worthington  Corporation  v. 
Heather,  2  Ch.  Div.  532,  (1906)  which  involved  a  lease  for  thirty 
years  with  option  to  lessee,  his  heirs,  etc.,  to  purchase.  The  fact 
that  the  option  was  given  for  charitable  purposes  was  held  imma- 
terial on  the  theory  that  the  limitation  and  not  the  contract  was 
void.  Optionee-lessee  elected  to  recover  damages  for  breach  of 
covenant  to  convey. 


99  PERPETUITIES  §  220 

above  covenant.  In  1880  the  company  gave  defen- 
dant notice  to  reconvey  the  land  and  upon  his 
refusal  to  do  so,  brought  suit  for  specific  perform- 
ance of  the  covenant.  The  trial  court  held  the  sale 
to  G  P  was  not  conditional  but  absolute  with  a 
personal  covenant  on  the  part  of  G  P,  his  heirs  and 
assigns,  to  resell  and  that  the  covenant  did  not 
create  any  estate  or  interest  in  the  land  and,  there- 
fore, was  not  obnoxious  to  the  rule  against  perpe- 
tuities. 

On  appeal  it  was  held  the  covenant  in  the  deed  to 
reconvey  reserved  to  the  company  an  executory 
interest  in  the  land  to  arise  on  an  event  which  might 
occur  after  the  period  allowed  by  the  rules  as  to 
remoteness,  and  was,  therefore,  void  on  that  ground. 

Sec.  220.  PERPETUITIES,  CONTINUED. 
THE  STARCHER  BROTHERS  DECISIONS.— 
The  Gomm  decision  was  followed  by  the  Supreme 
Court  of  Appeals  of  West  Virginia  in  the  two 
Starcher  Brothers  cases.^  The  facts  in  the  two 
cases  are  the  same.  The  option  contract  acknowl- 
edged a  consideration  of  $10  paid  down  and  was 
conditioned  on  the  optionees'  election  to  take  and 
accept  the  land  on  or  before  April  5,  1903,  and,  in 
that  event,  that  they  would  pay  therefor  at  the  rate 
of  $6  per  acre.  The  contract  also  provided  that  the 

1  starcher  Bros.  v.  Duty,  61  W.  Va.  373,  56  S.  E.  524,  123  A.  S.  R.  990, 
9  L.  R.  A.  (N.  S.)  913. 
Starcher  Bros.  v.  Duty,  61  W.  Va.  371,  56  S.  E.  527.  The  Court  dis- 
tinguishes an  option  contract  from  a  covenant  in  a  lease  for  per- 
petual renewal,  saying  that  the  latter  is  one  which  runs  with  the 
land  and  is  without  restraint  upon  the  right  of  alienation  by  the 
lessor  of  the  property  subject  to  the  lease.  As  to  the  last  point,  see 
Sec.  223. 


§  220  LAW  OF  OPTION  CONTRACTS  100 

optionees  might,  prior  to  tlie  5tli  day  of  April,  1903, 
pay  to  the  optionors,  or  deposit  in  a  certain  bank 
to  their  credit,  the  sum  of  $10  '^  which  shall  consti- 
tute and  be  in  full  consideration  for  an  extension  of 
this  option  and  agreement  for  the  period  of  one 
year  from  said  last  mentioned  date,  and  upon  pay- 
ment therefor  this  contract  and  option  shall  be  so 
extended."  Following  this  was  another  provision 
giving  the  optionees  the  right  to  extend  the  option 
agreement  from  year  to  year  upon  the  payment  of 
the  sum  of  $10  annually,  and  providing  that  the 
stipulation  should  extend  to  the  heirs,  assigns, 
executors  and  administrators  of  the  parties. 

The  optionees  deposited  the  $10  annually  for  the 
years  ending  April  5,  1905,  and  prior  to  this  date 
gave  notice  of  their  election  to  purchase  the  land. 
It  was  argued  the  clause  providing  for  the  annual 
extension  of  the  option  right  offended  the  rule 
against  perpetuities  and  the  Supreme  Court  of 
Appeals  so  held,  quoting  the  Gomm  decision  "that 
whenever  a  contract  raises  an  equitable  right  in 
property  which  the  obligee  can  enforce  in  a  court 
of  chancery,  by  a  decree  of  specific  performance, 
such  equitable  right  is  subject  to  the  rule  against 
perpetuities." 

The  Court  further  remarked  the  mere  fact  that  a 
contingent  interest  may  be  released  by  persons  in 
being  and  that  a  good  title  may  thus  be  made,  is  not 
enough  to  take  the  case  out  of  the  rule ;  that  the  rule 
was  aimed  not  only  against  restraints  upon  the 
alienation  of  present  interests  but  was  also  directed 
against  the  creation  of  future  interests  in  property ; 
that  the  option  contract,  not  containing  some  term 
of  limitation  requiring  the  optionee  to  exercise  the 


101  PERPETUITIES  §  220 

right  to  take  the  property  within  a  reasonable  time, 
not  too  remote,  was  void  and  void  from  its  incep- 
tion ;  that  the  option  contract  provided  the  option 
might  be  extended  annually  to  an  indefinite  i^eriod, 
and,  therefore,  to  a  time  beyond  which  the  rule 
against  perpetuities  will  allow.^ 

In  a  subsequent  case,^  a  deed  of  land  reserved  to 
the  grantor  "at  any  time  thereafter"  or  within  99 
years  from  the  date  of  the  deed,  that  he  should  pay 
or  tender  to  the  grantee  a  certain  smn  per  acre  for 
the  land  conveyed,  the  right  to  a  conveyance  of  cer- 
tain mineral  rights  to  the  land,  the  deed  binding  the 
heirs  and  assigns  of  the  respective  parties.  Follow- 
ing the  cases  above  cited,  the  Court  held  the  reser- 
vation partook  of  the  nature  of  an  executory 
limitation,  vesting  no  interest  in  the  land  and  con- 
stituting an  irrevocable  restraint  upon  alienation 
of  the  land,  even  though  the  option  was  in  form  a 
reservation  of  a  right  to  the  grantor  in  the  deed  by 
which  the  land  was  conveyed. 

2  The  common-law  rule  being  that  to  be  valid,  the  limitations  must  be  so 

made  that  the  estate  not  only  may,  but  must  vest  within  the  pre- 
scribed period.  Hanley  v.  Kansas  &  T.  Coal  Co.,  110  Fed.  62;  An- 
drews V.  Lincoln,  95  Me.  541,  50  Atl.  898,  56  L.  E.  A.  103 ;  Donohue 
T.  McNichol,  61  Pa.  73;  Loyd  v.  Loyd's  Ex'r,  102  Va.  519,  46  S.  E. 
687;  Winsor  v.  Mills,  157  Mass.  362,  32  N".  E.  352;  Schettler  v. 
Smith,  41  N.  Y.  328 ;  Buck  v.  Walker,  115  Minn.  239,  132  N.  W.  205. 
It  will  be  observed  that  Fry,  J.,  in  the  Canal  case  rested  his  decision 
on  the  point  that  the  option  right  was  ' '  presently ' '  vested.  The 
Gomm  decision  says  the  right  or  interest  is  "executory"  to  arise 
on  an  event  which  might  not  happen  within  the  lawful  period.  The 
latter  was  also  the  view  of  the  Court  in  Barton  v.  Thaw,  (Pa.)  92 
Atl.  312. 

The  fact  that  some  of  the  interested  parties  are  minors  does  not 
bring  the  case  within  the  rule.  In  re  Campbell's  Estate,  149  Cal. 
712,  87  P.  573. 

3  Woodall  V.  Bruen,  (W.  Va.)  85  S.  E.  170. 


§  220  LAW  OF  OPTION  CONTRACTS  102 

Speaking  of  the  rule,  and  the  two  lines  of  authori- 
ties, the  Court  said : ' '  The  rule  itself,  as  well  as  the 
divergent  interpretations  thereof,  rests  upon  con- 
siderations of  public  policy,  undue  restraint  upon 
alienation  of  property  being  regarded  as  highly 
detrimental  to  the  interests  of  society  in  general. 
According  to  one  view,  the  general  welfare  in  this 
respect  is  sufficiently  protected  by  inhibition  of  sus- 
pension of  the  absolute  power  of  alienation,  or 
absolute  suspension  of  such  power,  for  an  unreason- 
able period  of  time.  Such  suspension  occurs  when 
the  situation  of  the  property  is  such  that  nobody 
can  sell  or  convey  it  until  the  lapse  of  that  period. 
But  for  the  rule,  such  condition  could  be  created. 
It  is  unnecessary  here  to  illustrate  the  methods  of 
creating  them.  In  the  opinion  of  other  jurists  the 
rule  goes  further  and  condemns  limitations  that 
clog  alienation  and  unduly  restrain  it  for  an  unrea- 
sonable length  of  time,  without  absolute  prevention 
thereof.  So  interpreted,  it  forbids  practically  all 
executory  limitations,  whether  by  will  or  deed,  that 
do  not  vest  within  the  time  arbitrarily  prescribed  as 
being  reasonable,  a  life  or  lives  in  being  and  21 
years  and  10  months ;  and,  even  though  the  holders 
of  the  respective  rights  have  it  in  their  power  to 
combine  them  to  put  the  property  on  the  market, 
the  restraint  upon  alienation  is  deemed  to  be  incom- 
patible with  the  welfare  of  society  in  general.  Such 
was  the  consideration  in  the  Starcher  and  Duty 
cases.  The  rule  is  thus  applied  in  England,  Massa- 
chusetts, Maine,  Pennsylvania,  New  Jersey,  and 
Illinois,  and  the  interpretation  has  the  approval  of 
Prof.  Gray,  author  of  a  leading  work  on  the  sub- 
ject." 


103  PERPETUITIES  §  221 

Sec.  221.  PERPETUITIES,  CONTINUED. 
RULE  UNDER  STATUTES  PROVIDING 
AGAINST  SUSPENSION  OF  POWER  OF 
ALIENATION.— Under  statutes  like  those  of  New 
York/  which  have  been  quite  extensively  copied  by 
other  states,  the  test  is  whether  there  are  persons  in 
being  who  unitedly  by  one  instrument,  or  by  several 
instruments,  of  conveyance,  can  convey  a  fee  in 
possession  to  the  land.^  If  there  are  such  persons 
in  being  the  rule  is  not  offended.  This  is  in  accord 
with  the  reasoning  of  the  Supreme  Court  of  Cali- 
fornia in  the  Blakeman  decision,  which  involved  an 
option  on  land,^  and  is  also  in  accord  with  the  gen- 
eral rule  on  the  subject  as  established  by  the  Ameri- 

1  See  Sec.  208,  note  1. 

The  New  York  statute  provides  that  every  future  estate  shall  be  void 
in  its  creation  which  shall  suspend  the  absolute  power  of  alienation 
by  any  limitation  or  condition  whatever,  for  a  longer  period  than 
during  the  continuance  of  not  more  than  two  lives  in  being  at  the 
creation  of  the  estate,  except  that  a  contingent  remainder  in  fee 
may  be  created  on  a  prior  remainder  in  fee,  etc.  And  the  statute 
defines  what  is  the  absolute  suspension  of  the  power  of  alienation 
by  providing  that  it  is  suspended  when  there  are  no  persons  in 
being  by  whom  an  absolute  fee  in  possession  can  be  conveyed. 

2  This   rule  also   applies  to   personal   property   when   the   statute   covers 

that  kind  of  property.  The  test  under  the  statute  is  not  whether 
the  interest  is  vested  (which  is  the  test  at  common  law) ,  but  whether 
there  are  persons  in  being  who  unitedly  or  by  several  instruments 
can  convey  an  absolute  fee  in  possession;  for  under  the  statute  an 
interest  may  be  vested  and  still  be  within  the  statute. 

8  Blakeman  v.  Miller,  136  Cal.  138,  68  P.  587,  89  A.  S.  R.  120,  the  Court 
points  out  that  the  Gomm  decision  (Sec.  219,  supra)  is  not  incon- 
sistent with  the  rule  declared  in  that  "all  that  was  held  was  that 
the  option  to  purchase  at  any  time  in  the  future  beyond  twenty-one 
years  was  void  for  remoteness"  (twenty-one  years  absolute  being 
the  period  when  the  limitation  is  not  based  on  lives),  Andrews  v. 
Lincoln,  95  Me.  541,  50  Atl.  898,  56  L.  R.  A.  103.  See  Hoadley  v. 
Beardsley,  (Conn.)  93  Atl.  535;  Buck  v.  Walker,  115  Minn.  239,  132 
N.  W.  205,  option. 


§  221  LAW  OF  OPTION  CONTRACTS  104 

can  courts,*  under  the  statutes  referred  to,  and  is 
also  in  accord  with  the  English  decisions  prior  to 
the  Gomm  decision.^ 

Justice  Marshall  of  the  Supreme  Court  of  Wis- 
consin*^ said: 

''Before  the  origin  of  the  system  in  New  York,  as 
to  real  estate,  these  two  ideas  received  attention  in 
the  English  decisions:  First,  no  future  estate  in 
land  which  can  be  released  is  too  remote,  as  regards 
the  land  itself,  to  offend  against  the  law  prohibiting 
perpetuities ;  second,  a  future  interest  in  land  is  too 
remote  notwithstanding  the  title  thereto  is  not  tied 
up  so  as  to  prevent  dealing  therewith  if  it  be  in  a 
trust  required  to  be  carried  beyond  the  period  of 
limitation  fixed  by  law,  as  regards  perpetuities  in 
property.  In  Gooch  v.  Gooch,  3  De  G.  M.  &  G.  366, 
381,  the  lord  chancellor,  giving  the  test  to  be  applied 
at  connnon  law  in  determining  whether  the  power 
of  alienation  is  unduly  suspended,  said  that  the  sole 
test  was  whether  there  were  persons  in  being  by 
whom  a  fee  could  be  conveyed.  Gilbertson  v.  Rich- 
ards, 4  Hurl.  &  N.  277 ;  Canal  Co.  v.  Cartwright,  11 
Ch.  Div.  421 ;  and  Avern  v.  Lloyd,  L.  R.  5  Eq.  383, 

4  Branson  v.  Bailey,  246  111.  490,  92  N.  E.  940;  Hubbel  Trust,  In  re, 
135  Iowa  637,  113  N.  W.  512,  13  L.  E.  A.  (N.  S.)  496;  Andrews  v. 
Lincoln,  95  Me.  541,  50  Atl.  898,  56  L.  R.  A.  103,  rule  does  not  apply 
to  vested  estates;  Torpy  v.  Betts,  123  Mich.  239,  81  N.  W.  1094; 
Stevens  v.  Annex  Realty  Co.,  173  Mo.  511,  73  S.  W.  505;  Williams 
V.  Montgomery,  148  N.  Y.  519,  43  N.  E.  57;  Thieler  v.  Rayner, 
190  N.  Y.  546,  83  N.  E.  1133,  affirming  100  N.  Y.  S.  993,  115 
App.  Div.  626. 

6  Birmingham  Canal  Co.  v.  Cartwright,  L.  R.,  11  Ch.  Div.  421;  Tulk  v. 
Moxhay,  2  Ph.  774,  41  Eng.  Reprint  1143,  15  Eng.  Rul.  Gas.  254; 
see  Winsor  v.  Mills,  157  Mass.  362,  32  N.  E.  352. 

e  Becker  v.  Chester,  115  Wis.  90,  91  N.  W.  87,  650. 

Voting  pool  on  shares  of  stock  and  option  to  purchase,  see  Sec.  215. 


105  PERPETUITIES  §  222 

are  to  the  same  effect.  That  doctrine  can  be  easily 
traced  back  in  the  judicial  history  of  England  to 
Washborn  v.  Dowues,  1  Cas.  Ch.  213,  decided  in 
1672,  where  this  language  was  used : 

"  'A  perpetuity  is  where,  if  all  that  have  interest 
join,  and  yet  can  not  bar  or  pass  the  estate.  But  if 
the  concurrence  of  all  having  the  estate  tail  may  be 
barred,  it  is  no  perpetuity.'  In  Railroad  Co.  v. 
Gomm,  supra,  after  reviewing  the  whole  field  of 
judicial  history  from  the  time  of  Washborn  v. 
Downes,  the  conclusion  was  reached  that  decisions 
based  thereon  were  contrary  to  the  true  policy  of 
the  law  and  wrong ;  that  restraints  upon  alienation 
are  aimed  primarily  at  the  prevention  of  perpetui- 
ties ;  that  a  trust  in  real  estate,  tying  up  the  estate 
itself,  may  be  within  the  limitations  of  the  rule 
against  perpetuities,  notwithstanding  there  are  per- 
sons in  being  competent  to  convey  a  full  title  in 
possession  to  the  realty.  When  the  view  which  finds 
its  first  definite  expression  in  Washborn  v.  Downes 
(that  so  long  as  there  are  persons  in  being,  no  mat- 
ter how  numerous  they  may  be,  who  by  joining  can 
convey  a  full  title  in  possession  to  the  realty,  there 
is  no  offense  against  the  doctrine  of  perpetuities) 
was  supposed  to  be  the  law  of  England,  the  statutes 
of  New  York  were  framed ;  and  that  idea  was  made 
a  part  thereof  so  plainly  that  there  is  no  good  rea- 
son for  going  astray  in  respect  thereto." 

Sec.  222.  PERPETUITIES.  RULE  WHERE- 
BY NO  TIME  IS  EXPRESSLY  FIXED  BY 
THE  OPTION.— The  cases  we  have  been  consider- 
ing are  those  in  which  the  option  contract  expressly 


§  222  LAW  OF  OPTION  CONTRACTS  106 

fixed  the  time  limit  of  the  option  right.  There  are 
decisions  holding  that  an  option  contract  without 
time  limit  is  void.^  But  such  holding  is  against  the 
weight  of  authority  either  on  the  ground  of  indefi- 
niteness  or  as  offending  the  rule  against  perpetui- 
ties. According  to  the  weight  of  judicial  authority, 
where  no  time  limit  is  expressly  fixed  by  the  option 
contract  for  the  exercise  of  the  option,  the  law  fixes 
a  reasonable  time,  and  what  length  of  time  is  rea- 
sonable in  a  particular  case,  is  a  question  of  fact,  or 
of  law,  depending  on  the  circumstances.^ 

1  Trogden  v.  Williams,  144  N.  C.  192,  56  S.  E.  865,  10  L.  R.  A.  (N.  S.) 

867;  see  Broadway  H.  &  S.  v.  Decker,  47  Wash.  586,  92  P.  445. 

An  option  given  providing  that  the  purchaser  of  bonds  could  * '  at  any 
time"  return  them  and  receive  back  the  price  paid,  does  not  import 
a  perpetuity.  The  law  fixes  a  reasonable  time.  Brooks  v.  Trustee  Co., 
76  Wash.  589,  136  P.  1152. 

See  Schroeder  v.  Gemeinder,  10  Nev.  355,  option  to  purchase  land 
premises  "at  any  time"  lessee  desired  to  sell. 

See  Pearson  v.  Home,  139  Ga.  453,  77  S.  E.  387,  option  to  purchase 
when  optionor  decided  to  sell,  and  Stay  v.  Tennille,  159  Ala.  514,  49 
So.  238,  holding  a  ' '  first  refusal ' '  and  also  agreement  to  sell,  on 
death  of  any  one  of  the  several  owners  of  stock,  indefinite  as  to 
time,  but  implying  that  if  complaint  had  alleged  an  offer,  etc.,  it 
would  have  been  sufficient. 

2  See  Sees.  856,  857;  also  Cummings  v.  Nielson,  42  Utah  157,  129  P.  619; 

Anse  LaButte  Oil  Co.  v.  Babb,  122  La.  415,  47  So.  754. 
Power  of  sale  to  an  executor  in  a  will  without  time  restriction  does  not 

suspend  power  of  alienation,  PitzGerald  v.  City  of  Big  Rapids,  123 

Mich.  281,  82  N.  W.  56. 
See,  also.  Holmes  v.  Walter,  118  Wis.  409,  95  N.  W.  380,  62  L.  R.  A. 

986,   holding  power   of  alienation  not   suspended   when  trustee   has 

absolute  power  to  sell  and  beneficiaries  are  all  in  being  and  can,  by 

uniting  convey  the  whole  title. 
Also   not   suspended   when   trustee   is   by   consent   of   testator's   adult 

children  empowered  to  sell,  Stoiber  v.  Stoiber,  57  N.  Y.  S.  916,  40 

App.  Div.   156;   also   In  re  Cooper's  Estate,   150  Pa.  576,   24  Atl. 

1057,  30  A.  S.  R.  829. 
Power  of  trustees  in  deed  of  trust  to  sell  at  their  ' '  option ' '  does  not 

suspend  power  of  alienation,  even  if  never  exercised,  Thatcher  v.  St. 

Andrews  Church,  37  Mich.  264. 


107  PERPETUITIES  §  223 

An  option  fixing  the  time  limit  as  at  any  time 
within  twenty  years,  but  within  the  term  of  a  lease, 
is  not  void  as  being  a  suspension  of  the  power  of 
alienation.^ 

Where,  in  a  contract  between  the  owner  of  coal 
lands  and  a  railway  company,  the  owner  agreed  to 
develop  the  mines  on  his  land  and  the  company 
agreed  to  purchase  the  coal  produced,  at  the  ruling 
prices,  not  less  than  100,000  tons  per  year,  although 
the  contract  fixed  no  time  it  was  to  continue  in 
force,  the  contract  was,  by  implication,  to  terminate 
when  the  owner's  coal  became  exhausted.^ 

Sec.  223.  PERPETUITIES.  LEASES  AND 
LIKE  INSTRUMENTS.— A  covenant  in  a  lease 
to  renew  indefinitely  at  the  option  of  the  lessee 
creates  a  perpetuity.^  It  does  not  appear  in  the 
decision  last  cited  whether  the  covenant  ran  to  the 
lessee,  ''his  heirs  and  assigns."  In  those  jurisdic- 

2  See,  as  to  contract  for  deposit  of  stock  with  trust  company  by  stock- 

holder for  six  months  not  to  be  withdrawn  without  the  consent  of 
each  stockholder,  Williams  v.  Montgomery,  148  N.  Y.  519,  43 
N.  E.  57. 

3  Blakeman  v.  Miller,  136  Cal.  138,  68  P.  587,  89  A.  S.  R.  120. 

4  McKell  V.  Chesapeake  etc.  R.  Co.,  186  Fed.  39,  108  C.  C.  A.  141,  affirm- 

ing 175  Fed.  321,  99  C.  C.  A.  109;  Anse  LaButte  Oil  etc.  Co.  v. 
Babb,  122  La.  415,  47  So.  754,  mineral  lease  and  option. 
Equity  will  not  construe  doubtful  language  in  a  contract  so  as  to 
defeat  the  contract  as  in  violation  of  the  law  against  perpetuities, 
when  it  is  susceptible  of  a  construction  which  will  validate  the  con- 
tract. Rice  V.  Lincoln  etc.  R.  Co.,  88  Neb.  307,  129  N.  W.  425. 

1  Morrison  v.  Rossignol,  5  Cal.  65. 

A  different  conclusion  was  reached  in  Maryland,  but  this  was  by 
force  of  precedent:  lease  with  option  to  purchase,  Hollander  v. 
Central  M.  &  S.  Co.,  109  Md.  131,  71  Atl.  442,  23  L.  R.  A.  (N.  S.) 
1135. 


§  224  LAW  OP  OPTION  CONTRACTS  108 

tions  where  the  lease  is  not  assignable  without 
express  words  of  assignability  a  different  rule 
obtains.  Thus,  where  a  lease  contains  a  renewal 
clause  binding  only  the  parties  to  it  and  not  their 
"heirs  and  assigns"  it  does  not  create  a  perpetuity.^ 

A  contract  to  permit  plaintiff's  assignor  to  pros- 
pect defendant's  land  for  mineral  substances  and, 
in  case  of  success,  to  purchase  the  land  from  defen- 
dant, at  a  specified  price,  does  not  create  a  perpe- 
tuity.^ 

Sec.  224.  PERPETUITIES.  OPTION  FOR 
LIFE  OR  FOR  TERM  OF  YEARS.— According 
to  the  authorities,  where  the  time  limit  is  fixed  with 
reference  to  lives  in  being  (the  niunber  of  which 
varies  in  the  several  states)  the  option  does  not 
offend  the  rule  against  perpetuities.  Thus,  an  owner 
may  agree  that  he  will  not  sell  his  property  during 

1  Claim  that  the  renewal  clause  should  be  inserted  in  such  subsequent 

lease,  not  allowed,  Sears  v.  St.  John,  18  Can.  Sup.  Ct.  702.  See 
Hope  V.  Glouchester,  7  DeG.  M.  &  G.  647,  25  L.  J.  Ch.  145,  44  Eng. 
Eeprint  252  (1855)  ;  see  Bridges  v.  Hitchcock,  5  Bro.  P.  C.  6,  2  Eng. 
Eeprint  498  (1715)  ;  Clough  v.  Cook,  (Del.  Ch.)  87  Atl.  1017. 
Under  the  New  York  statute  a  covenant  for  renewal  is  not  void  as 
suspending  the  power  of  alienation,  because  the  giving  of  a  lease 
does  not  prevent  the  alienation  of  the  property,  Gomez  v.  Gomez, 
31  N.  Y.  S.  206,  81  Hun.  566.  See  Thaw  v.  Gaffney,  (W.  Va.)  83 
S.  E.  983. 

2  Hudgins  v.  Bowes,  (Tex.  Civ.  App.)   110  S.  W.  178;  Brush  v.  Beecher, 

110  Mich.  597,  68  N.  W.  320,  64  A.  S.  K.  373 ;  see  Thaw  v.  GaflPney, 
(W.  Va.)  83  S.  E.  983. 

3Anse  La  Butte  Oil  Co.  v.  Babb,  122  La.  415,  47  So.  754;  Buck  v. 
Walker,  115  Minn.  239,  132  N.  W.  205;  as  to  oil  and  gas  leases,  see 
Lowther  Oil  Co.  v.  Guffey,  52  W.  Va.  88,  43  S.  E.  101;  Owens  v. 
Petroleum  Co.,  (Tex.  Civ.  App.)  169  S.  W.  192. 
Covenant  for  renewal  of  lease  distinguished  from  option  to  purchase 
contained  therein  on  ground  that  the  former  creates  yested  estate 
in  the  lessee,  Starcher  Bros.  Cases,  Sec.  220. 


109  PERPETUITIES  §  224 

his  life  time,  or  that  a  certain  person  shall  have  the 
right  to  say  whether  or  not  he  will  take  it,  at  the 
owner's  death,  at  a  stipulated  price/  Stockholders 
of  a  private  trading  corporation  agreed  that  in  the 
event  of  the  death  of  any  one  or  more  of  them,  the 
remaining  stockholders  should  have  the  option  to 
purchase  the  shares  of  the  decedent  at  their  value, 
and  it  was  held  the  limitation  was  not  invalid,  as 
an  unlawful  restraint  on  the  power  of  alienation.^ 

At  common  law,  a  contingent  future  interest 
must  become  vested  within  a  life  or  lives  in  being 
and  twenty-one  years,  adding  ten  months  in  certain 
cases.  At  common  law,  a  future  contingent  estate 
limited  in  duration  by  a  term  of  years  and  not  with 
reference  to  lives  in  being,  is  void,  unless  contained 
in  a  lease  or  other  like  instrument  and  sustained  on 
the  theory  that  the  future  estate  is  vested,  or  must, 
under  the  circumstances,  vest  during  lives  in  being.* 

Under  the  California  statute,  there  is  no  legal 
objection  to  the  length  of  the  term  of  years  so  long 
as  there  are  persons  in  being  who  can  convey  a  fee 
in  possession,  but  it  is  said  it  is  extremely  doubtful 
if  the  courts  would  specifically  enforce  an  option 
where  the  election  took  place  at  a  time  unreason- 

1  Elliott  V.  DeLaney,  217  Mo.  14,  116  S.  W.  494. 

2  ritzsinunons  v.  Lindsay,  205  Pa.  79,  54  Atl.  488. 

3  Thus,   if  the   option  privilege   was   personal   to   the   optionee   so   that 

if  exercised  at  all  it  must  be  exercised  by  him  during  his  lifetime, 
it  is  vaUd,  see  In  re  Trotter's  Will,  93  N.  Y.  S.  404,  104  App.  Div. 
188,  affirmed  182  N.  Y.  465,  75  N.  E.  305. 
As  to  twenty-one  years  being  the  limitation  when  not  based  on  lives, 
see  note  3,  Sec.  221. 


§  224  LAW  OF  OPTION  CONTRACTS  110 

ably  remote.'*  However,  in  West  Virginia  it  is  held 
that  an  option  to  purchase  land  within  99  years, 
partaking,  as  it  is  said,  of  the  nature  of  an  execu- 
tory limitation  and  vesting  no  immediate  interest, 
is  an  unreasonable  restraint  on  alienation  and  void.^ 

4  Blakeman  v.  Miller,  136  Cal.  138,  68  P.  587,  89  A.  S.  B.  120. 

5  Woodall  V.  Bruen,  (W.  Va.)  85  S.  E.  170. 


CHAPTER  III. 

CONSIDERATION. 

Sec.  301.  Option  contract.    Generally. 

Sec.  302.  Rule  at  common  law. 

Sec.  303.  Mutuality  of  promises. 

Sec.  304.  Mutuality  of  promise  and  condition  precedent. 

Sec.  305.  Mutuality.    Same.    Cases. 

Sec.  306.  Mutuality.    Offers.    Partial  performance. 

Sec.  307.  Mutuality.    Same.    Cases. 

Sec    308.  Mining  options  and  licenses. 

Sec.  309.  Mining  options  and  licenses,  continued. 

Sec.  310.  Permit  to  settle  on  railroad  lands. 

Sec.  311.  Contingent  promises. 

Sec.  312.  Improvements  constituting  election  or  raising  estoppel. 

Sec.  313.  Investigation  of  property,  etc. 

Sec.  314.  Stipulation  in  option  agreement  binding  optionee  to  perform. 

Sec.  315.  Stipulation  to  repurchase  or  resell. 

Sec.  316.  Same.    Shares  of  stock. 

Sec.  317.  Double  agreements. 

Sec.  318.  Option  as  consideration  for  other  contract. 

Sec.  319.  Other  contract  as  consideration  for  option. 

Sec.  320.  Other  contract  not  consideration  for  option. 

Sec.  321.  Leases. 

Sec.  322.  Deposit  and  part  payment  of  price. 

Sec.  323.  Same,  continued.    The  test. 

Sec.  324.  Adequacy. 

Sec.  325.  Nominal  sum  of  money.   Generally. 

Sec.  326.  Decisions  holding  nominal  sum  of  money  sufficient. 

Sec.  327.  Decisions  holding  nominal  sum  of  money  insufficient. 

Sec.  328.  Nominal  sum  as  consideration.    Oil  and  gas  leases  and  licenses. 

Sec.  329.  Nominal  sum  as  consideration.   Oil  and  gas  leases  and  licenses. 

Sec.  330.  Nominal  sum  as  consideration.   Oil  and  gas  leases,  continued. 

Sec.  331.  Recital  of  consideration. 

Sec.  332.  Seal.   Common  law. 

Sec.  333.  Seal.    Statutory  modification  of  rule. 

Sec.  334.  Extensiona. 

(Ill) 


§  301  LAW  OF  OPTION  CONTRACTS  112 

Section  301.  OPTION  CONTEACT.  GENER- 
ALLY.— The  law  relating  to  option  contracts  as 
evolved  by  judicial  decision^  is  based  on  the  fact 
that  the  contract  is  supported  by  a  consideration, 
or,  in  some  jurisdictions,  is  under  seal.^  The  rule 
that  an  option  contract  based  on  a  consideration  is 
a  binding  enforceable  contract  is  now  recognized 
and  enforced  in  every  jurisdiction.  The  decisions 
on  this  point  are  so  numerous  that  we  cite  the  lead- 
ing cases  only.* 

1  An  offer  which  could  be  ripened  into  a  contract  by  acceptance  before 

withdrawal  by  the  offeree,  proved  of  great  benefit  in  commercial 
transactions,  but  it  was  unsatisfactory  to  the  offeree,  by  reason 
of  the  established  rule  that  the  offer  could  be  withdrawn  by  the 
party  making  it  at  any  time  before  its  acceptance,  and  the  decisions 
show  that  the  offer  was  usually  withdrawn  at  a  time  when  it  was 
of  most  value  to  the  party  to  whom  it  was  made.  This  incon- 
venience gave  rise  to  an  endeavor  to  prevent  withdrawal,  and  at 
the  same  time  to  leave  the  offeree  free  to  accept  or  reject  it  within 
a  fixed  time.  This  purpose  was  accomplished  by  procuring  from 
the  offerer  an  obligation  binding  him  to  keep  his  offer  open  during 
the  stipulated  time,  the  Courts  holding  that  when  this  obligation 
was  supported  by  a  consideration,  the  offerer  could  not  withdraw 
it  during  the  time  limit.  Black  v.  Maddox,  104  Ga.  1.57,  30  S.  E.  723. 

2  Johnson  v.  Lumber  Co.,  163  Fed.  249,  89  C.  C.  A.  632 ;  as  to  seal,  see 

Sec.  332. 

8  Copple  V.  Aigeltinger,  167  Cal.  706,  140  P.  1073;  Walter  G.  Reese  Co.  v. 
House,  162  Cal.  740,  124  P.  442;  Lamed  v.  Wentworth,  114  Ga.  208, 
39  S.  E.  855;  Black  v.  Maddox,  supra;  Herman  v.  Babcock,  103 
Ind.  461,  3  N.  E.  142,  lease;  Hamilton  v.  Hamilton,  162  Ind.  430, 
70  N.  E.  535 ;  Ide  v.  Leiser,  10  Mont.  5,  24  P.  695,  24  A.  S.  R.  17 ; 
New  England  Box  Co.  v.  Prentiss,  75  N.  H.  246,  72  Atl.  826 ;  Myers 
V.  Metzger,  61  N.  J.  Eq.  522,  48  Atl.  1113;  Winders  v.  Kenan,  161 
N.  C.  628,  77  S.  E.  687;  Barnes  v.  Hustead,  219  Pa.  287,  68  Atl.  839; 
Bradford  v.  Foster,  87  Tenn.  4,  9  S.  E.  195,  overruling  earlier 
decisions;  National  Oil  Co.  v.  Teel,  95  Tex.  586,  68  S.  W.  979;  Walker 
V.  Bamberger,  17  Utah  239,  54  P.  108 ;  Cummins  v.  Beavers,  103  Va. 
230,  48  S.  E.  891,  106  A.  S.  R.  881,  1  Ann.  Cas.  986;  Baker  v.  Shaw, 
68  Wash.  99,  122  P.  611. 


113  CONSIDERATION  §  301 

On  the  other  hand,  a  mere  unaccepted  offer,  not 
under  seal,  or  not  supported  by  a  consideration,  is 
nudum  pactum,'*^  notwithstanding  it  is  expressly 
recited  in  the  writing  that  it  is  irrevocable.^ 

3  Pollock  V.  Brookover,  60  W.  Va.  75,  53  S.  E.  795,  6  L.  E.  A.  (N.  S.)  403; 

Tibbs  V.  Zirkle,  55  W.  Va.  49,  46  S.  E.  701,  104  A.  S.  K.  977,  2  Ann. 
Gas.  421;  Weaver  v.  Burr,  31  W.  Va.  736,  8  S.  E.  743,  3  L.  R.  A.  94, 
the  consideration  need  not  be  expressed  in  the  writing;  Frank  v. 
Stratford-Handcock,  13  Wyo.  37,  77  P.  134,  110  A.  S.  E.  963,  67 
L.  E.  A.  571;  Couch  v.  McCoy,  138  Fed.  696;  Marthinson  v.  King, 
150  Fed.  48,  82  C.  C.  A.  360;  Johnston  v.  Trippe,  33  Fed.  530; 
Frank  v.  Schnuettgen,  187  Fed.  515,  109  C.  C.  A.  281. 

There  must  be  some  consideration  on  which  the  ' '  finger  can  be  placed, ' ' 
Elliott  V.  DeLaney,  217  Mo.  14,  116  S.  W.  494;  but  it  need  not 
be  expressed  in  the  writing,  Bean  v.  Burbank,  16  Me.  458,  33  Am. 
Dec.  681 ;  and  may  be  paid  after  the  execution  of  the  option,  Cum- 
mins V.  Beavers,  supra. 

"The  two  things  (option  and  offer)  should  not  be  confused.  In  the 
one  case  (option)  there  is  a  valid  contract,  based  on  a  considera- 
tion, to  allow  the  offer  or  proposition  to  remain  open  for  accept- 
ance until  the  time  specified.  In  the  other  case  (offer),  there  is  a 
mere  offer  or  proposition  which  is  not  a  contract  until  acceptance," 
Prior  V.  Hilton  &  D.  Lumber  Co.,  141  Ga.  117,  80  S.  E.  559. 

A  covenant  to  pay  money  as  consideration  for  an  option  is  a  contract 
subject  to  the  general  rules  pertaining  to  such  engagements,  Reilly 
V.  Steinhart,  146  N.  Y.  S.  534. 

In  Boston  etc.  E.  Co.  v.  Bartlett,  3  Cush.  (Mass.)  224,  it  is  said 
(speaking  of  the  right  to  withdraw  an  offer  without  consideration), 
that  a  different  doctrine  prevails  in  France,  Scotland,  and  Holland, 
in  which  countries  it  is  held  that  whenever  an  offer  (without  con- 
sideration) is  made  granting  a  party  a  certain  time  within  which 
to  decide  whether  he  will  accept  it  or  not,  the  party  making  the 
offer  can  not  withdraw  it  before  lapse  of  the  appointed  time. 

The  common-law  rule  obtains  under  the  Louisiana  Code,  Kirby  etc.  Co. 
V.  Burnett,  144  Fed.  635,  75  C.  C.  A.  437. 

4  Borst  V.  Simpson,  90  Ala.  373,  7  So.  814;  Cahaba  Coal  Co.  v.  Veitch,  186 

Ala.  220,  65  So.  75;  Brown  v.  San  Francisco  Sav.  Union,  134  Cal.  448, 
66  P.  592;  Goodman  v.  Spurlin,  131  Ga.  588,  62  S.  E.  1029;  Litz  v. 
Goosling,  93  Ky.  185,  19  S.  W.  527,  14  Ky.  L.  Eep.  91,  21  L.  E.  A. 
127 ;  Bean  v.  Burbank,  16  Me.  458,  33  Am.  Dec.  681 ;  Davis  v.  Petty, 
147  Mo.  374,  48  S.  W.  944;  Axe  v.  Tolbert,  179  Mich.  556,  146  N.  W. 
418;  Warren  v.  Costello,  109  Mo.  338,  19  S.  W.  29,  32  A.  S.  E.  669; 
Tidball  v.  Challburg,  67  Neb.  524,  93  N.  W.  679;  Houghwout  v. 
Boisaubin,  18  N.  J.  Eq.  315;  Burnet  v.  Bisco,  4  Johns.  (N.  Y.)  235; 
8 — Option  Contracts. 


§  302  LAAV  OF  OPTION  CONTRACTS  114 

Sec.  302.  RULE  AT  COMMON  LAW.— At  com- 
mon law,  every  contract  not  mider  seal  requires  a 
valuable  consideration  to  support  it.^  But  the  con- 
sideration need  not  consist  of  money  actually  pass- 
ing at  the  time.  The  consideration  may  consist  of 
a  real  benefit  to  the  promisor,  or  a  real  detriment 
suffered  by  the  promisee,  or  it  may  arise  out  of 
mutual  promises  of  the  parties.^ 

4  Bryant    Timber   Co.   v.    Wilson,    151   N.   C.    154,    65    S.   E.   932,   934; 

Sprague  v.  Schotte,  48  Ore.  609,  87  P.  1046 ;  Connor  v.  Eenneker,  25 

S.   C.   514;    Faulkner  v.   Hebard,   26   Vt.   452;    Smith   v.   EeynoldB, 

8  Fed.  696,  3  McCrary  157. 
Upon  acceptance  of  a  mere  offer  before  withdrawal  the  price  named 

constitutes  the  consideration,  Mossie  v.  Cyrus,  61  Ore.   17,   119  P. 

485 ;  see  Walter  G.  Reese  Co.  v.  House,  162  Cal.  740,  124  P.  442. 
* '  The  consideration   makes   a   right   out   of   what,   in   the   other   case 

(offer)  is  a  privilege  merely,"  Gustin  v.  School  Dist.,  94  Mich.  502, 

54  N.  W.  156,  34  A.  S.  R.  361. 

5  Carton  v.  Wilson,  13  Ont.  L.  Rep.  412, 

1  Bills  of  exchange  and  promissory  notes  are  said  to  be  exceptions  to  the 

rule,  but,  as  to  such  paper,  and  now,  in  many  states,  as  to  written  as 
distinguished  from  oral  contracts,  the  writings  import  consideration. 

2  In  Weaver  v.  Burr,  31  W.  Va.  736,  8  S.  E.  743,  753,  3  L.  R.  A.  94,  it  is 

said  the  consideration  for  a  promise  on  the  part  of  the  optionor  to 
leave  an  offer  open  for  a  specified  time  ' '  may  consist  of  some  benefit 
to  the  promisor;  or  some  loss,  injury  or  inconvenience  to  the 
promisee;  or  some  money,  or  other  thing  of  value,  given,  exchanged 
or  paid;  or  of  some  promise  or  undertaking  of  the  promisee  to  pay, 
give,  or  exchange,  such  thing  of  value;  or  to  incur  some  trouble  or 
expense;  or  do  or  not  to  do  some  lawful  act;  or  to  surrender, 
abandon,  or  suspend  the  exercise  of  some  legal  right,"  and  at  the 
same  page  the  court  adds  that  "it  is  not  necessary  that  a  benefit 
should  inure  to  the  person  making  the  promise.  It  is  sufficient  if 
something  flows  from  the  person  to  whom  it  is  made  and  that  the 
promise  is  the  inducement  to  the  transaction." 
Also  Litz  v.  GoosUng,  93  Ky.  185,  19  S.  W.  527,  14  Ky.  L.  Eep.  91, 
21  L.  E.  A.  127. 


115  CONSroERATION — COMMON    LAW    RULE  §  302 

This  excludes,  of  course,  a  benefit  to  which  the 
promisor  is  lawfully  entitled  as  well  as  a  detriment, 
which  the  promisee  is  lawfully  bound  to  suffer.^ 

In  accordance  with  common  law  rules,  the  con- 
sideration for  an  option  contract  may  consist,  first, 
of  money  paid  at  the  time  by  the  optionee  to  the 
optionor,  secondly,  of  any  other  thing  of  value 
given  at  the  time  by  the  optionee  to  the  optionor 
for  the  option  privilege,  or  thirdly,  of  some  for- 
bearance, detriment,  loss,  or  responsibility,  given, 
suifered,  or  endured,  by  the  optionee.^ 

It  may,  also,  consist  of  a  promise  on  the  part  of 
the  optionee  to  the  optionor  for  the  option  privi- 
lege, but  the  promise  to  constitute  a  consideration 
must  be  with  reference  to  some  thing,  the  perform- 
ance of  which  will  be  a  real  benefit  to  the  optionor, 
or  a  real  detriment  to  the  optionee,  and  also,  the 
promise  must  be  one  which  is  enforceable  by  the 
optionor,  since,  under  the  rule,  a  promise  is  not  a 
consideration  for  a  promise  unless  there  is  mutual- 
ity of  promises.^ 

2  ' '  Benefit, ' '  within  the  rule,  means  that  the  promisor  has,  in  return 
for  his  promise,  acquired  some  legal  right  to  which  he  would  not 
otherwise  have  been  entitled,  and  * '  detriment ' '  means  that  the 
promisee  has,  in  return  for  his  promise,  acquired  some  legal  right  to 
which  he  would  not  otherwise  have  been  entitled,  Harp  v.  Hamilton, 
(Tex.  Civ.  App.)  177  S.  W.  565. 

8  Wescott  V.  Mitchell,  95  Me.  377,  50  Atl.  21. 

4  Thus,  an  agreement  by  the  president  of  a  stock  company,  individually, 
to  take  the  stock  purchased,  off  the  hands  of  the  purchaser,  after 
six  months'  notice,  at  par,  the  agreement  being  the  inducement  to 
purchase,  is  not  invalid  for  want  of  consideration,  since  the  company 
received  a  benefit  from  the  agreement  and  the  purchaser  did  what 
he  otherwise  would  not  have  done  but  for  the  promise,  Moench  y. 
Hower,  137  Iowa  621,  115  N.  W.  229. 

B  Simpson  v.  Sanders,  130  Ga.  265,  60  S.  E.  541. 


§  303  LAW  OF  OPTION  CONTRACTS  116 

Sec.  303.  MUTUALITY  OF  PEOMISES.— 
We  have  seen  that  in  the  law  of  contracts,  a  promise 
is  a  sufficient  consideration  for  a  promise,  and 
applying  this  rule  to  option  contracts,  it  follows 
that  a  promise  on  the  part  of  the  optionee  is  a 
sufficient  consideration  for  a  promise  on  the  part 
of  the  optionor  to  keep  his  offer  open  for  a  specified 
time.  But  to  have  this  effect  the  promise  must,  in 
point  of  time,  be  concurrent  and  mutual.^  B)^  this 
it  is  not  meant  the  promise  of  the  optionee  must,  at 
the  time,  be  executed,  that  is,  performed,  but  the 
promise  must  be  such  as  to  bind  him  to  perform- 
ance at  the  instance  of  the  optionor.^ 

1  Weaver  v.  Burr,  31  W.  Va.  736,  8  S.  E.  743,  3  L.  E.  A.  94;  Tucker  v. 

Woods,  12  Johns.  (N.  Y.)  190,  7  Am.  Dec.  305. 

In  Taber  v.  Dallas  County,  101  Tex.  241,  106  S.  W.  332,  it  is  held 
when,  in  the  contract,  there  is  a  promise  to  convey  and  a  promise  by 
the  purchaser  to  pay  the  agreed  price,  mutuality  is  created  which  is 
not  destroyed  because  of  a  stipulation  providing  the  purchaser  could 
terminate  the  contract  by  refusing  to  pay  interest  for  60  days. 

In  Eclipse  Oil  Co.  v.  So.  Penn.  Oil  Co.,  47  W.  Va.  84,  34  S.  E.  923,  929, 
it  is  stated  if  the  agreement  is  not  presently  mutual  the  party  not 
bound  can  not  avail  himself  of  it  as  obligatory  upon  the  other,  nor 
render  it  obligatory  upon  the  other,  by  any  subsequent  act  of  his 
own,  without  the  consent  of  the  other. 

2  Simpson  v.  Sanders,  130  Ga.  265,  60  S.  E.  541 ;  Wardell  v.  Williams,  62 

Mich.  50,  28  N.  W.  796,  800,  4  A.  S.  R.  814. 
Seyferth  v.  Groves  &  L.  R.  R.  Co.,  217  Hi.  483,  75  N.  E.  522,  payment  of 

option  consideration  postponed. 
Cummins  v.  Beavers,   103  Va.  230,  48  S.  E.   891,   106  A.  S.  R.  881, 

1   Ann.  Cas.   986;   consideration  for  option  may  be  paid  after  its 

execution. 
Grabenhorst   v.    Nicodemus,    42    Md.    236,    payment    of    consideration 

deferred  one  year. 
Taylor  v.  Newton,  152  Ala.  459,  44  So.  583,  subsequent  part  payment 

on  price  furnishes  consideration  for  option. 
In  Brewer  v.  Sowers,  118  Md.  681,  86  Atl.  228,  there  is  an  intimation 

that  the  recital  of  a  consideration  in  the  option  is  a  promise  to  pay 

it  and,  therefore,  is  sufficient,  though  delayed;  see  also  Bibelhausen 

V.  Bibelhausen,  (Wis.)  150  N.  W.  516. 


117  CONSIDERATION — PROMISES  §  304 

Again,  the  promise  of  the  optionee  must  be  with 
reference  to  some  act  or  forbearance  which,  in  law, 
amounts  to  a  real  benefit  to  the  optionor  or  a  real 
detriment  to  the  optionee.  The  decisions  next  to 
be  cited  aptly  illustrate  and  sustain  these  general 
rules.  It  needs  to  be  added,  however,  that  the  mutu- 
ality we  are  speaking  of  is  that  mutuality  of  agree- 
ment required  by  law  to  exist  at  the  time  of  the 
making  of  the  promises  so  as  to  raise  a  real  option 
contract  and  thus  legally  to  prevent  the  withdrawal 
of  the  option  privilege  by  the  optionor  before  the 
expiration  of  the  time  limit.  In  a  pure  offer  there 
is  no  mutuality  of  obligation  until  acceptance, 
whereupon  the  contract  thus  raised  becomes  bi- 
lateral, that  is,  the  promises  become  mutual  and, 
therefore,  binding  upon  the  respective  parties.^ 

Sec.  304.  MUTUALITY  OF  PROMISE  AND 
CONDITION  PRECEDENT.— The  promise  of 
the  optionee  which  we  are  considering  is  one  which 
binds  him  to  do,  or  forbear  to  do,  a  particular  thing. 

2  A  consideration  mentioned  in  a  contract  which  is  not  legally  enforce- 

able is  equivalent  to  no  consideration,  Eclipse  Oil  Co.  v.  So.  Penn. 
Oil  Co.,  47  W.  Va.  84,  34  S.  E.  923,  929;  also  Litz  v.  Goosling,  93 
Ky.  185,  19  S.  W.  527,  14  Ky.  L.  Kep.  91,  21  L.  E.  A.  127. 
If  the  promise  on  the  part  of  the  optionee  is  the  performance  of  some 
personal  act  which  because  of  this  fact  is  not  legally  enforceable 
against  him,  then  mutuality  does  not  arise  until  the  act  has  been 
fully  performed.  Smith  v.  Cauthen,  98  Miss.  746,  54  So.  844,  adver- 
tising property  by  agent  given  option  to  purchase;  promise  of  wife 
to  convey  her  homestead,  Williams  v.  Graves,  7  Tex.  Civ.  App.  356, 
26  S.  W.  334. 

3  Upon  acceptance  before  withdrawal,  the  price  named  for  the  optioned 

property  constitutes  the  consideration,  Mossie  v.  Cyrus,  61  Ore.  17, 
119  P.  485;  Walter  G.  Eeese  Co.  v.  House,  162  Cal.  740,  124  P.  442. 


§  305  LAW  OP  OPTION  CONTRACTS  118 

The  performance  of  the  promise  is  not  optional  or 
discretionary  with  the  optionee.  Such  a  promise 
must,  therefore,  be  distinguished  from  a  stipulation 
in  an  option  contract  requiring  the  optionee  to  do 
a  particular  act  as  a  condition  of  his  right  to  exer- 
cise the  option  privilege.  In  the  latter  case,  the 
optionee  is  not  obligated  to  perform  the  act,  and 
under  the  terms  of  the  option  contract  as  usually 
made,  if  he  fails  to  do  so,  he  loses  his  option  privi- 
lege, whereas,  a  promise  by  the  optionee  whereby 
he  obligates  himself  to  do  a  particular  act  such  as 
to  pay  taxes,  to  advertise  the  property,  etc.,  must 
be  fulfilled,  irrespective  of  the  exercise  of  the 
option  privilege.  In  the  latter  case,  the  absolute 
promise  of  the  optionee  is  a  sufficient  consideration 
to  support  the  option  contract.  In  the  former,  there 
is  an  entire  lack  of  present  consideration,  and 
whether  the  promise  may  be  turned  into  a  con- 
sideration, or  give  rise  to  mutuality  of  promises, 
depends  upon  the  fact  of  its  performance,  an  act 
which,  of  course,  takes  place  after  the  execution  of 
the  option  contract. 

Sec.  305.  MUTUALITY.  SAME.  CASES.— 
Thus,  a  land  owner  gave  another  an  option  to  select 
and  purchase  a  portion  of  his  land  at  a  certain 
price,  on  condition  that  the  selection  be  made  by  a 
given  time,  and  upon  the  further  condition  that  the 
optionee  pay  the  taxes  and  improve  a  portion  of  the 
lands  selected,  upon  performance  of  which  the 
owner  agreed  to  convey.  The  optionee  entered  into 
possession  and  commenced  to  improve  the  land,  and 


119  CONSIDERATION — PROMISES  §  305 

it  was  held  these  acts  furnished  mutuality  and  con- 
sideration for  the  agreement  to  convey/ 

So,  where  defendant  sold  land  to  plaintiff,  the 
conditions  of  the  agreement  being  that  if  plaintiff 
constructed  a  proposed  railroad  and  had  trains 
running  within  a  year,  then  defendant  should  deed 
the  property  to  plaintiff  upon  payment  of  the  price 
then  to  become  due.  Plaintiff,  by  the  agreement, 
was  authorized  to  take  possession  and  did  so,  and 
the  road  was  completed,  and  trains  were  running 
within  the  year,  and  it  was  held  that  thereby  the 
contract  became  mutual.^ 

The  facts  vary  in  particular  cases  but  the  same 
rule  applies.  Thus,  where  one  party  agrees  to 
assign  a  claim  upon  delivery  to  him  of  certain 
notes,  by  a  certain  day,  and  the  notes  are  then  deliv- 
ered, the  offer  is  thereby  accepted,  and  the  contract 
completed.  The  acceptance  constitutes  a  legal  con- 
sideration for  the  engagement,  and,  of  course, 
makes  the  contract  mutual.^ 

Where  conveyance  of  mining  property  was  to  be 
made  upon  payment  of  certain  sums  out  of  the 
property,  the  grantee  is  not  entitled  to  a  deed, 
though  given  possession  of  the  mine  with  a  license 

1  Perkins  v.  Hadsell,  50  Bl.  216,  distinguishing  Boucher  v.  Van  Buskirk, 

9  Ky.   (2  A.  K.  Marsh)   345,  in  that  the  improvements  there  relied 
on  as  a  consideration  were  not  made. 

See  Boyd  v.  Brinckin,  55  Cal.  427,  where  defendant  settled  on  the  land 
and  filed  his  application  to  purchase  as  directed  by  the  circular  of 
plaintiff,  having  made  valuable  improvements,  and  it  was  held  such 
acts  created  a  valid  contract. 

2  Byers  v.  Denver  C.  R.  Co.,  13  Colo.  552,  22  P.  951. 

8  Cutting  v.  Dana,  25  N.  J.  Eq.  265;  see  Boyd  v.  Brinckin,  supra;  Laning 
V.  Cole,  4  N.  J.  Eq.  228. 


§  306  LAW  OP  OPTION  CONTRACTS  120 

to  extract  ore,  until  performance  of  the  condition/ 
So,  also,  where  an  oil  lease  is  made  in  consideration 
of  a  payment  to  be  made  in  advance  for  delay  in 
commencing-  development  operations,  the  payment 
in  advance  is  a  condition  precedent  to  the  existence 
of  any  obligation  on  the  part  of  the  lessor  under 
the  lease.^ 

Sec.  306.  MUTUALITY.  OFFERS.  PAR- 
TIAL PERFORMANCE.— With  reference  to  a 
pure  offer,  mutuality  arises  only  upon  and  by  timely 
acceptance  of  the  offer.  The  acceptance  has  the 
effect  of  giving  mutuality  and  furnishing  consider- 
ation. The  acceptance,  by  the  terms  of  the  offer, 
may  consist  of  a  mere  notice,  or  it  may,  by  the 
terms  of  the  offer,  consist  of  notice  and  some  other 
act  touching  the  partial  or  full  performance  of  the 
offer  by  the  offeree,  or  of  some  collateral  matter. 

Where  the  acceptance  is  the  act  alone  of  giving 
notice,  the  case  is  simple.  The  offer  is  turned  into 
a  binding  and  enforceable  contract  having  mutu- 
ality and  consideration  by  the  simple  act  of  giving 
notice.  Where,  however,  the  acceptance  consists 
not  only  of  giving  notice  but  also  of  the  perform- 
ance of  some  act,  or  series  of  acts,  or  consists  alone 
of  the  performance  of  some  act,  or  of  a  series  of 
acts,  the  question  arises  whether  there  must  be  a 
full  and  complete  performance  by  the  offeree  in 
order  to  give  mutuality  and  consideration. 

4  Smith  V.  Jones,  21  Utah  270,  60  P.  1104;  also  Waterman  v.  Banks,  144 
U.  S.  394,  36  L.  Ed.  479,  12  S.  Ct.  646. 

6  Jennings-Heywood  Oil  Synd.  v.  Houssiere-Latreille  Oil  Co.,  119  La.  793, 
44  So.  481. 


121  CONSIDERATION PERFORMANCE  AS  §  307 

Since  the  performance  by  the  offeree  is  optional, 
it  would  seem  full  performance  is  required  except 
in  those  cases  where  the  performance  of  one  of  a 
series  of  acts,  or  commencing  to  perform  the  par- 
ticular act,  has  the  effect  of  making  an  acceptance^ 
or  of  working  an  estoppel.^ 

Sec.  307.  MUTUALITY.  SAME.  CASES.— 
As  illustrating  and  applying  the  rules  of  the  pre- 
ceding section,  it  is  held,  under  an  option  for  the 
purchase  of  land,  providing  that  upon  payment  of 
a  certain  sum  and  receipt  of  conveyance,  plaintiff 
was  to  deliver  to  defendant  a  promissory  note 
secured  by  mortgage,  for  the  balance  of  the  price, 
there  is  no  mutuality  until  final  payment  of  the  full 
price,  where  the  contract  contained  a  provision  that 
the  only  penalty  for  failure  or  refusal,  at  any  time, 
to  complete  the  purchase,  was  the  forfeiture,  as 
liquidated  damages,  of  all  sums  previously  paid.^ 

A  contract  providing  that  on  payment  of  two 
notes  at  their  respective  maturities,  the  maker 
should  have  an  exclusive  option  to  purchase  certain 
lands  at  a  fixed  price,  is  revocable  by  the  payee 

1  Cooper  V.  Lansing  Wheel  Co.,  94  Mich.  272,  54  N.  W.  39,  34  A.  S.  E.  341. 

But  ordinarily  it  is  the  binding  promise  itself  and  not  its  performance 
that  constitutes  the  consideration,  except  in  those  cases  where  per- 
formance on  one  side  is  made  a  condition  precedent  to  performance 
on  the  other,  see  United  &  G.  E.  Mfg.  Co.  v.  Conard,  80  N,  J.  L.  286, 
78  Atl.  203. 

2  As  to  estoppel,  see  Taber  v.  Dallas  County,  101  Tex.  241,  106  S.  W.  332. 

lEude  V.  Levy,  43  Colo.  482,  96  P.  560,  24  L.  E.  A.  (N.  S.)  91,  127 
A.  S.  E.  123,  the  theory  of  this  case  being  that  the  damage  clause 
made  the  agreement  an  option;  see  also  Smith  v.  Jones,  21  Utah  270, 
60  P.  1104, 


§  308  LAW  OF  OPTION  CONTRACTS  122 

upon  failure  to  pay  tlie  second  note,  though  the  first 
note  had  been  fully  and  timely  paid.^ 

Under  a  continuing  offer  to  sell  a  certain  quan- 
tity of  whiskey  for  each  year  of  a  term  of  five 
years,  acceptance  for  any  one  year,  or  any  part  of 
the  whiskey  less  than  the  whole,  does  not  give  the 
contract  mutuality.^ 

On  the  other  hand,  it  is  held  that  acceptance  by 
a  manufacturer,  of  an  order  to  deliver  to  plaintiff, 
all  the  goods  of  a  specified  class  that  plaintiff  may 
need  during  the  season,  is  merely  an  offer  to  deliver 
the  goods,  which  offer  the  manufacturer  has  no 
right  to  withdraw  as  to  orders  placed  before  with- 
drawal, and  especially  where  he  has  filled  an  order 
at  the  price  specified,  and  thus  had  the  benefit  of  a 
sale.* 

Sec.  308.  MINING  OPTIONS  AND 
LICENSES. — A  contract  provided  that  plaintiff 
without  payment,  should  be  allowed  to  enter  into 
possession  of  a  mine  owned  by  defendant  for  the 
purpose  of  developing  the  same.  Such  development 
contemplated  the  expenditure  of  money.  The  net 
proceeds  of  ore  extracted  were  to  be  turned  over  to 
the  defendant.  The  contract  also  gave  plaintiff  an 
option  to  purchase  the  mine  for  a  certain  sum,  pay- 
able on  or  before  a  certain  time.    In  the  event  of 

2  Title  I.  &  T.  Co.  V.  King  L.  &  I.  M.  P.  Co.,  19  Cal.  App.  458,  126  P.  372. 

3  Rehm-Zeiher  Co.  v.  F.  G.  Walker  Co,  156  Ky.  6,  160  S.  W.  777,  distin- 

guishing Louisville  &  N,  R.  Co,  v.  Coyle,  123  Ky.  854,  97  S.  W.  772, 
99  S.  W.  237,  30  Ky.  L.  Rep.  201,  8  L.  R.  A.  (N.  S.)  433,  124 
A.  S.  R.  384. 

4  Cooper  V.  Lansing  Wheel  Co.,  94  Mich.  272,  54  N.  W.  39,  34  A.  S.  R.  341. 


123  CONSIDERATION — MINING    AGREEMENTS  §  309 

purchase,  the  net  proceeds  of  the  ore  turned  over 
to  the  plaintiff  were  to  be  credited  on  the  purchase 
price.  Plaintiff  entered  into  possession  of  the  mine 
and  made  outlay  of  labor  and  money  in  operating 
it,  and  it  was  held  there  was  sufficient  consideration 
to  support  the  option/ 

Sec.  309.  MINING  OPTIONS  AND 
LICENSES,  CONTINUED.— On  the  other  hand, 
an  executory  gas  and  oil  lease  which  provides  for  its 
surrender  at  any  time,  without  pajTuent  of  rent  or 
fulfillment  of  any  of  its  covenants  on  the  part  of 
the  lessee,  creates  a  mere  right  of  entry  at  will, 
which  may  be  terminated  by  the  lessor  at  any  time 
before  its  execution  by  the  lessee.^ 

In  another  case,  a  lease  granted  the  lessee  the 
right  to  mine  for  oil  and  gas  so  long  as  the  same 
were  produced  and  the  royalties  and  rentals  were 
paid,  but  did  not  bind  the  lessee  to  perform  any 
obligation,  and  it  was  held  there  could  be  no  mutu- 

iClarno  v.  Grayson,  30  Ore.  Ill,  46  P.  426;  also  Hall  v.  Abraham,  44 
Ore.  477,  75  P.  882,  in  both  of  these  cases  possession  and  development 
of  the  mines  were  in  pursuance  of  the  terms  of  the  agreements. 

1  Eclipse  Oil  Co.  v.  So.  Penn.  Oil  Co.,  47  W.  Va.  84,  34  S.  E.  923 ;  in  this 
case  the  lessee  did  nothing  under  the  lease  except  to  pay  the  commu- 
tation rental  in  lieu  of  development  work  as  provided  for  in  the 
lease.  The  Court  at  page  929  of  the  Eeporter  said:  "The  only  con- 
siderations mentioned  in  the  lease  are  the  royalties  and  rentals  on 
oil  and  gas  to  be  produced  and  the  commutation  for  failure  to  com- 
plete a  well.  The  plaintiff  was  not  bound  to  complete  a  well  at  any 
given  time  or  during  the  life  of  the  lease,  so  as  to  produce  oil, 
royalties  or  gas  rentals.  ...  It  was  entirely  optional  to  bore  or 
not,  or  pay  or  not.  He  was  bound  to  do  neither,  but  could  decline 
to  do  both. ' '  McMillan  v.  Philadelphia  Co.,  159  Pa.  142,  28  Atl.  220, 
and  Jackson  v.  O'Hara,  183  Pa.  233,  38  Atl.  624,  are  distinguished 
on  the  ground  that  the  lessee  was  bound  either  to  drill  or  to  pay 
rental;  see  also  Smith  v.  Guffey,  202  Fed.  106,  120  C.  C.  A.  436. 


§  310  LAW  OP  OPTION  CONTRACTS  124 

ality  until  the  lessee  liad  done  some  act  under  the 
lease  so  as  to  bind  him  to  exercise  the  option.^ 

Sec.  310.  PERMIT  TO  SETTLE  ON  RAIL- 
ROAD LANDS. — The  defendant  desired  to  make 
improvement  of  certain  of  its  land  which  it 
expected  to  acquire  under  the  land  grant  acts,  and 
issued  circulars  under  which  persons  desiring  to 
settle  upon  the  lands  could  do  so.  Plaintiff's 
assignor  applied  for  a  permit  and  one  was  issued 
to  him.  A  few  days  afterwards  and  before  plain- 
tiff's assignor  had  entered  upon  the  land  or  done 
anything  under  the  permit,  defendant  revoked  the 
permit.  Later  on,  plaintiff's  assignor,  disregarding 
the  revocation,  entered  upon  the  land  and  "broke 
up"  a  part  of  it  against  the  wishes  and  express 
order  of  the  defendant.  The  question  was,  whether 
defendant  had  a  right  to  revoke  the  permit,  and  it 
was  held  defendant  had  such  a  right  because  there 
was  no  promise  on  the  part  of  plaintiff's  assignor 
to  enter  and  improve  the  lands,  the  revocation  hav- 
ing been  made  before  plaintiff's  assignor  entered 
upon  or  improved  the  land.^ 

2  Cortelyou  v.  Barnsdall,  236  ni.  138,  86  N.  E.  200,  s.  c.  140  HI.  App.  163. 
Also  Federal  Oil  Co.  v.  Western  Oil  Co.,  112  Fed.  373,  and  under  such 
kind  of  lease  an  agreement  to  complete  second  well  does  not  furnish 
consideration. 
See  also  Witherspoon  v.  Staley,  (Tex.  Civ.  App.)  156  S.  W.  557;  Hug- 
gins  V.  Daley,  99  Fed.  606,  40  C.  C.  A.  12,  48  L.  E.  A.  320 ;  Dlinois 
Kaolin  Co.  v.  Goodman,  252  111.  99,  96  N.  E.  867 ;  Goodson  v.  Vivian 
Oil  Co.,  129  La.  955,  57  So.  281. 

1  Ellsworth  V.  So.  Minn.  By.  Ex.  Co.,  31  Minn.  543,  18  N.  W.  822,  distin- 
guishing Boyd  V.  Brinckin,  55  Cal.  427,  by  the  fact  that  there  was  an 
acceptance  of  the  offer  by  the  acts  of  entering  on  and  improving  the 
land  in  accordance  with  the  terms  of  the  offer.  In  the  Minnesota 
case  the  court  said  it  would  not  be  presumed,  as  a  matter  of  law, 
there  was  a  promise  by  plaintiff's  assignor  from  the  mere  fact  that 
he  appliec'  *or  and  received  the  permit. 


125  CONSIDERATION — CONTINGENT  PROMISES  §  311 

Sec.  311.  CONTINGENT  PROMISES.— It  is 
well  to  note  here  there  are  some  decisions  holding 
that  a  contingent  promise  can  form  a  consideration 
for  a  promise.  Thus,  in  a  Tennessee  case^  it  is  held 
a  stipulation  on  the  part  of  one  party  to  deliver 
salt  when  called  on  by  the  other,  and  a  stipulation 
on  the  part  of  the  latter  to  pay  for  the  salt  when 
delivered,  constitute  a  mutual  and  valid  agreement 
founded  upon  sufficient  consideration.  It  will  be 
observed  that,  under  this  agreement,  it  was 
optional  with  the  purchaser  to  call  for  the  salt 
and,  therefore,  in  the  absence  of  an  order  for  the 
salt,  the  agreement  was  not  enforceable  against  the 
purchaser.  The  cited  decision  is  not  in  accord  with 
the  weight  of  authority.  Had  the  agreement  by 
its  terms  bound  the  purchaser  to  take  all,  or  a  cer- 
tain quantity  of  salt,  then  undoubtedly  there  would 
have  been  mutuality  and  consideration  to  support 
the  agreement.^ 

A  stipulation  in  an  option  contract  for  payment 
of  the  price  for  the  property,  or  a  royalty  for  its 
use,  and  the  like,  becomes  binding  and  enforceable 

1  Cherry  v.  Smith,  22  Tenn.  19,  39  Am.  Dec.  150,  the  language  of  the 

court  supports  the  statement  in  the  text,  but  the  facts  seem  to  show 
there  was  an  order  for  the  salt  and  if  so,  the  case  was  correctly 
decided;  see  also  Hoffman  v.  Maffioli,  104  Wis.  630,  80  N.  W.  1032, 
47  L.  E.  A.  427. 

2  Rfthm-Zeiher  Co.  v.  F.  G.  Walker  Co.,  156  Ky.  6,  160  S.  W.  777;  Dailey 

Co.  V.  Clark  Can  Co.,  128  Mich.  591,  87  N.  W.  761;  Hickey  v.  O'Brien, 
123  Mich.  611,  82  N.  W.  241,  49  L.  R.  A.  594,  81  A.  S.  R.  227;  Minn. 
L.  Co.  V.  White  Breast  Coal  Co.,  160  HI.  85,  43  N.  E.  774,  31  L.  R.  A. 
529;  McCaw  Mfg.  Co.  v.  Felder,  115  Ga.  408,  41  S.  E.  664;  Parks  v. 
Griffith,  123  Md.  233,  91  Atl.  581;  Simpson  v.  Sanders,  130  Ga.  265, 
60  S.  E.  541 ;  Sheffield  Furnace  Co.  v.  Hull  C.  &  C.  Co.,  101  Ala.  446, 
14  So.  672;  Wells  v.  Alexandre,  130  N.  Y.  642,  29  N.  E.  142,  15 
L.  R.  A  218 ;  Cooper  v.  Lansing  Wheel  Co.,  94  Mich.  272,  54  N.  W. 
39,  34  A.  S.  R.  341;  Sivell  v.  Hogan,  119  Ga.  167,  46  S.  E.  67. 


§  312  LAW  OF  OPTION  CONTRACTS  126 

only  upon  election.  In  sucli  cases  the  stipulation 
is  not  a  promise  within  the  rule  of  mutuality. 
Thus,  defendant  gave  plaintiff  a  written  proposal 
to  allow  plaintiff  to  print  books  from  its  stereotype 
plates  upon  payment  of  a  royalty.  The  proposal 
was  not  accepted  and  consequently  the  stipulation 
for  payment  of  the  royalty  did  not  furnish  a  con- 
sideration for  the  proposal.^ 

The  same  rule  obtains  under  a  gas  and  oil  lease 
where  a  royalty  was  agreed  to  be  paid.* 

Sec.  312.    IMPROVEMENTS  CONSTITUT- 
ING ELECTION  OR  RAISING  ESTOPPEL.— 

Unless,  by  the  terms  of  the  option  contract,  the 
optionee  is  obligated  to  improve  the  optioned  prop- 
erty, or  has  been  promised  an  option  if  he  makes 
the  improvements,  it  would  seem,  on  principle,  that 
the  mere  making  of  improvements  does  not  fur- 
nish a  consideration  to  support  the  option  con- 
tract.^ While  this  is  true  as  a  general  rule,  still 
the  effect  of  making  improvements  and  of  per- 
forming other  like  acts,  under  particular  circum- 

3  Collier  v.  Trow's  etc.  Co.,  1  N.  Y.  S.  844,  49  Hun.  147. 

In  Taylor  v.  Newton,  152  Ala.  459,  44  So.  583,  it  is  held  that  although 
the  option  is  without  consideration  at  the  time  it  was  given,  still  if 
the  optionor  accepts  part  payment  on  the  price  before  expiration  of 
the  time  limit,  he  can  not  then  withdraw. 

In  Eiee  v.  Gibbs,  33  Neb.  460,  50  N.  W.  436,  there  is  a  passing  remark 
that  the  stipulation  to  pay  the  price  furnished  the  requisite  consid- 
eration for  the  option,  but  the  remark  is  obiter  and  unsupported  by 
authority. 

4  Davis  V.  Riddle,  25  Colo.  App.  162,  136  P.  551;    Smith  v.  Guffey,  202 

Fed.  106,  120  C.  C.  A.  436. 

1  Gordon  v., Darnell,  5  Colo.  302;  Clarno  v.  Grayson,  30  Ore.  Ill,  46  P. 
426,  429. 


127  CONSIDERATION — INVESTIGATION,    ETC.  §  313 

stances,  may  amount  to  an  election  to  purchase  on 
the  one  hand,  or  on  the  other,  place  the  optionee 
in  a  position  to  invoke  the  equitable  rule  of 
estoppel  against  the  optionor.  In  either  of  the 
above  cases,  the  result  is  much  the  same  as  if,  in 
the  first  instance,  the  option  contract  had  been  sup- 
ported by  a  consideration,  provided,  of  course, 
that,  prior  to  the  act  of  the  optionee  which  consti- 
tutes the  election,  or  raises  the  estoppel  in  his 
favor,  the  optionor  has  not  withdrawn  the  option 
privilege. 

Thus,  where  the  optionee  constructed  buildings, 
sank  a  well,  kept  the  fences  in  repair  and  paid  the 
taxes,  it  was  held  such  acts  constituted  a  sufficient 
consideration  to  support  the  option  contract.^ 

Sec.  313.  INVESTIGATION  OF  PROP- 
EETY,  ETC.— The  mere  fact  the  optionee  has 
incurred  expense  in  the  investigation  and  exami- 
nation of  the  optioned  property,  does  not  consti- 
tute a  consideration  for  the  option  contract,^  where 
the  contract  imposes  no  such  condition  and  the 
optionee  made  the  investigation  for  his  own  inf or- 
mation." 

2  Mix  V.  Balduc,  78  111.  215,  holding  the  acts  stated  in  the  text  gave  the 
agreement  mutuality,  but  the  facts  were  such  that  the  court  was 
justified  in  holding  the  optionor  estopped. 

iCorbett  v.  Cronkhite,  239  HI.  9,  87  N.  E.  874;  Axe  v.  Tolbert,  179  Mich. 
556,  146  N.  W.  418;  Bosshardt  &  Wilson  Co.  v.  Crescent  Oil  Co., 
171  Pa.  109,  32  Atl.  1120. 

2Comstock  Bros.  v.  North,  88  Miss.  754,  41  So.  374;  Gillespie  v.  Edmon- 
ston,  11  Hump.  (Tenn.)  553,  option  on  slave;  see  Penn.  Match  Co. 
V.  Hapgood,  141  Mass.  145,  7  N.  E.  22,  formation,  etc.,  of  corporation. 
Mere  receiving  of  writing  (exclusive  authority  to  sell)  and  trying  to 
sell  is  not  consideration,  Stensgaard  v.  Smith,  43  Minn.  11,  44  N.  W. 
669,  19  A.  S.  E.  205. 


§  314  LAW  OF  OPTION  CONTRACTS  128 

An  option  was  given  on  a  vessel  and  contem- 
plated an  examination  of  the  vessel  before  accep- 
tance. The  option,  however,  was  not  conditioned 
that  the  owner  would  sell  absolutely  if  the  vessel 
was  found  as  represented.  Nor,  was  the  purchaser 
bound  to  purchase  if  he  made  the  examination. 
After  the  purchaser  had  incurred  the  expense  of 
employing  an  expert  to  make  the  examination  and 
before  acceptance,  the  owner  withdrew  the  option, 
and  it  was  held  the  owner  had  such  right,  as  the 
examination  by  the  purchaser  did  not  inure  to  the 
owner's  benefit,  and,  therefore,  did  not  constitute 
any  consideration  for  the  option  contract.* 

Sec.  314.  STIPULATION  IN  OPTION 
AGREEMENT  BINDING  OPTIONEE  TO 
PERFORM. — Clearly,  under  the  rule,  a  promise 
in  the  agreement  binding  on  the  optionee  to  per- 
form some  act,  the  performance  of  which  will  be 
a  real  benefit  to  the  optionor  or  a  real  detriment 
to  the  optionee,  furnishes  sufficient  consideration 
for  the  agreement.  Thus,  an  agreement  giving  an 
option  to  purchase  lands,  and  providing  that  the 
optionee  shall,  during  the  term,  build  a  house  on 
the  land  and  pay  taxes  thereon,  furnishes  a  good 

8  Ganss  v.  Company,  110  N.  Y.  S.  176,  125  App.  Div.  760.  The  court 
said :  ' '  Any  other  construction  of  the  option  would  destroy  the  legal 
character  of  the  option  .  .  .  and  make  it  a  binding  contract  of  sale 
without  acceptance,  simply  upon  the  holder's  doing  some  act  or 
expending  some  money,  however,  little,  in  the  course  of  his  inspection 
to  determine  whether  or  not  he  held  a  desirable  offer. ' ' 

Also  Peacock  v.  Deweese,  73  Ga.  570,  testing  for  minerals;  also  Gordon 
V.  Darnell,  5  Colo.  302,  taking  possession  without  objection  from 
optionor. 

Tests  for  oil,  Illinois  Kaolin  Co.  v.  Goodman,  252  111.  99,  96  N.  E.  867. 


129  CONSIDERATION — STIPULATION  TO  REPURCHASE  §  315 

and  sufficient  consideration  to  support  the  option/ 
An  oil  and  gas  lease  obligating  the  lessee  to  sink 
one  or  more  wells  within  eighteen  months  and  to 
commence  work  on  the  first  well  within  six  months 
from  the  date  of  the  contract,  is  based  on  a  suffi- 
cient consideration.^ 

Sec.  315.  STIPULATION  TO  REPUR- 
CHASE OR  RESELL.— A  provision  in  a  con- 
tract for  the  sale  and  purchase  of  land  obligating 
the  vendee  to  reconvey  to  the  vendor  on  certain 
contingencies,  is  valid.  The  consideration  for  such 
provision  exists  in  the  original  agreement  to  con- 
vey.' 

A  land  company  entered  into  a  contract  with  a 
sales  company  by  which  the  latter  was  given  the 
right  to  sell  the  land  upon  certain  terms  and  con- 
ditions and  within  a  certain  time.  The  contract 
further  provided  that  if  the  land  was  not  all  sold 
within  the  stipulated  time  the  sales  company 
agreed  to  purchase  the  unsold  portions,  at  the 
option  of  the  land  company,  and  it  was  held  the 
several  provisions  of  the  agreement  were  depen- 

iStansbury  v.  Fringer,  (Md.)  11  Gill  &  J.  149;  see  Gordon  v.  Darnell, 
5  Colo.  302. 

2  Great  Western  Oil  Co.  v.  Carpenter,  43  Tex.  Civ.  App.  229,  95  S.  W.  57, 
distg.  National  Oil  etc.  Co.  v.  Teel,  (Tex.  Civ.  App.)  67  S.  W.  545, 
affirmed  in  95  Tex.  586,  68  S.  W.  979. 

1  Peterson  v.  Chase,  115  Wis.  239,  91  N.  W.  687;  Eohling  v.  Thole,  256 
ni.  425,  100  N.  E.  138. 
But  this  rule  does  not  apply  to  option  to  redeem  from  purchaser  on 
execution  sale,  Mers.  v.  Insurance  Co.,  68  Mo.  127. 

9 — Option   Contracts. 


§  316  LAW  OF  OPTION  CONTRACTS  130 

dent  and  furnished  "ample  consideration"  for  the 
option  agreement  in  favor  of  the  land  company.^ 

Where  a  deed  is  made  conveying  land  for  a  cer- 
tain price  and,  at  the  same  time  and  for  the  same 
consideration,  a  separate  agreement  is  made  by  the 
grantors  in  the  deed,  to  convey  to  the  grantee  an 
adjacent  lot  under  an  option  to  the  grantee  to  have 
the  first  privilege  of  purchasing,  at  the  fair 
market  price  if  the  grantor  sells,  the  deed  and 
agreement  will  be  construed  as  one  contract  and  as 
furnishing  a  consideration  for  both  agreements.* 

Sec.  316.  SAME.  SHAEES  OF  STOCK.— An 

agreement  by  a  subscriber  to  stock  to  give  defen- 
dant a  preferred  right  to  buy  it,  is  a  sufficient  con- 
sideration for  an  agreement  of  defendant  to  pay 
dividends  on  the  stock  and,  at  the  subscriber's 
option,  to  buy  the  stock,  the  promise  of  the  one 
being  an  adequate  consideration  for  the  promise 
of  the  other.  ^ 

Where  a  number  of  persons,  for  the  purpose  of 
inducing  others  to  subscribe  for  capital  stock  in 
a  manufacturing  company,  in  which  all  such  per- 
sons were  interested,  executed  an  agreement  stipu- 
lating upon  thirty  days'  notice  to  pay  each  sub- 

2  Wilcox  etc.  Co.  v.  Stewart,  107  Minn.  85,  119  N.  W.  504;  also  Sixta  y. 
Land  Co.,  157  Wis.  293,  147  N.  W.  1042. 
Eaiche  v.  Morrison,  47   Mont.  127,   130  P.   1074,  s.  c.   37   Mont.  244, 
95  P.   1061,  option  to  repurchase  shares  of  stock;   also  Cothran  v. 
Witham,  123  Ga.  190,  51  S.  E.  285. 

8  Myers  v.  Metzger,  61  N.  J.  Eq.  522,  48  Atl.  1113,  reversed  on  other 
grounds,  63  N.  J.  Eq.  779,  52  Atl.  274;  see  Eice  v.  Lincoln  etc.  R. 
Co.,  88  Neb.  307,  129  N.  W.  425. 

1  Vickery  v.  Maier,  164  Cal.  384,  129  P.  273. 


131  CONSIDERATION — SHARES  OF  STOCK  §  317 

scriber  par  value  for  his  stock,  the  fact  that  the 
makers  of  such  agreement  were  residents  of  the 
town  in  which  the  manufacturing  establishment 
was  to  be  located,  interested  in  its  growth  and 
development,  and  jointly  interested  as  subscribers 
in  the  furtherance  of  the  common  undertaking, 
was,  in  law,  a  sufficient  consideration  to  support 
the  agreement.^ 

A  contract,  whereby  one  party  agreed  to  pay  the 
other  eight  per  cent  on  the  stock  of  the  latter  in 
a  corporation,  from  date  of  issue  of  stock  to  date 
of  purchase,  provided  such  stock  did  not  pay  that 
amount  of  interest  or  better,  and  agreed  to  pur- 
chase the  stock  at  any  time  the  seller  wished  to 
dispose  of  it,  at  par  value,  within  one  year  from 
the  date  of  the  agreement,  and  whereby  the  other 
was  to  permit  the  buyer  to  control  and  vote  the 
stock  from  and  after  the  date  of  the  agreement,  in 
all  meetings  of  stockholders,  the  seller  to  be  paid 
by  the  buyer  a  full  return  of  all  money  invested 
by  him  in  the  stock  with  interest  thereon,  is  not 
unilateral.^ 

Sec.  317.  DOUBLE  AGREEMENTS.— It  is  a 
rule  in  the  law  of  contracts  that  where  a  contract 
consists  of  several  distinct  and  separate  stipula- 
tions on  one  side  and  a  legal  consideration  is  stated 
on  the  other,  it  must  be  considered  that  the  entire 
contract  was  in  contemplation  of  the  parties  and 
that  each  particular  stipulation  formed  one  of  the 
inducements  therefor,  and  that,  therefore,  it  is 

2  Rogers  v.  Burr,  105  Ga.  432,  31  S.  E.  438,  70  A.  S.  E.  50. 

3  Hardin  v.  Case,  134  Ga.  813,  68  S.  E.  648. 


§  318  LAW  OF  OPTION  CONTRACTS  132 

supported  by  the  cousideration.^  This  rule  is 
particularly  applicable  to  agreements  grantiug 
options. 

Accordingly,  where  plaintiff,  by  one  entire  con- 
tract, purchased  of  defendant,  a  certain  quantity 
of  logs,  at  a  certain  price,  and,  also,  purchased  of 
defendant  another  quantity  of  logs,  at  another 
agreed  price,  but  reserved  the  right  to  refuse  to 
accept  the  latter  quantity  unless  they  arrived  at 
the  boom  at  a  certain  time,  the  price  for  the  first 
quantity  of  logs  furnished  consideration  for  the 
option  upon  the  second  quantity.^ 

So,  where  the  agreement  was  to  convey  a  certain 
tract  of  land  with  option  to  the  purchaser  to  take 
additional  land,  the  money  consideration  paid  by 
the  optionee  was  a  sufficient  consideration  for  both 
the  agreement  to  convey  and  the  option.^ 

Sec.  318.  OPTION  AS  CONSIDERATION 
FOR  OTHER  CONTRACT.— Plaintiff  gave  de- 
fendant an  option  to  purchase  his  interest  in  shares 
of  a  certain  railroad  corporation.  Subsequently,  by 
the  terms  of  a  contract  which  recited  it  was  explana- 
tory and  supplemental  to  the  option,  the  defendant 

1  Stansbury  v.   Fringer,    (Md.)    11   Gill   &  J.   149;   Rease   v.   Kittle,   56 

W.  Va.  269,  49  S.  E.  150,  153. 

2  Harper  v.  Runner,  85  Neb.  343,   123  N.  W.  313;   Bacon  v.  Kentucky 

Cent.  Ry.  Co.,  95  Ky.  373,  25  S.  W.  747,  16  Ky.  L.  Rep.  77;  Staples 
V.  O'Neal,  64  Minn.  27,  65  N.  W.  1083. 

8  Rice  V.  Lincoln  etc.  R.  Co.,  88  Neb.  307,  129  N.  W.  425;  also  Myers  v. 

Metzger,  61  N.  J.  Eq.  522,  48  Atl.  1113,  reversed  on  other  grounds 

in  63  N.  J.  Eq.  779,  52  Atl.  274. 
Also  Heyward  v.  Willmarth,  84  N.  Y.  S.  75,  87  App,  Div.  125,  lease 

with  option  on  adjoining  tract. 
Also  Harper  v.  Runner,  supra,  lease  and  option. 


133  CONSIDERATION OTHER    CONTRACT   AS  §  319 

agreed  to  purchase  and  pay  for  the  same  shares. 
The  defendant  breaching  the  second  contract, 
plaintiff  brought  suit  and  the  defense  was  want  of 
consideration.  It  was  held  the  second  contract 
must  be  regarded  as  supplemental  to  the  option 
and  that,  therefore,  no  consideration  was  shown 
for  the  defendant's  promise  to  purchase  the  shares, 
the  theory  being,  that  the  promise  of  the  defendant 
was  one  to  perform  an  existing  contract  obligation 
on  his  part.^ 

An  assignment  of  an  interest  in  an  option  for 
the  purchase  of  land  is  a  valid  consideration  for  a 
promissory  note.^ 

Sec.  319.  OTHER  CONTEACT  AS  CONSID- 
ERATION FOR  OPTION.-By  written  agree- 
ment, plaintiff  agreed  to  relieve  defendant  from 
the  necessity  of  furnishing  security  on  notes  given 
for  land  sold  at  public  auction  under  a  court 
decree,  and  defendant  agreed  to  give  plaintiff  the 
privilege  of  buying  the  land  from  him  at  a  specified 
price  and  within  a  specified  time  if  he  should  elect 
so  to  do,  and  it  was  held  the  option  privilege  was 
not  void  as  being  without  consideration,  as  the 
assent  of  plaintiff  to  confirmation  of  the  sale  to 
defendant,  without  sureties  on  his  purchase  notes, 
was   a   valuable   consideration.    In   other  words, 

1  Wescott  V.  Mitchell,  95  Me.  377,  50  Atl.  21. 

See  Pattillo  v.  Jones,  113  Ga.  330,  38  S.  E.  745,  pledging  option  as 
consideration  for  another  contract. 

2  Hanna  v.  Ingram,  93  Ala.  482,  9  So.  621. 


§  320  LAW  OF  OPTION  CONTRACTS  134 

there  was  a  surrender  of  a  legal  right  by  plaintiff 
and  a  corresponding  real  benefit  to  the  defendant/ 

An  agreement  giving  the  owner  of  cows  the  use 
of  $1000  theretofore  deposited  with  him  by  plain- 
tiff, is  a  sufficient  consideration  for  an  option  to 
purchase  the  cows  given  by  defendant  to  plaintiff." 

So,  also,  is  an  agreement  by  the  optionee  to  bear 
a  share  of  the  expense  of  farming  the  optioned 
land  during  the  time  limit  of  the  option.^ 

An  agreement  to  sell  is  sufficient  consideration  to 
support  a  promise  to  pay  an  agreed  price  for  an 
option  to  purchase  a  mining  claim/ 

The  grant  of  a  franchise  by  a  municipal  cor- 
poration is  consideration  for  an  option  therein 
reserved  for  additional  electric  power  for  munici- 
pal purposes/ 

Sec.  320.  OTHER  CONTRACT  NOT  CON- 
SIDERATION FOR  OPTION.— On  the  other 
hand,  an  agreement  by  an  agent  authorized  to  sell 
land  that  he  will  endeavor  to  sell  it  at  a  fixed  net 

1  Bradford  v.  Foster,  87  Tenn.  4,  9  S.  W.  195. 

.  Also  McKeen  v.  Harwood,  15  Ala.  792,  holding  waiver  of  option  to 
rent  building  is  consideration  for  option;  Great  Western  Oil  Co.  v. 
Carpenter,  43  Tex.  Civ.  App.  229,  95  S.  W.  57,  holding  release  of 
prior  oil  and  gas  lease  is  consideration  for  second  lease. 
Moore  v.  Detroit  L.  Works,  14  Mich.  266,  holding  option  to  deliver,  or 
not  to  deliver,  engine  is  consideration  to  support  agreement  to  dis- 
charge contract. 

2  Western  U.  T.  Co.  v.  Williams,  57  Tex.  Civ.  App.  267,  137  S.  W.  148 ; 

also  Donahue  v.  Potter  &  George  Co.,  63  Neb.  128,  88  N.  W.  171. 

3  Stein  v.  Leeman,  161  Cal.  502,  119  P.  663. 

4  Morris  v.  Lagerfelt,  103  Ala.  608,  15  So.  895. 

.'.  City  of  Colorado  Springs  v.  Pikes  Peak  Hydro-Electric  Co.,  67  Colo.  169, 
140  P.  921. 


135  CONSIDERATION — OPTIONS  IN  LEASES  §  321 

price  to  the  owner,  is  not  sufficient  consideration 
for  the  granting  of  an  option  to  the  agent  to  pur- 
chase the  land,  at  that  price,  within  a  certain  time, 
as  the  contract  is  a  mere  proposal  to  sell  and 
revocable  by  the  owner  at  any  time  before  the  land 
is  sold,  or  the  exercise,  by  the  agent,  of  his  option 
to  purchase.^  So,  with  reference  to  a  void  oral 
agreement  by  the  terms  of  which  the  optionee 
agrees  to  go  out  and  create  a  market  for  the 
optioned  land.^ 

An  agreement  of  sale  and  purchase  of  a  certain 
lot  on  which  is  endorsed,  or  written,  an  option  to 
purchase  an  adjacent  lot,  is  not  a  consideration 
for  the  latter.* 

Sec.  321.  LEASES.— The  rule  is  that  the  con- 
sideration to  support  the  option  contract  must  be 
separate  and  apart  from  the  consideration  to  sup- 
port the  agreement  of  sale,^  but  in  many  contracts, 
like  leases,  the  legal  presumption  is  that  the  rental 
was  fixed  or  agreed  upon  with  a  view  of  the  exer- 
cise of  the  option  privilege,  thus  furnishing  a  con- 
sideration for  the  option  contract.^ 

iJolliffe  V.  Steele,  9  Cal.  App.  212,  98  P.  544,  the  real  ground  in  this 
case  is  that  the  agreement  to  sell  being  personal,  could  not  be 
enforced  against  the  agent;  see  Smith  v.  Cauthen,  98  Miss.  746,  54 
So.  844;  Kolb  v.  Bennett  L.  Co.,  74  Miss.  567,  21  So.  233. 

2  Reigart  v.  Coal  &  Coke  Co.,  217  Mo.  142,  117  S.  W.  61. 

a  Davis  V.  Shaw,  21  Ont.  L.  Rep.  474,  15  Ont.  Wkly.  Rep.  134,  16  Ont. 
Wkly.  Rep.  273. 

1  Williams  v.  Graves,  7  Tex.  Civ.  App.  356,  26  S.  W.  334;  Ide  v.  Leiser, 

10  Mont.  5,  24  P.  695,  24  A.  S.  R.  17 ;  Stigler  v.  Jaap,  83  Miss.  351, 
35  So.  948;  Crystal  Lake  Cemetery  Ass'n  v.  Farnham,  129  Minn.  1, 
151  N.  W.  418. 

2  Hunter,  Matter  of,   (N.  Y.)   1  Edw.  Ch.'l;  Heyward  v.  Willmarth,  84 

N.  Y.  S.  75,  87  App.  Div.  125,  also  on  adjoining  land. 


§  321  LAW  OF  OPTION  CONTRACTS  136 

Leases  containing  options  to  purchase  furnish 
the  largest  class  of  contracts  under  consideration, 
but  the  same  principle  runs  through  all  classes.  If 
the  option  forms  part  of  a  lease,  the  consideration 
for  the  lease  furnishes  the  consideration  for  the 
option.^ 

As  aptly  said  by  the  Supreme  Court  of  Appeals, 
of  Virginia,  in  one  of  the  leading  cases  on  this  sub- 
ject,'' "A  man  may  be  willing  to  take  a  lease  with 
the  privilege  of  the  purchase  of  the  property  or  a 
renewal  of  the  lease,  but  unwilling  to  accept  it  in 

3  Monihon  v.  Wakelin,  6  Ariz.  225,  56  P.  735,  renewal ;  Gates  v.  McNeil, 

(Cal.)  147  P.  944;  Swanston  v.  Clark,  153  Cal.  300,  95  P.  1117; 
Williams  v.  Eldora  etc.  M.  Co.,  35  Colo.  127,  83  P.  780;  Walker  v. 
Edmunason,  111  Ga.  454,  36  S.  E.  800;  Stanwood  v.  Kuhn,  132  HI 
App.  466;  Hayes  v.  O'Brien,  149  HI  403,  37  N.  E.  73,  23  L.  E.  A. 
555 ;  Globe  Brewing  Co.  v.  Simon,  132  111  App.  198,  voluntary  offer 
to  renew  not  acted  upon;  O'Connor  v.  Harrison,  132  HI.  App.  264; 
Souffrain  v.  McDonald,  27  Ind.  269;  Wolf  v.  Lodge,  159  Iowa  162,  140 
N.  W.  429;  Overall  v.  Madisonville,  125  Ky.  684,  31  Ky.  L.  Kep.  278, 
102  S.  W.  278,  12  L.  R.  A.  (N.  S.)  433;  Murphy  v.  Hussey,  117  La. 
390,  41  So.  692 ;  Amiss  v.  Whitting,  121  La.  501,  46  So.  606 ;  Gustin 
v.  School  District,  94  Mich.  502,  54  N.  W.  156,  34  A.  S.  R.  361; 
Wright  v.  Kaynor,  150  Mich.  7,  113  N.  W.  779;  Murphy  v.  Anderson, 
128  Minn.  106,  150  N.  W.  387;  Elliott  v.  DeLaney,  217  Mo.  14,  116 
S.  W.  494;  Tebeau  v.  Ridge,  261  Mo.  547,  170  S.  W.  871;  Dengler  v. 
Fowler,  94  Neb.  621,  143  N.  W.  944;  Harper  v.  Runner,  85  Neb.  343, 
123  N.  W.  313;  Hawralty  v.  Warren,  18  N.  J.  Eq.  124,  90  Am.  Dec, 
613 ;  Waters  v.  Bew,  52  N.  J.  Eq.  787,  29  Atl.  590 ;  White  v.  Weaver, 
68  N.  J.  Eq.  644,  61  Atl.  25 ;  Feudtner  v.  Ross,  74  N.  J.  Eq.  214,  69 
Atl.  190;  Bullock  v.  Cutting,  140  N.  Y.  S.  686;  Pearson  v.  Millard, 
150  N.  C.  303,  63  S.  E.  1053 ;  Schroeder  v.  Gemeinder,  10  Nev.  355 ; 
Clarno  v.  Grayson,  30  Ore.  Ill,  46  P.  426,  working  mine,  proceeds  to 
optionor;  House  v.  Jackson,  24  Ore.  89,  32  P.  1027;  Tilton  v.  Sterling 
C.  Co.,  28  Utah  173,  77  P.  758,  107  A.  S.  R.  689;  Richardson  v. 
Harkness,  59  Wash.  474,  110  P.  9;  Brink  v.  Mitchell,  135  Wis.  416, 
il6  N.  W.  16,  rent  to  be  applied  on  price;  Rease  v.  Kittle,  56  W.  Va. 
269,  49  S.  E.  150;  Frank  v.  Stratford-Handcock,  13  Wyo.  37,  77  P. 
134,  110  A.  S.  R.  963,  67  L.  R.  A.  571;  Mathews  Slate  Co.  v.  New 
Empire  Slate  Co.,  122  Fed.  972;  Federal  Oil  Co.  v.  Western  Oil  Co., 
112  Fed.  373. 

4  Rease  v.  Kittle,  56  W.  Va.  269,  49  S.  E.  150. 


137  CONSIDERATION — DEPOSIT   AND   PART   PAYMENT  §  322 

any  other  way.  The  option  of  purchase  inserted  in 
the  lease  is  the  inducement  to  the  contract  on  both 
sides.  Without  it  the  owner  is  unable  to  procure  a 
contract  of  lease,  and  but  for  it  the  lessee  would 
not  take  the  property.  His  purpose  may  be  to 
build  up  a  mercantile  or  other  kind  of  business, 
with  a  view  to  permanent  location  if  he  succeeds, 
and  with  the  intention  to  purchase  if  he  does  suc- 
ceed, and  the  wish  to  be  free  to  abandon  the  prop- 
erty at  the  end  of  his  term  if  his  experiment  should 
prove  to  be  unsuccessful.  It  is  a  partially  executed 
contract  so  far  as  he  is  concerned,  for  by  taking 
the  lease  he  has  paid  for  that  right  of  purchase, 
and,  ha^'ing  secured  it,  may  exercise  it  or  abandon 
it  at  his  pleasure.*' 

Sec.  322.  DEPOSIT  AND  PART  PAYMENT 
OF  PRICE.— The  option  contract,  as  we  have 
seen,  is  separate  and  distinct  from  the  agreement 
of  sale  and  purchase.  The  option  contract,  there- 
fore, must  have  a  consideration  to  support  it  inde- 
pendently of  the  price  to  be  paid  for  the  land  under 
the  agreement  of  sale,  but  it  does  not  follow  that 
because  money  paid  by  the  optionee  at  the  time 
of  the  execution  of  the  option  contract  is  to  be 
applied  on  the  price,  such  payment  does  not  fur- 
nish consideration  for  the  option  contract.  The 
application  or  credit  of  such  payment  on  account 
of  the  price  is  a  secondary  matter.  The  question  is 
whether,  in  the  first  instance,  the  money  was  paid 
as  consideration  for  the  option  contract.^ 

1  Ide  V.  Leiser,  10  Mont.  5,  24  P.  695,  24;  A.  S.  E.  17. 

Therefore,  a  stipulation  to  pay  interest  on  the  price  is  not  a  considera- 
tion to  support  the  option,  Moise  v.  Company,  79  Neb.  124,  112 
N.  W.  372. 


§  322  LAW  OF  OPTION   CONTRACTS  138 

Thus,  the  optionee  agreed  to  pay  $1000  to  the 
optionor  at  the  expiration  of  one  year,  for  the 
privilege  of  purchasing  a  distillery  at  the  price  of 
$5000,  provided  he  did  not  purchase,  and  if  he  did, 
then  the  $1000,  by  the  terms  of  the  option,  were  to 
be  applied  on  the  purchase  price  of  the  distillery, 
and  it  was  held  there  was  consideration  for  the 
option.^ 

Defendant,  in  consideration  of  $2000  paid,  gave 
plaintiff  an  option  to  purchase  certain  land  and  it 
was  stipulated  that  if  defendant  did  not,  before  the 
expiration  of  the  option  time  limit,  make  a  certain 
payment  on  account  of  the  price,  the  agreement 
should  be  void  and  plaintiff  should  retain  the 
$2000.  The  $2000  was  a  part  of  a  $20,000  payment 
required  by  the  terms  of  the  option.  It  was  held 
there  was  consideration  for  the  option.* 

Where,  by  the  terms  of  an  option,  the  money 
paid  down  was  to  be  forfeited  to  the  optionor  in 
case  the  optionee  failed  to  complete  the  purchase 
in  accordance  with  the  terms  of  the  option,  the 
money  so  paid  furnishes  a  consideration  for  the 
option."*  So  where,  under  an  option  to  purchase 
iixtures,  the  optionee  deposited  a  certain  sum 
which,  by  the  terms  of  the  option,  was  to  be  paid 

-*  Grabenhorst  v.  Nicodemus,  42  Md.  236. 

3  Kingsley  v.  Kressly,  60  Ore.  167,  118  P.  678,  Anno,  cases  1913E,  746, 

the  Court  saying:  "It  is  true  the  $2000  was  to  constitute  part  of 
the  purchase  price  if  the  sale  was  completed  but  the  same  was  plain- 
tiff's (optionor 's)  money  in  either  case,"  that  is,  whether  or  not 
plaintiff  elected. 

4  Woodward  v.  Davidson,  150  Fed.  840,  reversed  on  other  grounds,  156 

Fed.  915. 


1  39  CONSIDERATION — DEPOSIT   AND  PART  PAYMENT  §  323 

to  the  owner  if  the  optionee  did  not  purchase.' 
So,  also,  where  there  was  an  option  reciting  the 
receipt  of  $10  as  a  deposit  and  providing  for  the 
payment  of  the  balance  of  $560  on  delivery  of  the 
deed,  although  there  was  no  express  stipulation 
forfeiting  the  deposit  to  the  optionor  in  the  event 
of  the  failure  of  the  optionee  to  elect.^ 

Sec.  323.  SAME.  CONTINUED.  THE  TEST. 
— The  test  is  whether  the  money  paid  is  the  prop- 
erty of  the  optionor  irrespective  of  an  election  by 
the  optionee.^  Consequently,  if  the  option  provides 
that  upon  failure  of  the  optionee  to  elect,  the 
moneys  paid  shall  be  returned  to  the  optionee,  then 
clearly  the  option  is  without  consideration. 

Thus,  under  an  option  acknowledging  the  receipt 
of  $300  on  account  of  the  purchase  price  of  $10,000 
for  certain  land,  and  providing  that  the  optionor 
should  furnish  an  abstract  of  title  and  warranty 
deed  conveying  a  marketable  title  satisfactory  to 
the  attorney  of  the  optionee,  and  if  not  satisfactory, 
the  optionor  should  return  the  $300  payment,  the 

5  Nagel  V.   Cohn,   112   N.  Y.   S.   1066,  the  ovraer  also   deposited  a  like 

amount  to  be  paid  to  the  optionee  in  the  event  of  the  owner 's  failure 
to  sell. 

6  Copple  V.  Aigeltinger,  167  Cal.  706,  140  P.  1073,  not  following  Leuschner 

V.  Duff,  7  Cal.  App.  721,  95  P.  914. 

In  Estes  v.  Furlong,  59  lU.  298,  it  was  held  that  payment  made  at  the 
date  of  the  option  should  be  regarded  as  payment  on  the  price  and 
also  as  a  consideration  for  the  option. 

In  Taylor  v.  Newton,  152  Ala.  459,  44  So.  583,  it  was  held  a  subse- 
quent part  payment  on  the  price  furnished  consideration  for  the 
option. 

1  Kingsley  v.  Kressly,  60  Ore.  167,  118  P.  678,  Anno,  cases  1913E,  746 ; 
Leuschner  v.  Duff,  7  Cal.  App.  721,  95  P.  914,  not  followed  in  Copple 
V.  Aigeltinger,  167  Cal.  706,  140  P.  1073. 


§  324  LAW  OF  OPTION  CONTRACTS  '    140 

payment  does  not  constitute  a  consideration  for  the 
option. - 

Sec.  324.  ADEQUACY.— At  law,  in  the  absence 
of  fraud  or  mistake,  the  slightest  consideration  is 
sufficient  to  support  the  most  onerous  contract  obli- 
gation.^ In  other  words,  adequacy  of  consideration 
is,  as  a  rule,  immaterial.  Courts  of  equity  follow 
the  rule  of  law,  but  view  inadequacy  of  considera- 
tion as  a  circumstance  indicating  fraud,  or  as  char- 
acterizing the  transaction  as  unfair,  in  which  cases, 
specific  performance  will  not  be  granted  if  the 
inadequacy  be  so  gross  as  to  be  evidence  of  fraud. 

2  Friendly  v.  Elwert,  57  Ore.  599,  112  P.  1085,  s.  c.  105  P.  404;  also 
Mossie  V.  Cyrus,  61  Ore.  17,  119  P.  485. 
The  text  is  based  on  the  Oregon  case  cited,  but  it  would  seem  the  rule 
should  be  limited  to  cases  where,  by  the  terms  of  the  option,  the 
optionee  may  arbitrarily  reject  the  title.  If  the  optionee  may  not 
reject  the  title  except  upon  some  ground  sufficient  in  law,  that  is, 
on  the  ground  that  the  title  is  not  marketable  within  the  rule,  it  is 
not  apparent  why  deposit  or  payment  on  the  price,  in  such  case,  is 
not  a  consideration,  even  though  it  is  to  be  returned  to  the  optionee 
in  the  event  the  title  is  found  unmarketable.  See  Simmons  v.  Zim- 
merman, 144  Cal.  256,  79  P.  451,  1  Ann.  Cas.  850. 

1  Brewer  v.  Sowers,  118  Md.  681,  86  Atl.  228;  Lawrence  v.  McCalmont, 
43  U.  S.  426,  11  L.  Ed.  326. 
•  Rease  v.  Kittle,  56  W.  Va.  269,  49  S.  E.  150,  153,  noting  as  an  excep- 
tion an  exchange  of  money. 

Price  V.  Jones,  105  Ind.  543,  5  N.  E.  683,  55  Am.  Eep.  230,  when  of 
indeterminate  value,  court  will  not  substitute  its  judgment  for  that 
of  contracting  parties. 

Blake  v.  Blake,  7  Iowa  46,  if  bona  -fide,  no  matter  how  slight  or  insig- 
nificant, it  is  sufficient;  but  where  inadequacy  of  consideration  is  so 
gross  as  to  create  a  presumption  of  fraud,  the  contract  founded 
thereon  will  not  be  enforced,  but,  in  such  case,  it  is  the  fraud  and  not 
the  inadequacy  which  invalidates  the  contract ;  also.  Rice  v.  Gibbs,  33 
Neb.  460,  50  N.  W.  436;  see  Kennedy  v.  Shaw,  43  Mich.  359,  5  N.  W. 
396;  Caplice  v.  Kelley,  27  Kan.  359. 

The  contract  must  not,  of  course,  be  unconscionable;  a  consideration 
of  one  cent  will  not  support  a  promise  to  pay  $600,  Schnell  v.  Nell, 
17  Ind.  29,  7  Am.  Rep.  453 ;  Hubbard  v.  Coolridge,  42  Mass.  84. 


141  CONSIDERATION — ADEQUACY  §  324 

In  considering  adequacy  of  consideration  to  sup- 
port an  option  contract  it  is  necessary  to  keep  in 
mind  that  in  every  suit  for  specific  performance 
growing  out  of  an  option  contract,  there  are,  in 
fact,  two  separate  and  distinct  contracts,  namely, 
the  option  contract,  and  the  agreement  to  sell, 
resulting  from  the  election  of  the  optionee  to  pur- 
chase.^ The  considerations  for  the  two  contracts 
are  as  separate  and  distinct  as  the  contracts  them- 
selves.^ 

With  reference  to  the  agreement  to  sell,  where 
it  is  sought  to  have  it  specifically  enforced,  the  con- 
sideration must  be  adequate  in  accordance  with  the 
equitable  rule  on  that  subject.  In  other  words,  the 
sufficiency  of  the  consideration  to  support  an  option 
contract  is  tested  by  the  rule  at  law,  while  the  ade- 
quacy of  the  consideration  for  the  agreement  to  sell 
is  determined  in  accordance  with  well  established 
rules  of  equity.^ 

2  Walter  G.  Reese  Co.  v.  House,  162  Cal.  740,  124  P.  442;  Murphy  T.  & 

Co.  V.  Reid,  125  Ky.  585,  101  S.  W.  964,  31  Ky.  L.  Rep.   176,   10 
L.  R.  A.  (N.  S.)  195;  Stearnes  v.  Goad,  111  Va.  834,  69  S.  E.  1101. 

3  Smith  V.  Bangham,  156  Cal.  359,  104  P.  689,  28  L.  R.  A.  (N.  S.)  522; 

Rease  v.  Kittle,  supra. 

4  See  Heyward  v.  Bradley,  179  Fed.  325,  102  C.  C.  A.  509,  holding  the 

court,  in  its  discretion,  would  not  be  authorized  to  deny  specific  per- 
formance because  performance  of  the  contract,  independent  of  fraud, 
would  result  in  hardship  to  the  defendant,  there  being  no  circum- 
stance other  than  alleged  inadequacy  of  consideration  as  constituting 
Buch  hardship.  The  consideration  for  the  phosphate  mine  was 
$20,000  which,  after  exploration,  showed  the  deposit  to  be  worth 
$70,000;  see  also  O'Brien  v.  Boland,  166  Mass.  481,  44  N.  E.  602. 
The  rule  on  the  subject  is  summarized  in  Rease  v.  Kittle,  56  W.  Va. 
269,  49  S.  E.  150,  153,  thus:  "Inadequacy  of  consideration  is  no 
ground  for  refusing  to  enforce  a  contract  specifically  unless  it  is  so 
gross  as  to  amount  to  conclusive,  or  at  least  satisfactory  evidence  of 
fraud,  or  unless  accompanied  by  other  circumstances  going  to  show 
fraud."  See  Smith  v.  Bangham,  156  Cal.  359,  104  P.  689,  28  L.  R.  A. 
(N.  S.)  522;  Hamilton  v.  Hamilton,  162  Ind.  430,  70  N.  E.  535,  537; 
Lowther  Oil  Co.  v.  Guffey,  52  W.  Va.  88,  43  S.  E.  101. 


§  325  LAW  OF  OPTION   CONTRACTS  142 

Sec.  325.  NOMINAL  SUM  OF  MONEY. 
GENERALLY.— It  is  established  by  the  great 
weight  of  judicial  authority  that  a  nominal  sum  of 
money  is  a  sufficient  consideration  for  an  option 
contract,  meaning  thereby  that  an  option  contract 
supported  by  a  nominal  money  consideration  is  not 
revocable  by  the  optionor  during  its  time  limit. 

The  rule  is  without  qualification  as  a  matter  of 
strict  law  but  it  needs  explanation  in  view  of  the 
fact  that  there  are  a  few  decisions,  some  apparently, 
others  really,  which  either  hold  to  the  contrary,  or, 
in  particular  cases,  base  their  decisions  upon  this 
fact  when  the  record  before  them,  apart  from  the 
nominal  consideration,  showed  there  were  overrul- 
ing equitable  defenses,  or  legal  grounds,  which,  in 
themselves,  would  have  prevented  a  court  of  equity 
from  decreeing  specific  enforcement  of  the  contract 
at  the  suit  of  the  optionee.^ 

From  this  statement  it  is  not  to  be  inferred  that 
the  smallness  of  the  money  consideration  is  a  cir- 
cumstance which  a  court  of  equity  may  not  take 
into  consideration,  with  other  proper  matters  and 
defenses,  in  determining  the  right  to  have  specific 
performance.  Undoubtedly,  the  court  has  such 
right  and  certainly  it  is  its  duty  fully  and  carefully 
to  consider  every  fact  and  circumstance  in  the  case. 

1  It  must  not  be  inferred  we  are  taking  the  position  that  an  option  sup 
ported  by  a  nominal  or  any  other  kind  or  character  of  consideration, 
entitles  the  optionee  to  specific  performance  as  a  matter  of  course. 
The  rule  we  are  discussing  is  one  to  the  effect  that  a  nominal  sum  of 
money  paid  for  an  option  contract  renders  the  contract  irrevocable 
during  its  time  limit.  What  is  said  concerning  specific  performance 
is  by  way  of  application  of  the  rule,  for  it  is  also  true  that  an 
option  contract  may  have  a  consideration  to  support  it  meeting  nil 
the  requirements  of  the  law  and  still  be  one  which,  upon  equitable 
grounds,  a  court  of  equity  would  not  specifically  enforce. 


1^3  CONSIDERATION — NOMINAL  SUM   AS  §  326 

But  as  we  view  it,  a  nominal  money  consideration 
is  a  circumstance  merely  and  only.  A  defense  based 
upon  such  circumstance  as  the  only  evidence  of 
fraud,  or  unfair  dealing,  or  hardship,  must  fail.  In 
such  cases  a  court  of  equity,  in  accordance  with  its 
own  established  rule,  must  follow  the  law  on  the 
subject.^ 

The  subject  is  confused  to  a  certain  extent  by  the 
rule  applicable  to  the  recital,  in  the  option  contract, 
of  a  money  consideration,  or  the  acknow^ledgment 
of  receipt  of  a  money  consideration,  or  by  the  fact 
that  the  option  contract  is  under  seal.  Again,  in 
considering  oil  leases  and  mineral  licenses  and  like 
contracts  containing  options  to  purchase,  which 
give  possession  to  the  lessee,  permit  development 
work  and  provide  for  pajrment  of  rents,  or  royal- 
ties, and  of  ttimes  commute  development  work  upon 
payment  of  a  certain  amount,  the  overruling  equi- 
ties frequently  growing  out  of  such  contracts,  as 
well  as,  now  and  then,  the  speculative  character  of 
a  particular  transaction,  tend  strongly  to  induce 
courts  to  decline  to  grant  specific  enforcement,  not- 
withstanding the  presence  of  a  nominal  money 
consideration. 

In  the  next  following  sections,  having  first  cited 
the  decisions  to  sustain  the  rule  announced  in  this 
section,  we  shall  present  other  decisions,  touching 
the  matters  to  which  reference  has  been  made. 

Sec.  326.  DECISIONS  HOLDING  NOMINAL 
SUM  OF  MONEY  SUFFICIENT.— A  considera- 
tion of  fifty  cents  is  sufficient  to  support  an  option 

zLowther  Oil  Co.  v.  Guflfey,  52  W.  Va.  88,  43  S.  E.  101;  see  next  preced- 
ing section. 


§  326  LAW  OP  OPTION  CONTRACTS  144 

contract,  and  if  the  optionee  accepts  within  the 
time  limit  the  contract  will  be  specifically  enforced,^ 
and  so,  also,  are  twenty-five  cents  f  one  dollar  f  five 
dollars;^  twenty-five  dollars;^  fifty  dollars;^  one 
hundred  dollars/  One  dollar  is  a  consideration  for 
an  option  on  fifty  acres  of  land  at  $47.50  per  acre,^ 
and  is  likewise  a  consideration  for  an  option  on  two 
hundred  thirty-three  acres  of  land  at  $15  per  acre.^ 
So,  also,  $1  paid  at  the  execution  of  the  contract 
for  an  oil  and  gas  privilege  is  a  sufficient  considera- 
tion to  support  the  contract  in  its  entirety/*^ 

1  Ross  V.  Parks,  93  Ala.  153,  8  So.  368,  30  A.  S.  E.  47,  11  L.  R.  A.  148, 

holding  that   a  valuable   consideration   whether  adequate   or   not  is 
sufficient  to  prevent  withdrawal  for  the  fixed  time. 

2  Marsh  v.  Lott,  8  Cal.  App.  384,  97  P.  163. 

8  Smith  v.  Bangham,  156  Cal.  359,  104  P.  689,  28  L.  R.  A.  (N.  S.)  522; 
Black  V.  Maddox,  104  Ga.  157,  30  S.  E.  723 ;  Simpson  v.  Sanders,  130 
Ga.  265,  60  S.  E.  541;  Brown  v.  Fowler,  65  Ohio  St.  507,  63  N.  E. 
76 ;  Rease  v.  Kittle,  56  W.  Va.  269,  49  S.  E.  150 ;  Guyer  v.  Warren, 
175  111.  328,  51  N.  E.  580,  "As  the  parties  agree  to  sell  an  option 
to  buy  for  the  sum  of  $1  there  is  no  reason  why  such  an  expression 
of  consideration  is  not  an  adequate  one. ' ' 

4  Rice  V.  Gibbs,  33  Neb.  460,  50  N.  W.  436;  Tibbs  v.  Zirkle,  55  W.  Va. 

49,  46  S.  E.  701,  104  A.  S.  R.  977,  2  Ann.  Cas.  421;  Sims  v.  Lide,  94 
Ga.  553,  21  S.  E.  220. 

5  Mueller  v.  Nortmann,  116  Wis.  468,  93  N.  W.  538,  96  A.  S.  R.  997. 

6  Aiple-Hammelmann  Real  Estate  Co.  v.   Spelbrink,  211  Mo.  671,  111 

S.  W.  480,  14  Ann.  Cas.  652 ;  Johnston  v.  Trippe,  33  Fed.  530. 

7  Wright  V.  Suydam,  72  Wash.  587,  131  P.  239. 

8  Rease  v.  Kittle,  56  W.  Va.  269,  49  S.  E.  150 ;  Cummins  v.  Beavers,  103 

Va.  230,  48  S.  E.  891,  106  A.  S.  R.  881,  1  Ann.  Cas.  986. 

9  Adams  v.  Peabody  Coal  Co.,  230  111.  469,  82  N.  E.  645,  under  seal. 

10  Pittsburg  etc.  Co.  v.  Bailey,  76  Kan.  42,  90  P.  803;  see  Federal  Oil 
Co.  v.  Western  Oil  Co.,  112  Fed.  373;  Lowther  Oil  Co.  v.  Guffey,  52 
W.  Va.  88,  43  S.  E.  101. 


]-i5  CONSIDERATION — NOMINAL  SUM   AS  §  327 

Sec.  327.  DECISIONS  HOLDING  NOMINAL 
SUM  OF  MONEY  INSUFFICIENT.— In  a  Colo- 
rado case  a  sealed  option  to  purchase  land  recited 
a  consideration  of  one  dollar,  which,  in  fact,  was 
not  paid  or  agreed  to  be  paid.  The  Court  in  deny- 
ing the  specific  enforcement  of  the  contract  at  the 
suit  of  the  optionee  on  the  ground  that  the  election 
to  purchase  was  conditional  or  insufficient, 
remarked  that  the  recital  of  consideration  was  a 
matter  of  form,  but  that,  if  the  consideration  had 
been  actually  paid,  it  would  be  nominal  merely  and 
would  not  constitute  a  proper  or  fair  consideration, 
usually  considered  essential  to  a  suit  for  specific 
performance.^  It  is  very  evident  the  Court  errone- 
ously applied  to  the  option  contract  the  rule  appli- 
cable to  the  consideration  necessary  to  support  the 
agreement  of  sale  and  purchase. 

In  line  with  the  foregoing  decision,  is  one  from 
the  Kansas  City  Court  of  Appeals  where  it  was 
held  the  remission  of  a  notary's  fee  of  $3  due  the 
optionee  from  the  optionor,  was  not  sufficient  to 
support  an  option  to  a  broker  to  sell  the  land.  On 
rehearing  the  same  Court  remarked  that,  in  accor- 
dance with  the  authorities,  any  appreciable  consid- 
eration was  sufficient  to  support  the  contract  there 
in  question,  and  referring  to  the  case  in  hand,  said 
the  alleged  consideration  was  a  mere  pretext  and 

1  Rude  V.  Levy,  43  Colo.  482,  96  P.  560,  24  L.  E.  A.   (N.  S.)    91,  127 
A.  S.  R.  123. 

Axe  V.  Tolbert,  179  Mich.  556,  146  N.  W.  418,  cites  and  follows  Rude  v. 
Levy,  supra.  In  the  latter  case  the  writing  recited  the  receipt  of  a 
' '  valuable  consideration, ' '  but  no  consideration  was  actually  paid 
and  the  Court  very  properly  held  that  the  time  and  money  spent  by 
the  optionee  in  trying  to  sell  the  property  could  not  be  considered  as 
a  "siii)stantial  consideration."    See  Sec.  313. 

10 — Option  Contracts. 


§  328  LAW  OF  OPTION   CONTRACTS  146 

was  not  deemed  of  sufficient  importance  by  the 
parties  to  be  inserted  in  the  writing,  and  then 
affirmed  the  former  decision  denying  specific  per- 
formance on  the  ground  of  uncertainty  in  the  terms 
of  the  contract." 

The  Court  of  Appeal  in  Kentucky,^  referring  to 
an  option  to  purchase  land,  reciting  a  consideration 
of  $1  therefor,  held,  that,  while  there  are  authori- 
ties holding  a  consideration  of  $1  is  sufficient  to 
uphold  an  option,  it  is  not  disposed  to  go  that  far, 
saying  that  such  consideration  is  so  flagrantly  dis- 
proportionate to  the  value  of  the  privilege  in  the 
case  before  it — the  option  running  for  a  year — that 
it  was  merely  nominal  and  not  substantial.  In  this 
case  the  optionee  timely  and  properly  elected  and, 
on  that  ground,  the  judgment  of  the  lower  court 
sustaining  a  demurrer  to  the  petition  of  the 
optionee  for  specific  performance,  was  directed  to 
be  overruled. 

Sec.  328.  NOMINAL  SUM  AS  CONSIDERA- 
TION. OIL  AND  GAS  LEASES  AND 
LICENSES.^ — The  owner  granted  a  corporation, 

2  Wallace  v.  Figone,  107  Mo.  App.  362,  81  S.  W.  492. 

3  Murphy  T.  &  Co.  v.  Keid,  125  Ky.  585,  101  S.  W.  964,  31  Ky.  L.  Rep. 

176,  10  L.  E.  A.   (N.  S.)   195;   also  Stamper  v.  Combs,   (Ky.)    176 
S.  W.  178. 

1  It  should  be  noted  these  so  called  oil  and  gas  leases  are  not  always 
strictly  ' '  leases ' '  as  defined  and  treated,  in  the  law  of  landlord  and 
tenant.  They  are  ofttimes  in  the  nature  of  a  written  license  with  a 
grant  conveying  the  grantor's  interest  in  the  gas  or  oil  well,  condi- 
tioned that  gas  or  oil  be  produced  in  paying  quantities,  Dickey  v. 
Coffeyville  etc.  Co.,  69  Kan.  106,  76  P.  398;  or  depending  on  their 
terms,  mere  options,  Eisch  v.  Burch,  175  Ind.  621,  95  N.  E.  123,  or 
leases,  Barnsdall  v.  Bradford  Gas  Co.,  225  Pa.  338,  74  Atl.  207; 
Woodland  Oil  Co.  v.  Crawford,  55  Ohio  St.  161,  44  N.  E.  1093, 
34  L.  R.  A.  62. 


147  CONSIDERATION — NOMINAL  SUM   AS  §  328 

in  consideration  of  $1,  and  certain  stipulations  on 
its  part,  the  privilege  of  entry  on  the  land,  for  the 
term  of  10  years,  to  bore  gas  and  oil  wells,  and  in 
the  event  of  discovering  oil  or  gas  in  paying  quanti- 
ties, agreed  to  convey  the  title  to  the  products  for 
a  specified  royalty.  The  corporation  agreed  to  com- 
plete a  well  within  two  years  or  to  pay  a  rental  of 
25  cents  per  acre  until  a  well  was  completed  on  the 
premises.  There  was  a  provision  for  extension  of 
the  term  so  long  as  oil  or  gas  was  produced  in  pay- 
ing quantities  and  the  rental  was  paid,  and  also 
giving  the  corporation  the  right  to  surrender  the 
contract  at  any  time  and  be  discharged  from  all 
liability  for  non-fulfillment,  and  it  was  held  that 
the  amount  paid  at  the  execution  of  the  contract 
and  the  commutation  rental,  subsequently  paid, 
furnished  a  consideration  to  support  the  contract.^ 

In  another  case,  similar  to  the  above,  the  lease 
contained  a  forfeiture  clause  providing  that,  if  no 
well  was  completed  within  two  years  from  date,  the 
lease  or  grant  should  become  null  and  void  as  to 
both  parties,  but  giving  the  lessee  the  right  to  pre- 
vent such  forfeiture,  from  year  to  year,  by  paying 
annually,  in  advance,  a  certain  small  sum  until  the 
well  was  completed.  The  Court  held  the  effect  of 
this  clause  was  to  make  the  grant  a  lease  from  year 
to  year  at  the  option  of  the  lessee  until  oil  or  gas 
was  produced ;  that  while  $1,  the  recited  considera- 

2  Pittsburg  etc.  Co.  v.  Bailey,  76  Kan.  42,  90  P.  803,  citing  AUegheny  Oil 
Co.  V.  Snyder,  106  Fed.  764,  45  C.  C.  A.  604,  involving  a  similar 
lease  and  holding  that  the  recited  consideration  of  $1.00  supported 
not  only  the  leasehold  term  but  also  the  privilege  of  extending  the 
term  for  drilling  by  paying  the  stipulated  price  therefor.  In  the 
Kansas  case  there  was  no  suggestion  of  fraud  or  bad  faith ;  also  Pee 
V.  Ulrey,  233  HI.  56,  84  N.  E.  46. 


§  329  LAW  OF  OPTION  CONTRACTS  148 

tion,  was  small,  yet  it  was  valuable,  saying  the 
Court  could  not  say  it  was  inadequate,  under  the 
circumstances,  as  the  lessor  did  not  so  consider  it. 
There  was  no  fraud  charged,  and  the  Court  said 
that,  in  such  case,  inadequacy  of  consideration 
alone  is  not  sufficient  to  invalidate  the  lease.* 

Sec.  329.  NOMINAL  SUM  AS  CONSIDERA- 
TION. OIL  AND  OAS  LEASES  AND 
LICENSES,  CONTINUED.— In  a  Louisiana  case, 
the  oil  lease  recited  a  consideration  of  $1  as  paid, 
but  the  lessee  actually  paid  $50  in  cash  to  the  lessor 
as  consideration  at  the  time  of  its  execution.  The 
lease  was  for  a  term  of  10  years,  and  for  the  sole 
purpose  of  operating  for  oil  and  gas  on  40  acres  of 
land  owned  by  the  lessor,  lying  in  a  field  where  no 
oil  had  been  produced,  but  in  close  proximity  to 
property  having  oil  indications.  The  lessee  agreed 
to  begin  operations  within  six  months,  or  to  pay 
$50  quarterly,  in  advance,  for  each  three  months  of 
delay,  and  to  deliver  to  the  lessor  one-eighth  roy- 
alty. The  lease  provided  that  the  lessee  might,  at 
any  time,  surrender  and  cancel  the  lease  on  pay- 
ment of  $100.  Three  coromutation  payments  were 
made.  The  tender  of  the  fourth  payment  was  made 
four  days  after  the  date  stipulated,  and  was  refused 
on  the  ground  that  the  contract,  because  of  the 
delay,  had  been  forfeited.  Thereafter,  but  before 
any  steps  were  taken  to  enforce  the  forfeiture, 

3  Lowther  Oil  Co.  v.  Guffey,  52  W.  Va.  88,  43  S.  E.  101,  citing  McMillan 
V.  Phil.  Co.,  159  Pa.  142,  28  Atl.  220,  and  Allegheny  Oil  Co.  v.  Sny- 
der, supra;  see  South  Penn.  Oil  Co.  v.  Snodgrass,  71  W.  Va.  438,  76 
S.  E.  961,  43  L.  R.  A.  (N.  S.)  848. 


149  CONSIDERATION — NOMINAL   SUM  AS  §  329 

plaintiff,  the  transferee  of  the  lessee,  began  drilling 
a  well  on  the  property,  whereupon  he  was  enjoined, 
and  later  brought  a  suit  to  enforce  his  rights  under 
the  contract,  to  which  the  defendant,  claiming 
under  the  owner  and  lessor  of  the  land,  answered, 
and  set  up  the  defenses  that  the  contract  was  for- 
feited by  non-performance,  that  it  was  obtained  by 
fraud,  etc.,  and  that  the  consideration  was  inade- 
quate. 

On  the  original  hearing,  it  was  held  that,  in  the 
absence  of  any  allegation  connecting  plaintiff  with 
the  alleged  fraud,  the  testimony  offered  in  support 
of  this  defense  was  properly  excluded ;  that  the  law 
does  not  favor  forfeitures,  and  that,  consequently, 
the  contract  did  not  ipso  facto  become  forfeited  by 
reason  of  the  failure  of  the  lessee  to  drill  or  to  pay 
on  the  day  stipulated;  and  that  the  consideration 
for  the  contract  was  adequate. 

On  rehearing  it  was  held,  among  other  things, 
that,  since  the  sole  object  and  purpose  of  the  con- 
tract was  to  explore  the  land  for  oil  and  gas,  and 
the  contract,  by  its  terms,  left  the  lessee  at  liberty 
to  do  so  or  not,  at  his  option,  there  was  in  reality 
no  contract  binding  on  the  lessee.  The  Court  said 
the  real  and  only  consideration  for  the  contract,  on 
the  part  of  the  lessee,  was  the  obligation  to  develop, 
and  that  an  oil  development  lease  which  left  the 
lessee  free  not  to  develop  or  to  make  certain  peri- 
odical pajTnents,  is  held  by  the  courts  to  be  void 
for  want  of  mutuality  of  obligation,  and,  further, 
that  the  attempt  to  meet  and  circumvent  this  prin- 
ciple of  the  decisions  by  stipulating  for  and  paying 


§§  330,331  LAW  OF  OPTION  CONTRACTS  150 

as  a  consideration,  a  paltry  sum  of  one  or  two  dol- 
lars, had  been  made  in  vain/ 

Sec.  330.  NOMINAL  SUM  AS  CONSIDERA- 
TION. OIL  AND  GAS  LEASES  AND 
LICENSES,  CONTINUED.— A  lease  for  a  con- 
sideration of  $1  for  the  purpose  of  drilling  and 
operating  for  oil  and  gas  which  does  not  obligate 
the  lessee  to  commence  or  prosecute  such  opera- 
tions, and  which  he  may  terminate  at  his  pleasure 
without  compensation  to  the  lessor,  is  unconscion- 
able, and  will  not  be  enforced  where  the  only  con- 
sideration is  prospective  royalties,  and,  where  the 
lessee  fails,  for  eight  months,  to  commence  develop- 
ment, the  agreement  is  without  consideration.^ 

Sec.  331.  RECITAL  OF  CONSIDERATION. 

— The  general  rule  on  this  subject  is  that  a  mere 
recital  of  consideration  in  a  contract  not  under  seal 
is  not  conclusive,  and  that  parol  evidence  is  admis- 

1  Jennings-Heywood  Oil  Synd.  v.  Houssiere-Latreille  Oil  Co.,  119  La.  793, 
44  So.  481,  496,  two  judges  dissenting,  two  concurring  in  the  judg- 
ment and  one  concurring  in  a  separate  opinion,  on  the  ground  that, 
as  the  lessee  had  the  option  to  commence  boring  or  pay  in  advance, 
the  contract  was  breached  by  him  for  failure  to  tender  the  fourth 
quarterly  commutation  advance  at  the  stipulated  time,  and  the  con- 
currence of  the  majority  would  seem  to  indicate  the  decision  turned 
on  this  point;  see  Murray  v.  Barnhart,  117  La.  1023,  42  So.  489. 

1  Federal  Oil  Co.  v.  Western  Oil  Co.,  112  Fed.  373,  the  Court  saying: 
' '  The  consideration  would  be  so  trifling  compared  with  the  value  of 
the  leasehold  estate  as  to  shock  the  moral  sense. ' ' 
See  also  Berry  v.  Frisbie,  120  Ky.  337,  86  S.  W.  558,  27  Ky.  L.  Rep. 
724,  holding  a  recited  consideration  of  $1.00  insufficient  on  similar 
facts;  see  also  Litz  v.  Goosling,  93  Ky.  185,  19  S.  W.  527,  21  L.  R  A. 
127,  14  Ky.  L.  Rep.  91 ;  Marble  Co.  v.  Ripley,  10  Wall.  339,  19  L.  Ed. 
955;  Moffat  Coal  Co.  v.  Miller,  173  HI.  App.  408. 


151  RECITAL  OP  CONSIDERATION  §  331 

sible  either  to  show  want  of  any  consideration  or 
what  the  real  consideration  is.  And  this  rule  also 
obtains  with  reference  to  recital  of  payment  or 
receipt  of  consideration,  with  the  qualification, 
speaking  generally,  that  the  recital,  when  one  of  the 
essential  terms  of  the  contract,  may  not  be  contra- 
dicted for  the  purpose  of  defeating  its  operation/ 

In  accordance  with  the  rule,  the  real  considera- 
tion may  be  shown  notwithstanding  recital  of  a 
nominal  consideration.  Thus,  in  an  option  upon  a 
mine,  reciting  a  nominal  consideration  of  $1,  evi- 
dence was  admitted  to  show,  as  the  real  considera- 
tion, an  expenditure  of  some  $26,000  in  developing 
the  mine,^  and  it  is  also  admissible  to  show  want  of 
any  consideration  for  the   option,   or  fraud,   or 

X  Wellmaker  v.  Wheatley,  123  Ga.  201,  51  S.  E.  436,  evidence  not  admis- 
sible to  show  that  consideration  expressed  applied  only  to  the  lease 
and  not  to  the  lease  and  option;  see  Watkins  v.  Robertson.  105  Va. 
269,  54  S.  E.  33,  115  A.  S.  R.  880,  5  L.  R.  A.  (N.  S.)  1194;  Fuller 
V.  Artman,  69  Hun.  546,  2  N.  Y.  S.  13,  53  N.  Y.  St.  Rep.  339,  also 
under  seal. 

When  an  essential  term,  Pickett  v.  Green,  120  Ind.  584,  22  N.  E.  737. 

The  acknowledgment,  in  an  oil  and  gas  lease,  of  payment  of  a  specified 
consideration,  can  not  be  contradicted  for  the  purpose  of  impairing 
its  legal  effect  as  a  conveyance,  or  of  invalidating  the  instrument, 
Poe  V.  Ulrey,  233  HI.  56,  84  N.  E.  46,  action  to  annul  lease. 

As  to  effect  of  recital,  see  National  Oil  etc.  Co.  v.  Teel,  95  Tex.  586, 
68  S.  W.  979. 

In  Watkins  v.  Robertson,  supra,  it  is  said  the  English  rule  is  that  the 
recital  of  a  valuable  consideration  in  a  deed  is  conclusive;  that  in 
the  United  States  it  is  open  to  question  or  explanation  for  many 
purposes  but  not  for  these  two:  (a)  To  defeat  the  deed,  or  (b)  to 
raise  a  resulting  trust  in  the  grantor. 

If  the  consideration  for  the  option  is  not  expressed  it  may  be  proved 
at  the  trial.    Benedict  v.  Pincus,  191  N.  Y.  377,  84  N.  E.  284. 

2  Waterman  v.  Waterman,  27  Fed.  827 ;  Murphy  T.  &  Co.  v.  Reid,  125  Ky. 
585,  101  S.  W.  964,  10  L.  R.  A.  (N.  S.)   195,  on  demurrer. 


§  331  LAW  OF  OPTION  CONTRACTS  152 

illegality,  notwithstanding  the  recital  of  a  consid- 
eration in  the  contract.^ 

The  recital  of  a  consideration,  however,  is  con- 
clusive as  against  the  optionor  and  in  favor  of  a 
purchaser  from  the  optionee  for  a  substantial 
consideration,  where  the  purchase  was  made  with 
knowledge  of  the  optionor  and  without  his  objec- 
tion/ This  qualification  of  the  rule,  however,  is 
clearly  based  on  estoppel. 

The  written  option  in  many  jurisdictions  imports 
a  consideration.  The  burden  is  on  the  party  chal- 
lenging it  to  prove  want  of  consideration.^  And 
where  a  written  option  recites  a  consideration  of 
$1  "to  me  paid"  and  the  optionee  testifies  that  that 
amount  was  actually  paid  to  the  optionor,  his  testi- 
mony, in  addition  to  the  written  recital  in  the 
option,  constitutes  a  preponderance  of  the  evidence 
sufficient  to  sustain  a  finding  that  the  consideration 
was  paid  as  against  the  testimony  of  the  optionor 
that  the  amount  was  not  paid.^ 

3  See  Stigler  v.  Jaap,  83  Miss.  351,  35  So.  948,  want  of;  Crandall  v. 
Willig,  166  111.  233,  46  S.  E.  755,  this  option  was  under  seal  but 
without  any  consideration;  Noble  v.  Mann,  32  Ky.  L.  Eep.  30,  105 
S.  W.  152,  want  of;  Rude  v.  Levy,  43  Colo.  482,  96  P.  560,  24 
L.  R.  A.  (N.  S.)  91,  127  A.  S.  R.  123,  want  of;  Berry  v.  Frisbie,  120 
Ky.  337,  86  S.  W.  588,  27  Ky.  L.  Rep.  724,  oil  lease;  McMillan  v. 
Ames,  33  Minn.  257,  22  N.  W.  612,  fraud  and  illegality;  Luke  v. 
Livingston,  9  Ga.  App.  116,  70  S.  E.  596. 

4Hoogendorn  v.  Daniel,  178  Fed.  765,  102  C.  C.  A.  213,  mine;  see  also 
Fuller  V.  Artman,  2  N.  Y.  S.  13,  69  Hun.  546,  53  N.  Y.  St.  Rep.  339 ; 
Watkins  v.  Robertson,  105  Va.  269,  54  S.  E.  33,  115  A.  S.  R.  880,  5 
L.  R.  A.  (N.  S.)  1194;  Graybill  v.  Braugh,  89  Va.  895,  17  S.  E.  558, 
37  A.  S.  R.  894,  21  L.  R.  A.  133. 

5  Cone  V.  Cone,  118  Iowa  458,  92  N.  W.  665. 

6  Jones  V.  Barnes,  94  N,  Y.  S.  695,  105  App.  Div.  287. 


153  CONSIDERATION — SEAL  §  332 

Sec.  332.  SEAL.  COMMON  LAW.— At  com- 
mon law,  one  of  the  characteristics  of  a  deed  or 
contract  under  seal  is  that  no  consideration  is 
necessary  to  support  it.  Consequently,  at  common 
law,  a  sealed  option  contract,  though  in  fact  with- 
out consideration,  is  valid  in  the  sense  that  the 
offer  continues  binding  on  the  optionor  during  the 
time  limit,^  and,  except  upon  the  ground  of  fraud 
or  illegality,  the  consideration  implied  from  the 
seal  can  not  be  impeached  for  the  purpose  of  invali- 
dating the  option,  or  destroying  its  character  as  a 
specialty.^ 

Thus,  defendant  delivered  to  plaintiff  a  sealed 
offer  to  sell  land  conditioned  on  acceptance  \v^thin 
ten  days.  There  was  no  consideration  for  the  offer 
except  that  imported  by  the  seal.  Two  days  after 
the  offer,  defendant  withdrew  it.  Within  ten  days, 
plaintiff  duly  accepted  the  offer,  and  it  was  held 
the  offer,  being  under  seal,  was  an  irrevocable  cove- 
nant conditioned  upon  acceptance  within  ten  days, 

1  Simpson  v.  Sanders,  130  Ga.  265,  60  S.  E.  541;  Guyer  v.  Warren,  175 

ni.  328,  51  N.  E.  580 ;  Mansfield  v.  Hodgdon,  147  Mass.  304,  17  N.  E. 
544;  Watkins  v.  Robertson,  105  Va.  269,  54  S.  E.  33,  5  L.  R.  A. 
(N.  S.)  1194,  115  A.  S.  R.  880,  overruling  Graybill  v.  Braugh,  89 
Va.  895,  17  S.  E.  558,  37  A.  S.  R.  894,  21  L.  R.  A.  133;  Weaver  v. 
Burr,  31  W.  Va.  736,  8  S.  E.  743,  3  L.  R.  A.  94;  Savereux  v. 
Tourangeau,  16  Ont.  L.  Rep.  600;  SiveU  v.  Hogan,  119  Ga.  167, 
46  S.  E.  67. 
Brewer  v.  Sowers,  118  Md.  681,  86  Atl.  228.  In  this  case  the  recited 
consideration  of  $1  was  not  paid  and  the  court  seems  to  hold 
that  the  recital  had  the  effect  of  a  promise  by  optionee  to  pay  it, 
thus  furnishing  a  real  consideration  for  the  option,  though  its  actual 
payment  was  delayed. 

2  McMillan  v.  Ames,  33  Minn.  257,  22  N.  W.  612,  distinction  between 

covenants  and  simple  contracts  pointed  out. 
Weaver  v.  Burr,  supra;  Watkins  v.  Robertson,  supra;  see  Hobbs  v. 
Brush  Electric  Light  Co.,  75  Mich.  550,  42   N.   W.   965;   Xenos  v. 
Wickham,  L.  R.,  2  H.  L.  296;   Sivell  v.  Hogan,  supra. 


§  332  LAW  OF  OPTION  CONTRACTS  154 

and  that  acceptance  within  that  time  made  it  a 
mutual  contract,  which  plaintiff  could  enforce.^ 

It  should  be  noted  that  courts  of  equity  do  not 
always  follow  the  common  law  rule/  Courts  of 
equity  inquire  into  the  consideration  not  for  the 
purpose  of  setting  aside  the  contract  under  seal,^ 
but  for  the  purpose  of  ascertaining  whether  they 
should  lend  their  peculiar  auxiliary  remedy  of 
specific  performance  to  aid  in  its  enforcement.  And 

3  To  the  point  that  a  sealed  option  contract  imports  consideration,  see 
Bladi  V.  Maddox,  104  Ga.  157,  30  S.  E.  723. 

Simpson  v.  Sanders,  130  Ga.  265,  60  S.  E.  541 ;  Smith  v.  Smith,  36  Ga. 
184,  91  Am.  Dec.  761;  Hayes  v.  O'Brien,  149  111.  403,  37  N.  E.  73, 
23  L.  E.  A.  555,  lease  and  option;  Adams  v.  Peabody  Coal  Co.,  230 
ni.  469,  82  N.  E.  645;  O'Brien  v.  Boland,  166  Mass.  481,  44  N.  E. 
602;  McCormick  v.  Stephany,  57  N.  J.  Eq.  257,  41  Atl.  840,  s.  c. 
61  N.  J.  Eq.  208,  48  Atl.  25,  lease  and  option;  Johnston  v.  Wads- 
worth,  24  Ore.  494,  34  P.  13,  statute  of  frauds;  Barnes  v.  Hustead, 
219  Pa.  287,  68  Atl.  839;  Weaver  v.  Burr,  31  W.  Va.  736,  8  S.  E.  743, 
3  L.  E.  A.  94;  Hanley  v.  Watterson,  39  W.  Va.  214,  19  S.  E.  536; 
McMillan  v.  Ames,  supra;  Watts  v.  Kellar,  56  Fed.  1,  5  C.  C.  A.  394; 
Willard  v.  Tayloe,  8  Wall.  (U.  S.)  557,  19  L.  Ed.  501,  lease  and 
option;  Mathews  Slate  Co.  v.  New  Empire  Slate  Co.,  122  Fed.  972, 
lease  and  option. 

Watkins  v.  Eobertson,  supra,  note  1,  holds  that  a  sealed  option  con- 
clusively imports  consideration,  in  suit  for  specific  performance. 

See  Sec.  321,  supra. 

*  Crandall  v.  Willig,  166  HI.  233,  46  N.  E.  755,  evidence  showed  there  was 

no  consideration. 
Corbett  v.  Cronkhite,  239  HI.  9,  87  N.  E.  874,  acceptance  not  in  time; 

in  equity  real  consideration  may  be  shown;    option  did  not  recite 

a  consideration. 
Borel  V.  Mead,  3  N.  Mex.  84,  2  P.  222,  real  consideration  may  be 

shown. 

6  Fuller  V.  Artman,  69  Hun.  546,  2  N.  T.  S.  13,  53  N.  Y.  St.  Eep.  339, 
evidence  that  there  was  in  fact  no  consideration  not  admissible  for 
purpose  of  invalidating. 
Mathews  Slate  Co.  v.  New  Empire  Slate  Co.,  122  Fed.  972,  not  rebut- 
table to  invalidate. 


155  CONSIDERATION — SEAL  §  333 

this  rule,  according  to  the  decisions,  applies  to 
option  contracts.^ 

Sec.  333.  STATUTORY  MODIFICATION  OF 
RULE. — The  common  law  rule  with  reference  to 
sealed  instruments  has  been  abolished  in  some 
states,  and,  in  others,  the  only  effect  now  of  the  seal 
is  to  raise  a  presumption  of  consideration,  a  pre- 
sumption,^ however,  which  according  to  some 
decisions  is  also,  under  the  statute,  raised  by  writ- 
ten instruments  not  under  seal.^ 

The  effect  of  the  statutory  provisions  abolishing 
the  common  law  rule  is  not  always  made  clear,  but 
it  is  believed  that,  in  those  jurisdictions  where  the 
distinction  between  sealed  and  unsealed  instru- 
ments has  been  abolished,  a  sealed  option  contract 
stands  upon  the  same  footing  as  an  unsealed  one,^ 
and  that  such  contracts  are  open  to  the  same 

6  Eclipse  Oil  Co.  v.  South  Penn  Oil  Co.,  47  W.  Va.  84,  34  S.  E.  923,  929,  on 
rehearing. 

McMillan  v.  Ames,  33  Minn.  257,  22  N.  W.  612,  fraud  and  illegality. 

Storch  V.  Duhnke,  76  Minn.  521,  79  N.  W.  533,  holding  it  decides 
nothing  contrary  to  the  decision  in  McMillan  v.  Ames,  33  Minn.  257, 
22  N.  W.  612.  In  the  Storch  case  the  option  was  contained  in  a 
sealed  agreement  of  exchange.  The  ease  turned  on  the  point  that 
the  agreement  did  not  imply  a  consideration  for  the  option.  Follow- 
ing the  rule  of  the  Storch  case  is  Davis  v.  Shaw,  21  Ont.  L.  Eep. 
474,  15  Ont.  Wkly.  Rep.  134,  16  Wkly.  R.  273. 

The  presence  of  a  seal  does  not  dispense  with  an  acceptance  of  the 
sealed  offer.    Penn  Match  Co.  v.  Hapgood,  141  Mass.  145,  7  N.  E.  22. 

1  Mossie  V.  Cyrus,  61  Ore.  17,  119  P.  485. 

2Vickery  v.  Maier,  164  Gal.  384,  129  P.  273;  see  Olston  v.  Company, 
infra  at  page  1098  Reporter;  Cone  v.  Cone,  118  Iowa,  458,  92 
N.  W.  665. 

3  Tracy  v.  Alvord,  118  Cal.  654,  50  P.  757. 


§  334  LAW  OF  OPTION  CONTRACTS  156 

inquiries,  with  reference  to  the  consideration,  as 
unsealed  instruments.'* 


Sec.  334.  EXTENSIONS.— An  extension  of  an 
option  contract  differs  in  no  important  respect 
from  the  original  option  contract.  We  are  con- 
cerned here,  however,  only  with  the  consideration, 
and  it  is  held  that  an  agreement,  not  supported  by 
a  consideration,  extending  the  time  of  election,  is 
a  nude  pact  and,  like  a  mere  offer,  may  be  with- 
drawn by  the  optionor  at  any  time  before  election 
by  the  optionee.^  But  an  extension  not  supported 
by  consideration,  is  still  a  continuing  offer,  and  if 
accepted  before  withdrawal  by  the  optionor,  such 
act  will  raise  the  offer  into  a  binding  contract.^ 

4  See  Olston  v.  Oregon  Water  Power  and  Ry.  Co.,  52  Ore.  343,  96  P.  1095, 
at  page  1098,  20  L.  R.  A.  (N.  S.)  915;  Rude  v.  Levy,  43  Colo.  482, 
96  P.  560,  24  L.  R.  A.  (N.  S.)  91,  127  A.  S.  R.  123;  Mossie  v.  Cyrus, 
61  Ore.  17,  119  P.  485,  prima  facie;  McMillan  v.  Ames,  33  Minn. 
257,  22  N.  W.  612,  Axe  v.  Tolbert,  179  Mich.  556,  146  N.  W.  418. 

In  the  Olston  case,  supra,  from  Oregon,  it  is  stated  that  by  statute 
the  distinction  between  sealed  and  unsealed  instruments  has  been 
abolished  in  Missouri,  Kansas,  Washington,  and  Nebraska.  That  in 
Alabama,  New  York,  Michigan,  Iowa,  Indiana,  New  Hampshire,  and 
Oregon  a  seal  is  prima  facie  evidence  of  a  consideration.  The  latter 
rule  obtains  in  California.  Tracy  v.  Alvord,  supra.  The  tendency 
of  courts  in  common-law  jurisdictions  is  to  break  away  from  the 
common-law  rule.  This  is  plainly  exhibited  by  the  decisions  cited 
in  the  notes  to  the  preceding  sections. 

1  Coleman  v.  Applegarth,  68  Md.  21,  11  Atl.  284,  6  A.  S.  R.  417 ;  Cummins 

V.  Beavers,  103  Va.  230,  48  S.  E.   891,   106  A.  S.  R.  881,   1  Ann. 
Cas.  986. 
Where  the  extension  is  made  after  the  expiration  of  the  option  time, 
a    new   consideration   is   necessary   to    support   the   extension.      See 
Patterson  v.  Farmington  St.  Ry.  Co.,  76  Conn.  628,  57  Atl.  853,  859. 

2  See  Ide  v.  Leiser,  infra,  and  Coleman  v.  Applegarth,  supra;  Cummins 

V.  Beavers,  supra;  Gira  v.  Harris,  infra. 


157  CONSroERATION  FOR  EXTENSION  §  334 

The  rule  stated  is  the  same  whether  the  extension 
be  oral  or  in  writing,^  with  the  qualification,  how- 
ever, that  a  written  instrument,  under  the  statute, 
imports  a  consideration  therefor  and  casts  the  bur- 
den of  disproving  it  upon  the  party  attacking/ 

An  agreement  to  extend  an  option  to  purchase 
land  is  supported  by  the  optionee's  extension  of  the 
time  for  the  settlement  by  the  optionor  of  an 
account  arising  under  the  original  option.^ 

3  Ide  V.  Leiser,  10  Mont.  5,  24  P.  695,  24  A.  S.  R.  17,  consideration  for 

option  does  not  support  extension. 

4  Gira  v.  Harris,  14  S.  D.  537,  86  N.  W.  624. 

5  Stein  V.  Leeman,  161  Cal.  502,  119  P.  663,  affirming  90  P.  536. 

Promise  to  advance  monthly  installments  of  the  price  sufficient,  Scott 

V.  Hubbard,  67  Ore.  498,  136  P.  653. 
Also    to    do   assessment   work,    Stamey   v.    Hemple,    173    Fed.    61,    97 

C.  C.  A.  379. 
Mutual  promises   are   sufficient,   Bourke  v.   Kissack,   242   HI,   233,   89 

N.  E.  990. 
See  Fulton  v.  Messenger,  61  W.  Va,  477,  56  S.  E.  830. 


CHAPTER  IV. 

STATUTE  OF  FRAUDS. 

Sec.  401.     Option  contract  for  purchase  of  land. 

See.  402.     Same.    Cases. 

Sec.  403.     Option  contract  for  sale  of  goods,  wares,  and  merchandise. 

Sec.  404.     Agreement  not  to  be  performed  within  a  year. 

Sec.  405.     Contract  or  memorandum  thereof.     Scope  of  statute. 

Sec.  406.     Contract  or  memorandum  thereof.     Essential  terms  of  agree- 
ment must  be  in  writing.    Evidence. 

Sec.  407.     Contract  or  memorandum  thereof.     Subscribing  by  party  "to 
be  charged."   Agents. 

Sec.  408.     Modification  of  terms.     Generally. 

Sec.  409.     Extension  of  option  time. 

Sec.  410.     Decisions  holding  parol  extension  invalid. 

Sec.  411.     Decisions  holding  parol  extension  valid. 

Sec.  412.     Extensions.     Estoppel. 

Sec.  413.     Extensions.     "Waiver. 

Sec.  414.     Oral    election    or    acceptance.      Requirements    of    particular 
statutes. 

Sec.  415.     Same.     Oral  election  sufficient  in  most  states. 

Sec.  416.     Same.     Mutuality. 

Sec.  417.     Same.     Rights  of  optionor  under  oral  election. 

Sec.  418.     Part  and  fuU  performance. 

Sec.  419.     Pleading. 

(159) 


§  401  LAW  OF  OPTION  CONTRACTS  100 

Section  401.  OPTION  CONTRACT  FOR 
PURCHASE  OF  LAND.— The  statute  varies 
more  or  less  in  the  several  states  and,  consequently, 
the  statute  of  the  particular  state  must  be  consulted 
to  determine  the  validity  of  a  contract  falling 
within  its  provisions.  It  may,  however,  be  said  in 
a  general  way  and  as  applicable  to  all  states,  that 
the  statute  of  frauds  applies  to  every  executory 
contract  for  the  sale  and  purchase  of  land,  tene- 
ments, hereditaments,  or  any  interest  in  or  con- 
cerning the  same. 

An  option  contract  prior  to  election  does  not, 
strictly  speaking,  convey  or  transfer  any  interest 
or  estate  in  the  land.  It  grants,  as  we  shall  see,  a 
mere  right  of  election  to  purchase.^  The  effect, 
however,  of  exercising  the  right  of  election  is  to 
bring  into  existence  an  agreement  to  sell,  and  this 
agreement  to  be  enforceable  must,  of  course,  meet 
the  requirements  of  the  statute.  It  may  be  said, 
therefore,  that  an  option  contract  giving  the 
optionee  the  right  to  purchase  land,  tenements, 
hereditaments,  or  some  interest  in,  or  concerning 
the  same,  and  turned  into  a  bilateral  contract  by 
election,  must  be  in  writing  and  otherwise  comply 
with  the  provisions  of  the  statute  of  frauds,  or,  by 
force  of  the  statute  in  some  jurisdictions  it  is  void, 
and  in  others  unenforceable.^  And  when  the  statute 

1  See  Sec.  501. 

2  Wall  V.  Minn.  etc.  R7.  Co.,  86  Wis.  48,  56  N.  W.  367 ;   Badenhop  v. 

McCahill,  42  How.  Pr.  (N.  Y.)  192;  Hilberg  v.  Greer,  172  Mich.  505, 
138  N.  W.  201;  Grover  v.  Buck,  34  Mich.  519;  Esslinger  v.  Pascoe, 
129  Iowa  86,  105  N.  W.  362,  3  L.  R.  A.  (N.  S.)  147,  option  on  con- 
tract for  purchase  of  land;  Reilly  v.  Steinhart,  146  N.  Y.  S,  534, 
under  Cuban  Civil  Code;  contra,  Hughes  v.  Antill,  23  Pa.  Sup.  Ct. 
290. 


161         STATUTE  OF  FRAUDS — OPTION  ON  LAND        §  402 

permits  a  memorandum  of  the  contract,  the  memo- 
randum must  contain  all  the  essential  terms  of  the 
contract.^ 


Sec.  402.  SAME.  CASES.— A  verbal  agreement 
by  A  to  work  for  B  for  one-third  of  the  profit  of 
the  business  with  an  option  of  taking  a  one-third 
interest  in  B's  farm  in  case  A's  share  of  the  profits 
amounts  to  one-third  of  the  cost  of  the  farm,  is,  so 
far  as  concerns  the  conveyance,  within  the  statute.^ 

An  oral  agreement  by  defendant  to  take  a  con- 
tract for  the  purchase  of  land  on  which  plaintiff 
has  paid  a  portion  of  the  price,  off  his  hands,  at 
plaintiff's  option,  and  to  assume  its  conditions  and 
be  substituted  in  plaintiff's  place,  is  a  contract  for 
the  purchase  of  an  interest  in  lands  and  within  the 
statute.^ 

A  parol  agreement  by  owners  employing  a  broker 
to  procure  a  purchaser,  made  with  the  purchaser 
procured  by  the  broker,  to  give  the  purchaser  a 
specified  time  to  decide  whether  he  will  accept  the 
terms  stated,  is  a  contract  for  the  sale  of  real  estate 
and  is  within  the  statute.^ 

2  Option  for  renewal  of  lease  is  within  the  statute,  Campbell  v.  Timmer- 
man,  139  HI.  App.  151. 

8  Mossie  V.  Cyrus,  61  Ore.  17,  119  P.  485,  and  also  definitely  show  which 
party  is  seller  and  which  buyer;  Walker  v.  Bamberger,  17  Utah  239, 
54  P.  108;  Ward  v.  Hasbrouck,  169  N.  Y.  407,  62  N.  E.  434;  Hilberg 
V.  Greer,  supra. 

1  Friend  v.  Pentingill,  116  Mass.  515. 

2  Esslinger  v.  Pascoe,  129  Iowa  86,  105  K  W.  362,  3  L.  R.  A.  (N.  S.) 

147,   invalid   though   exercised   because   of   failure   to    comply   with 
statute  in  its  creation. 

3  Granger  Real  Estate  Ex.  v.  Anderson,  (Tex.  Civ.  App.)  145  S.  W.  262. 
11 — Option  Contracts. 


§  402  LAW  OF  OPTION   CONTRACTS  162 

A  promise  in  a  lease  that  the  owner  may  sell  the 
premises  on  a  certain  notice  to  the  lessee,  and  giv- 
ing him  the  first  opportunity  to  purchase  the 
premises,  provided  he  will  pay  as  much  as  any 
other  person,  is  not  void  under  the  statute  of  frauds 
as  resting  partly  in  parol/  But  a  parol  contract 
between  the  owner  of  land  and  his  tenant  to  give 
the  latter  the  privilege  of  buying  the  land  is  within 
the  statute. ° 

A  contract  giving  one  an  interest  in  the  net 
profits  to  be  realized  from  the  sale  of  an  option  on 
certain  coal  and  oil  lands,  does  not  give  him  such 
interest  in  the  land  as  to  be  within  the  statute.^ 

The  statute  does  not  apply  to  executed  contracts, 
as  where  a  deed  has  been  executed.  In  such  case, 
the  optionor  may  recover  the  price  although  the 
option  fails  to  meet  the  requirements  of  the  statute.'^ 

An  option  to  repurchase  land  must  be  in  writing,* 
but  an  oral  surrender  by  the  optionee  in  possessi  on 

4  Marske  v.  Willard,  169  El.  276,  48  N.  E.  290,  affirmed  68  El.  App.  83. 

5  Green  v.  Hammock,  13  Ky.  L.  Rep.  145,  16  S.  W.  357 ;  Campbell  v. 

Timmerman,  139  El.  App.  151,  option  to  renew  lease;  see  Remm  v. 
Landon,  43  Ind.  App.  91,  86  N.  E.  973,  option  to  extend  lease. 

6  Keller  v.  Fitzgerrell,  249  El.  451,  94  N.  E.  926. 

Agreement  between  optionee  in  possession  to  divide  commission  with 
optionor  is  within  Sub.  6,  See.  1624,  California  Civil  Code,  requiring 
contracts  for  the  payment  of  commission  for  the  sale  of  real  estate 
to  be  in  writing,  Crowell  v.  Evdng,  4  Cal.  App.  358,  88  P.  285.  See, 
however,  Pierson  v.  Donham,  (Ind.  App.)  104  N.  E.  606,  holding  an 
oral  commission  agreement  to  obtain  an  option  for  purchase  of  land 
is  not  within  statute. 

7  Landon  v.  Morehead,  34  Okl.  701,  126  P.  1027,  also  holding  action  by 

assignor  to  recover  price  for  which  option  was  sold  is  not  affected 
by  statute  of  frauds,  the  assignment  being  executed  and  the  con- 
sideration remaining  unpaid. 

SGetman  v.  Getman,  1  Barb.  Ch.  (N.  Y.)  499  j  Holt  v.  Moore,  37  Ark. 
145;  Thompson  v.  Elliott,  28  Ind.  55;  Graves  v.  Graves,  45  N.  H.  323. 


163  STATUTE  OF  FRAUDS — GOODS,  WAEES,  ETC.  §  403 

where  there  has  not  been  an  election,  is  not  within 
the  statute.^  The  fact  that  the  oral  promise  was  in 
the  alternative  giving  the  promisor  his  election  to 
convey  the  land,  or  pay  a  certain  sum  of  money, 
does  not  except  it  from  the  statute.^** 

Sec.  403.   OPTION  CONTRACT  FOR  SALE 
OF  GOODS,  WARES  AND  MERCHANDISE.— 

The  statute  of  frauds  also  applies  to  contracts  for 
the  sale  of  goods,  wares,  and  merchandise,  and  also, 
in  many  jurisdictions,  to  choses  in  action  or  things 
in  action,  and  chattels  generally,  in  excess  of  a 
certain  price,  unless  there  is  an  acceptance,  or  part 
acceptance,  of  the  goods,  or  part  payment  of  the 
purchase  price.  An  option  contract  giving  the 
right  of  election  to  purchase  any  of  the  articles  of 
personal  property  enumerated  in  the  statute,  and 

8  In  Burrell  v.  Root,  40  N.  Y.  496,  R  conveyed  certain  land  to  B  and, 
at  the  same  time,  executed  an  agreement  under  seal  signed  by  him 
alone,  by  which  he  agreed  that  at  the  expiration  of  four  years, 
the  land  would  be  worth  $6  per  acre  and  that  he  would  then  purchase 
it  back  from  B  at  that  price,  if  B  should  desire  to  sell.  B,  by 
letter,  accepted  the  terms  of  the  offer  and  at  expiration  of  time 
tendered  his  deed  of  conveyance  of  the  land,  and  brought  action 
against  R  to  recover  the  price,  and  it  was  held  the  contract  was 
valid  and  binding  on  R  and  that  the  action  would  lie;  that  the 
contract  was  not  for  a  sale  of  land  and  not,  therefore,  within  the 
statute  of  frauds,  providing  that  every  contract  for  the  sale  of  lands, 
etc.,  shall  be  void  unless  the  contract,  etc.,  shall  be  in  writing,  and 
"subscribed  by  the  party  by  whom  the  sale  is  made,"  the  Court  hold- 
ing that  the  quoted  clause  of  the  statute  applied  only  to  contracts 
where  some  obligation  is  assumed  by  the  owner  as  the  party  making 
the  sale,  and,  consequently,  it  did  not  apply  to  B,  who  had  a  mere 
option  right. 

0  Adams  v.  Fullam,  43  Vt.  592, 
Oral  surrender  of  option  within  Wisconsin  statute,  Telford  v.  Frost, 
76  Wis.  172,  44  N.  W.  835,  but  not  invalid  under  Colorado  statute, 
Larsh  v.  Boyle,  36  Colo.  18,  86  P.  1000. 

10  Patterson  v.  Cunningham,  12  Me.  506. 


§  403  LAW  OF  OPTION  CONTRACTS  164 

at  a  price  in  excess  of  that  specified  is  a  ^' thing  in 
action"  after  election  and,  therefore,  falls  within 
the  provisions  of  this  clause  of  the  statute  of 
frauds/  The  statute,  however,  does  not  apply  to 
an  agreement  to  procure  an  option  to  further 
develop  a  mine  and  subsequently  to  form  a  corpora- 
tion and  issue  stock  which  is  to  be  equally  divided 
among  the  partners  in  the  joint  adventure.^ 

A  contract  for  the  purchase  of  wagon  wheels  to 
be  delivered  within  a  year  which  gives  the  pur- 
chaser the  option  to  take  additional  property  up  to 
a  specified  limit,  is  not  within  the  statute  as  to  the 
additional  portion,  since  each  order  given  consti- 
tutes an  offer  pro  tanto.^ 

1  Walker  v.  Bamberger,  17  Utah  239,  54  P.  108 ;   see  Brown  v.  Hall,  5 

Lans.  (N.  Y.)   117;  also  Hines  v.  Cureton-Cole  Co.,  9  Ga.  App.  778, 
72  S.  E.  191,  and  Sivell  v.  Hogan,  119  Ga.  167,  46  S.  E.  67. 

In  Nagel  v.  Cohen,  112  N.  Y.  S.  1066,  the  owner  of  certain  fixtures, 
valued  at  $1800,  agreed  to  sell  them  for  that  amount  to  J,  who 
deposited  with  C  $100  to  be  paid  to  the  owner  if  J  did  not  pur- 
chase tl^e  fixtures  as  agreed,  and  the  owner  deposited  an  equal 
amount  with  C  to  be  paid  to  J  if  the  owner  did  not  sell  as  agreed. 
The  owner  also  agreed  not  to  move  the  fixtures  and  to  give  J  the 
exclusive  option  to  purchase,  and  it  was  held  the  transaction  was  an 
option  and  not  one  of  sale  of  goods,  and  was  not,  therefore,  within 
the  statute  of  frauds.  The  theory  as  it  would  seem  was  that  an 
option  contract,  prior  to  election,  is  neither  goods,  wares,  merchan- 
dise, nor  ' '  a  thing  in  action. ' ' 

Shares  of  stock  in  a  corporation  are  not  goods,  wares,  or  merchandise, 
Rogers  v.  Burr,  105  Ga.  432,  31  S.  E.  438,  70  A.  S.  R.  50,  contra; 
Pray  v.  Mitchell,  60  Me.  430;  Tisdale  v.  Harris,  37  Mass.  (20  Pick.) 
9;  North  v.  Forest,  15  Conn.  400;  see  Mayer  v.  Child,  47  Cal.  142, 
thing  in  action;  Thompkins  v.  Sheehan,  158  N.  Y.  617,  53  N.  E.  502, 
thing  in  action;  Sprague  v.  Hosie,  155  Mich.  30,  118  N.  W,  497,  130 
A.  S.  R.  558,  19  L.  R.  A.   (N.  S.)  874. 

2  Kent  V.  Costin,  (Minn.)  153  N.  W.  874. 

8  Connersville  Wagon   Co.  v.   McFarlan  Carriage  Co.,   166  Ind.    123,   76 
N.  E.  294. 


165        STATUTE  OF  FRAUDS — ONE  YEAR  CLAUSE       §  404 

Defendant,  prior  to  purchasing  bonds,  promised 
plaintiff  that  if,  at  any  time,  he  became  dissatisfied 
with  the  bonds,  defendant  would  take  them  back  on 
thirty  days '  notice,  and  return  the  money  paid  for 
them  with  interest,  and  it  was  held  the  agreement 
was  not  within  the  statute  of  frauds/ 

An  oral  agreement  by  the  vendor  to  repurchase 
the  stock  sold,  at  any  time  if  desired  by  the  pur- 
chaser, is  not  affected  by  the  statute,  as  such  oral 
agreement  is  a  part  of  the  executed  sale.^ 

Sec.  404.  AGREEMENT  NOT  TO  BE  PER- 
FORMED WITHIN  A  YEAR.— The  wording  of 
this  clause  of  the  statute  differs  slightly  in  the 
several  states,  but  it  is  believed  that,  notwithstand- 
ing some  slight  verbal  changes,  the  meaning  of  the 
clause  as  originally  enacted  in  England  has  not 
been  changed.  The  English  statute  applies  to  "any 
agreement  that  is  not  to  be  performed  within  a 
space  of  one  year  from  the  making  thereof."  This 
clause  has  been  construed  as  not  applying  to  the 
performance  of  an  act,  or  the  happening  of  a  con- 
tingency, which  might  possibly  happen  within  the 
year.^   In  some  states,  by  force  of  statute,  it  must 

4Fitzpatrick  v.  Woodruff,  96  N.  Y.  561;  Johnston  v.  Trask,  116  N.  Y. 
136,  22  N.  E.  377,  15  A.  S.  R.  394,  5  L.  R.  A.  630. 
But  a  subsequent  oral  agreement  to  return  is  within  the  statute,  Ean- 
kins  V.  Grupe,  36  Hun.  (N.  Y.)  481. 

e  Gurwell  v.  Morris,  2  Cal.  App.  451,  83  P.  578 ;  Schaeffer  v.  Strieder, 
203  Mass.  467,  89  N.  E.  618;  Hankwitz  v.  Barrett,  143  Wis.  639, 
128  N.  W.  430 ;  Fay  v.  Wheeler,  44  Vt.  292, 
Otherwise  in  case  of  collateral  agreement  by  third  person  to  purchase, 
Chamberlain  v,  Jones,  52  N.  Y,  S.  998,  32  App.  Div.  237;  Morse  v. 
Douglass,  99  N.  Y.  S.  392,  112  App.  Div.  798,  agent;  Korrer  v. 
Madden,  152  Wis.  646,  140  N.  W.  325. 

1  Carter  White  Lead  Co.  v.  Kinlin,  47  Neb.  409,  66  N.  W.  536. 


§  404  LAW   OP  OPTION   CONTRACTS  166 

appear,  from  the  terms  of  the  agreement  itself,  that 
the  parties  did  not  contemplate  it  should  be  performed 
within  the  year. 

An  oral  option  contract  does  not  fall  within  this 
clause  of  the  statutes  unless  the  right  to  elect  is,  by  the 
terms  of  the  option,  postponed  for  more  than  one  year 
from  the  ''making  thereof,"  since  ** performance " 
within  the  year  is  not  impossible.^ 

An  oral  contract  to  sell  certain  stock  at  the  end  of 
three  years,  with  option  to  purchaser  to  call  it,  at  any 
time,  may  be  performed  within  the  year,  and  is,  there- 
fore, not  within  the  statute.^ 

An  oral  agreement  for  leasing  of  premises  for  four 
months  with  option  for  an  extension  not  exceeding 
three  years,  is  not  within  the  statute  as  a  contract  not 
to  be  performed  within  a  year,  the  exercise  of  the 
option  being  a  mere  extension  of  the  lease.* 

2Fairchild  v.  City  etc.  Co.,  138  N.  Y.  S.  133,  153  App.  Div.  277;   see 
McConathy  v.  Lanham,  116  Ky.  735,  76  S.  W.  535,  25  Ky.  L.  Eep.  971. 

3  Seddon  t.  Rosenbaum,  85  Va.  928,  9  S.  E.  326,  3  L.  R.  A.  337;  see 

Osgood  V.  Skinner,  211  111.  229,  71  N.  E.  869,  affirmed  111  111.  App. 
606. 

4  Ward  V.  Hasbrouck,  169  N.  Y.  407,  62  N.  E.  434,  the  one-year  clause 

applying  only  to  personal  property. 

A  lease  for  one  year,  with  privilege  of  renewal  for  one  or  more  years, 
on  certain  notice,  is  for  a  greater  term  than  one  year,  and  an 
agreement  to  take  such  lease  should  be  in  writing,  Donovan  v. 
Schoenhofen  Brewing  Co.,  92  Mo.  App.  341. 

But  a  parol  lease  of  land  made  December  28,  1895,  for  a  term  of 
one  year  commencing  January  1,  1896,  is  within  the  one-year  clause 
of  the  statute,  as  the  other  clause  of  the  statute  authorizing  a  parol 
lease  of  land  for  one  year  must  be  construed  with  the  former.  Wick- 
son  V.  Monarch  Cycle  Mfg.  Co.,  128  Cal.  156,  60  P.  764,  79  A.  S.  R. 
36,  but  the  contrary  is  held  by  other  courts,  CoUins-Deitz-Morris 
Co.  V.  Elk  City  Mercantile  Co.,  (Okl.)  150  P.  457. 

A  contract,  by  its  terms,  determinate  within  a  year,  but  which  may 
be  continued  longer,  at  the  option  of  the  parties,  is  not  within 
the  statute,  Brigham  v.  Carlisle,  78  Ala.  243,  56  Am.  Rep.  28. 

When  period  of  one  year  to  re-purchase  commences,  Gurwell  v.  Morris, 
2  Cal.  App.  451,  83  P.  578. 

Return  of  horse,  after  expiration  of  one  year,  if  not  sound,  and  agree- 
ment to  pay  $100  on  return,  is  within  statute,  Shipley  v.  Patton, 
21  Ind.  169. 


167  STATUTE  OP  FRAUDS — CONTRACT  OR  MEMORANDUM       §  405 

An  oral  agreement  by  which  a  licensee  of  a  proc- 
ess is  given  an  exclusive  right  for  one  year,  with 
option  to  then  surrender  his  claim,  or  to  continue  his 
exclusive  right  for  a  further  term  of  sixteen  years,  is 
within  the  statute,^  and  so  is  an  oral  contract  requir- 
ing plaintiff  to  go  out  and  create  a  market  for  defen- 
dant's coal.® 


Sec.  405.  CONTRACT  OR  MEMORANDUM 
THEREOF.  SCOPE  OF  STATUTE.— The  fourth 
section  of  the  English  statute  of  frauds  and  perjuries 
with  reference  to  the  subject  matter  in  hand,  provided 
''that  no  action  shall  be  brought  whereby  to  charge 
.  .  .  any  person  upon  any  contract,  or  sale  of  lands, 
tenements,  or  hereditaments,  or  any  interest  in  or 
concerning  them;  or  upon  any  agreement  that  is  not 
to  be  performed  within  the  space  of  one  year  from  the 
making  thereof;  unless  the  agreement  upon  which  such 
action  shall  be  brought,  or  some  memorandum  or  note 
thereof,  shall  be  in  writing  and  signed  by  the  party  to 
be  charged  therewith,  or  some  other  person  thereunto 
by  him  lawfully  authorized. ' ' 

And  the  seventeenth  section  of  the  same  statute 
provided  ''that  no  contract  for  the  sale  of  any 
goods,  wares  and  merchandises  for  the  price  of  £10 
sterling,   or  upwards,   shall  be  allowed  to  be   good, 

4  Renewal  of  contract  for  sale  of  lumber  at  purchaser 's  option  is  not 
within  statute,  Byrne  Mill  Co.  v.  Robertson,  149  Ala.  273,  42  So. 
1008. 
Option  to  terminate  contract,  Blake  v.  Voigt,  134  N.  Y.  69,  31  N.  E. 
256,  30  A.  S.  R.  622;  Sterling  Organ  Co.  v.  House,  25  W.  Va.  64; 
Wagniere  v.  Bunnell,  29  R.  I.  580,  73  Atl.  309;  Carter  White  Lead 
Co.  V.  Kinlin,  47  Neb.  409,  66  N.  W.  536,  employment. 

e  Buhl  V.  Stephens,  84  Fed.  922 ;  see  Moore  v.  Vosburgh,  72  N.  Y.  S.  696, 
66  App.  Div.  223. 

6  ReJgart  v.  Coke  Co.,  217  Mo.  142,  117  S.  W.  61. 


§  405  LAW  OF  OPTION  CONTRACTS  168 

except  the  buyer  shall  accept  part  of  the  goods  ^o 
sold  and  actually  receive  the  same,  or  give  some- 
thing in  earnest  to  bind  the  bargain,  or  in  part 
payment,  or  that  some  note  or  memorandum  in 
writing  of  the  said  bargain  be  made  and  signed  by 
the  parties  to  be  charged  by  such  contract  or  their 
agents,  thereunto  authorized. '* 

We  are  here  concerned  with  the  sufficiency  of  the 
contract,  or  memorandum,  and  not  with  the  par- 
ticular act  which  takes  the  transaction  out  of  the 
statute.  It  is  well  to  note,  however,  that  the  statute 
does  not  apply  to  contracts  created  or  implied  by 
law,^  nor  to  obligations  arising  from  special 
statutes.^  The  purpose  of  the  statute  being  to  pre- 
vent oral  evidence  of  executory  contracts  only,  it 
is  ruled  the  statute  does  not  apply  to  a  contract 
fully  executed,^  nor  to  promises  implied  by  law,* 
nor,  in  certain  cases,  where  the  contract  has  been 
partly  performed.^ 

1  Smith  V.  Bradley,  (Conn.)  1  Eoot  150. 

2  Doolittle  V.  Dininny,  31  N.  Y.  350. 

8  Fisher  v.  Wilson,  18  Ind.  133,  conveyance  of  real  estate  executed ; 
Jarboe  v.  Severin,  85  Ind.  496;  Peabody  v.  Fellows,  177  Mass.  290, 
58  N.  E.  1019;  Suggett  v.  Cason,  26  Mo.  221;  Camp  v.  Barber,  87  Vt. 
235,  88  Atl.  812,  personal  property. 

4  The  law  implies  a  promise  to  pay  the  consideration  where,  pursuant 
to  an  oral  contract  to  convey  land,  deed  of  conveyance  is  delivered 
and  accepted.  Birch  v.  Baker,  85  N.  J.  L.  660,  90  Atl.  297 ;  Malzer  v. 
Schisler,  67  Ore.  356,  136  P.  114;  see  Eastman  v.  Dunn,  34  R.  I.  416, 
83  Atl.  1057,  involving  option ;  Keller  v.  Fitzgerrell,  158  HI.  App.  534, 
affirmed  249  111.  451,  94  N.  E.  926,  sale  fully  executed  and  purchase 
money  accepted;  Boone  v.  Coe,  153  Ky.  233,  154  S.  W.  900. 

B  See  Sec.  418. 


169         STATUTE  OF  FRAUDS — CONTEACT  OR  MEMORANDUM      §  406 

Sec.  406.  CONTRACT  OR  MEMORANDUM 
THEREOF.  ESSENTIAL  TERMS  OF  AGREE- 
MENT MUST  BE  IN  WRITING.  EVIDENCE. 

— The  agreement,  or  memorandum  thereof,  must 
not  only  be  in  writing  and  subscribed  by  the  party 
to  be  charged,  but  the  agreement,  or  memorandum, 
must,  also,  to  meet  the  requirements  of  the  statute, 
show  the  parties,^  set  forth  the  essential  terms  of 
the  agreement,-  describe  the  subject  matter  suffi- 

1  Mossie  V.  Cyrus,  61  Ore.  17,  119  P.  485,  624,  must  show  the  relation 

of  the  parties  as  seller  and  buyer. 

Clason's  Exrs.  v.  Bailey,  14  Johns.  (N.  Y.)  484,  sufficient  if  names  of 
parties  appear  in  body  of  memorandum,  though  not  signed. 

Anderson  v.  Wallace  Lumber  etc.  Co.,  30  Wash.  147,  70  P.  247,  suf- 
ficient where  name  of  corporation  appears  in  agreement,  when 
written  by  agent  who  signed  name  of  corporation  below  that  of 
vendor. 

2  Fogg  V.  Price,  145  Mass.  513,  14  N.  E.  741,  indefinite  as  to  price,  option 

giving  "refusal"  if  premises  are  for  sale. 

Price  to  be  offered  by  other  parties,  not  indefinite,  Pearson  v.  Home, 
139  Ga.  453,  77  S.  E.  387;  nor  as  to  time,  Id. 

Snow  V.  Nelson,  113  Fed.  353,  where  time  of  first  payment  not  fixed 
by  memorandum. 

Hilberg  v.  Greer,  172  Mich.  505,  138  N.  W.  201,  memorandum  indef- 
inite as  to  terms  and  time  of  payment,  ' '  purchase  price  to  be  $5500, 
interest  5  per  cent,  easy  terms. ' ' 

The  rule  is  stated  in  Fritz  v.  Mills,  (Cal.)  150  P.  375,  thus:  "The 
memorandum  must  contain  all  the  material  elements  of  the  contract; 
that  is,  it  must  show  who  is  the  seller  and  who  is  the  buyer,  what 
the  price  is  and  when  it  is  to  be  paid,  and  must  so  describe  the  land 
that  it  can  be  identified." 

In  some  states  by  statute,  or  by  judicial  interpretation,  the  consid- 
eration must  be  expressed  in  the  writing.  In  others  the  consideration 
need  not  be  expressed  in  the  writing.  See  Eeid  v.  Diamond  Plate- 
Glass  Co.,  85  Fed.  193,  29  C.  C.  A.  110;  Eeid  v.  Alaska  Packing 
Ass'n,  43  Ore.  429,  73  P.  337;  Ewing  v.  Stanley,  24  Ky.  L.  Kep. 
633,  69  S.  W.  724;  Chellis  v.  Grimes,  72  K  H.  337,  56  Atl.  742; 
Cooley  V,  Lobdell,  153  N.  Y.  596,  47  N.  E.  783 ;  White  v.  Dahlquist 
Mfg.  Co.,  179  Mass.  427,  60  N.  E.  791. 

Minute  entry  of  vote  of  school  board  as  memorandum,  McManus  v. 
City  of  Boston,  171  Mass.  152,  50  N.  E.  607. 


§  407  LAW  OF  OPTION   CONTRACTS  1 '  0 

ciently  for  identification,^  and,  in  some  jurisdic- 
tions, the  consideration  must  be  recited  or  shown/ 
Parol  evidence  is  not  admissible  to  supply  any 
essential  term  of  the  agreement,^  or  memorandum.^ 

Sec.  407.  CONTRACT  OR  MEMORANDUM 
THEREOF.  SUBSCRIBING  BY  PARTY  "TO 
BE  CHARGED. '^  AGENTS.— The  statute 
requires  the  writing  to  be  signed  or  subscribed  by 
the  party  to  be  charged  only,  or,  by  his  authorized 
agent.  ^ 

SEaston  v.  Thatcher,  7  Utah  99,  25  P.  728;  Barnes  v.  Hustead,  219  Pa. 
287,  68  Atl.  839 ;  Eggleston  v.  Wagner,  46  Mich.  610,  10  N.  W.  37 ; 
Wilkins  v.  Hardaway,  173  Ala.  57,  55  So.  817;  Pearson  v.  Home, 
139  Ga.  453,  77  S.  E.  387;  Broadway  H.  &  S.  v.  Decker,  47  Wash. 
586,  92  P.  445;  Scherck  v.  Moyse,  94  Miss.  259,  48  So.  513;  Eaton  v. 
Wilkins,  163  Cal.  742,  127  P.  71. 

4  Wall  V.  Eailway  Co.,  86  Wis.  48,  56  N.  W.  367 ;  Broadway  H.  &  S.  v. 
Decker,  supra;  Johnston  v.  Wadsworth,  24  Ore.  494,  34  P.  13,  seal 
is  expression  of  consideration. 
Not  necessary  to  state  the  price  where  it  has  been  received,  or  if  no 
price  is  agreed  on  and  the  property  has  been  sold  for  what  it  is 
reasonably  worth,  Taggart  v.  Hunter,  (Ore.)  150  P.  738. 

B  Eeigart  v.  Coke  Co.,  217  Mo.  142,  117  S.  W.  61 ;  Ward  v.  Hasbrouek, 
169  N.  Y.  407,  62  N.  E.  434;  Broadway  H.  &  S.  v.  Decker,  mpra. 
The  description  need  not  be  so  particular  as  to  render  resort  to  ex- 
trinsic  evidence   unnecessary.      The  description   may  be   in   general 
terms,  Eggleston  v.  Wagner,  supra. 

6  See  Walker  v.  Bamberger,  17  Utah  239,  54  P.  108;  Scherck  v.  Moyse, 
94  Miss.  259,  48  So.  513;  Wagniere  v.  Dunnell,  29  R.  I.  580,  73  Atl. 
309. 

1  Davis  V.  Robert,  89  Ala.  402,  8  So.  114,  18  A.  S.  R.  126;  Moses  v. 
McClain,  82  Ala.  370,  2  So.  741;  Vassault  v.  Edwards,  43  Cal.  458; 
Copple  V.  Aigeltinger,  167  Cal.  706,  140  P.  1073;  Perry  v.  Paschal, 
103  Ga.  134,  29  S.  E.  703,  overruling  dicta  in  75  Ga.  350;  Ellis  v. 
Bryant,  120  Ga.  890,  48  S.  E.  352;  Perkins  v.  Hadsell,  50  HI.  216, 
saying  Lawrenson  v.  Butler,  1  Sch.  &  Lef.  13,  often  overruled; 
Breen  v.  Mayne,  141  Iowa  399,  118  N.  W.  441;  Maynard  v.  Brown, 
41  Mich.  298,  2  N.  W.  30;  Peevey  v.  Haughton,  72  Miss.  918,  17 
So.  378,  18  So.  357,  48  A.  S.  R.  592;   Aiple  etc.  Co.  v.  Spelbrink, 


171  STATUTE  OF  FRAUDS — PARTY  TO  BE  CHARGED  §  407 

In  many  jurisdictions,  it  is  expressly  provided 
by  statute  that  the  authority  of  an  agent  to  execute 
an  agreement  on  behalf  of  his  principal,  required 
by  the  statute  to  be  in  writing,  must  also  be  in 
writing  and  subscribed  by  the  principal.^ 

A  lessor  is  not  bound  by  a  covenant  of  renewal, 
or  by  an  option  clause,  inserted  in  a  lease  by  his 
agent  who  is  not  authorized  to  do  so  in  writing.^ 

Where  defendant  and  K,  owners  of  certain  land, 
entered  into  a  partnership  for  the  purpose  of  sell- 
ing land,  and  K  authorized  defendant  to  exercise 
entire  management  and  control  thereof,  and  K  was 
thereafter  informed  that  defendant  had  given  an 
option  for  the  sale  of  land,  for  a  specified  price,  to 
plaintiff's  assignor  and  acquiesced  therein,  defen- 
dant's signature  to  the  option  was,  in  effect,  in 
behalf  of  himself  and  K,  and  was  sufficient  to  bind 
her  within  the  statute  of  frauds, though  defendant's 
offer  to  act  as  K's  agent  rested  in  parol.^ 

Where  a  land  contract  was  assigned  by  the 
vendee  and  the  vendor,  in  pursuance  thereof,  con- 
veyed to  the  assignee,  an  objection  by  a  third  party, 

211  Mo.  671,  111  S.  W.  480,  14  Ann.  Cas.  652;  Ide  v.  Leiser,  10 
Mont.  5,  24  P.  695,  24  A.  S.  R.  17;  Smith  v.  Gibson,  25  Neb.  511, 
41  N.  W.  360;  Miller  v.  Cameron,  45  N.  J.  Eq.  95,  15  Atl.  842, 
1  L.  R.  A.  554,  signed  by  vendee  and  suit  by  vendor  for  specific 
performance;  Smith's  Appeal,  69  Pa.  St.  474;  Borel  v.  Mead,  3 
N.  Mex.  84,  2  P.  222;  Gira  v.  Harris,  14  S.  D.  537,  86  N.  W.  624; 
Central  Land  Co.  v.  Johnson,  95  Va.  223,  28  S.  E.  175,  vendee; 
Monongah  Coal  etc.  Co.  v.  Fleming,  42  W.  Va.  538,  26  S.  E.  201; 
Cheney  v.  Cook,  7  Wis.  413;  Hodges  v.  Kowing,  58  Conn.  12,  18 
Atl.  979;  Krah  v.  Wassmer,  75  X.  J.  Eq.  109,  71  Atl.  404;  Vance  v. 
Newman,  72  Ark.  359,  80  S.  W.  574,  105  A.  S.  E.  42. 

2  See  Newlin  v.  Hoyt,  91  Minn.  409,  98  N.  W.  323. 

3  Eogan  V.  Arnold,  233  HI.  19,  84  N.  E.  58,  affirming  135  HI.  App.  281. 

4  Krcutzer  v.  Lynch,  122  Wis.  474,  100  N.  W.  887. 


§  408  LAW  OF  OPTION  CONTRACTS  172 

holding  under  a  lease  in  whicli  the  contract  was 
expressly  recognized,  that  such  contract  was  invalid 
because  executed  in  behalf  of  vendee  by  an  agent 
without  authority  in  writing,  is  without  merit.  The 
deed  by  the  vendor  ratified  the  contract  by  the 
agent.^ 

Sec.  408.  MODIFICATION  OF  TERMS. 
GENERALLY. — The  statute,  as  we  have  seen, 
requires  the  contract,  or  the  memorandimi  thereof, 
falling  within  its  provisions,  to  be  in  writing.  The 
writing  required  by  the  statute  is  one  setting  forth 
all  the  essential  terms  of  the  agreement,  and  this  is 
true  whether  the  writing  is  a  formal  contract  or  a 
memorandum.  From  this  it  follows  that  the  essen- 
tial terms  of  the  agreement  of  the  parties  may  not, 
under  the  statute,  be  evidenced  in  part  by  writing 
and  in  part  by  parol.  ^ 

A  modification  of  a  written  contract  may  be  with 
reference  to  some  essential  term  of  the  agreement 
or  with  reference  to  matters  or  stipulations  not 
deemed  essential.  The  rule  on  the  subject  seems  to 
be  well  established.  The  cases  substantially  agree 
that  no  modification  of  an  essential  term  of  the 
contract  by  an  oral  executory  agreement  between 
the  parties,  is  permissible.  The  conflict  in  the  cases 
arises  largely,  if  not  entirely,  from  the  point  of 
view,  as  to  whether  a  particular  stipulation  or  pro- 

5  Heman  v.  Wade,  140  Mo.  340,  41  S.  W.  740. 

1  Snow  V.  Nelson,  113  Fed.  353,  holding  the  effect  of  an  oral  modification 
is  to  render  the  whole  contract  oral. 
The  substitution  of  a  new  and  different  agreement  for  the  original, 
of  course,  falls  within  the  statute,   Clark  v.  Fej,  121  N.   Y.   470, 
24  N.  E.  703. 


173  STATUTE  OF  FRAUDS — EXTENSIONS  §  409 

vision  is  an  essential  term  of  the  contract.  If  it  is, 
then  the  modified  term  must  be  evidenced  by  writ- 
ing ;  if  it  is  not,  it  may  rest  in  parol. 

The  rule  requiring  the  modification  to  be  in 
writing,  however,  is  subject  to  the  qualification  that 
the  conduct  of  the  parties  growing  out  of  a  parol 
modification  may  be  such  as  make  applicable  the 
rule  of  estoppel.^ 

Sec.  409.  EXTENSION  OF  OPTION  TIME.— 
In  England  the  rule  formerly  was  that  the  mode  or 
time  of  performance  of  a  contract  within  the 
statute  of  frauds  could  be  changed  by  proof  of  an 
oral  executory  contract.^  The  rule  was  based  on 
the  distinction  between  the  contract  which  the 
statute  required  to  be  in  writing  and  its  perform- 
ance, to  which  it  was  held  the  statute  did  not  apply. 
The  later  rule  in  England,  however,  is  that  a  con- 
tract within  the  statute  can  not  be  modified  by  an 
oral  executory  contract.^ 

2  Oregon  &  W.  E.  Co.  v.  Elliott  B.  M.  &  L.  Co.,  70  Wash.  148,  126  P.  406. 

1  Cuff  V.  Penn,  1  Maule  &  S.  21, 

2  Stead  V.  Dawber,  10  Adol.  &  E.  57,  113  Eng.  Reprint  22;  Hickman  v. 

Haynes,  L.  R.  10  C.  P.  598;  Marshall  v.  Lynn,  6  Mees.  &  W.  109. 
In  MorreU  v.  Studd,  83  L.  J.  Ch.  114,  (1913)  2  Ch.  688,  109  L.  T.  628, 
however,  it  is  said  that  if  notice  of  acceptance  is  not  in  time,  the 
subsequent  conduct  of  the  proposer  in  continuing  to  negotiate  with 
the  offeree  for  three  months  after  his  acceptance  with  reference 
to  details  of  the  contract,  such  as  securing  the  purchase  money,  with- 
out suggesting  that  the  acceptance  was  out  of  time,  was  sufficient 
to  show  an  implied  agreement  either  to  enlarge  the  term  for  accept- 
ance, or  to  treat  the  actual  acceptance  as  a  proper  acceptance;  that 
such  an  implied  agreement  need  not  be  in  writing  to  satisfy  the 
statute  of  frauds,  because  it  is  not  a  verbal  alteration  of  the  agree- 
ment required  to  be  in  writing,  since  the  agreement  required  to  be 
in  writing  is  not  complete  and  therefore  not  an  agreement  until  a 
proper  acceptance  is  given,  and  before  an  acceptance  out  of  date 


§  410  LAW  OF  OPTION  CONTRACTS  174 

In  this  country  the  later  English  rule  has  quite 
generally  been  followed.  The  earlier  English  rule, 
however,  has  influenced  some  of  the  decisions  of 
our  courts,  as  will  be  seen  in  the  following  sections. 

Before  proceeding  with  the  presentation  of  the 
several  decisions  on  the  subject,  it  should  be  noted 
that  a  parol  extension  of  an  option  contract  falling 
within  the  statute  but  given  after  the  expiration 
of  the  option  time  limit,  is  invalid,  since,  in  such 
case,  the  option  has  ended  by  expiration  of  its  time 
limit  and  the  whole  contract  must  rest  upon  the 
parol  agreement  for  the  extension.* 

Sec.  410.  DECISIONS  HOLDING  PAROL 
EXTENSION  INVALID.— The  cases  we  are  to 
consider  now  are  those  involving  a  parol  executory 
agreement  for  extension  of  the  time  limit  of  the 
option  and,  also,  the  time  for  the  performance  of 
particular  stipulations  of  the  option. 

The  rule  to  be  deduced  from  these  decisions  is 
that,  in  the  absence  of  facts  justifying  the  applica- 
tion of  estoppel  against  the  party  orally  granting 
the  extension,  evidence  of  an  oral  extension  is  not 
admissible.^ 

can  be  treated  as  proper,  the  implied  or  verbal  agreement  must  of 
necessity  be  come  to.  The  Court  distinguished  the  leading  case  of 
Goss  V.  Nugent,  5  B.  &  Aid.  58,  as  deciding  only  that  where  a 
contract  falling  within  the  statute  of  frauds  is  once  made,  no  con- 
tract or  verbal  waiver  can  be  relied  on  to  substitute  a  different 
term  from  one  appearing  in  the  contract  itself. 

8  See  McConathy  v.  Lanham,  116  Ky.  735,  25  Ky.  L.  Eep.  971,  76  S.  W. 
535 ;  Thompson  v.  Robinson,  65  W.  Va.  506,  64  S.  E.  718. 

1  Lawyer  v.  Post,  109  Fed.  512,  47  C.  C.  A.  491;  Neldon  v.  Smith,  36 
N.  J.  L.  148;  Ladd  v.  King,  1  R.  I.  224,  51  Am.  Dec.  624;  .Tarraan 
V.  Westbrook,  134  Ga.  19,  67  S.  E.  403;  Adams  v.  Hughes,  (Tex.  Civ. 
App.)   140  S.  W.  1163;  Emerson  v.  Slater,   (U.  S.)   22  How.  28,  16 


175  STATUTE  OF  FRAUDS — PAROL  EXTENSIONS  §  410 

Under  the  Maryland  statute  of  frauds,  requiring 
a  contract  for  the  sale  of  flour  for  a  price  in  excess 
of  that  fixed  by  the  statute,  a  verbal  agreement  for 
the  extension  of  time  for  the  deliveries  is  not  admis- 
sible in  evidence  in  an  action  for  an  alleged  breach 
of  such  contract.^ 

A  verbal  extension  of  time  within  which  to  take 
timber  from  the  land  sold,  is  within  the  statute, 
and  must  be  in  writing  to  be  valid,  and  reliance  on 
the  verbal  extension  and  consequent  delay  in  taking 

L.  Ed.  360;  Swain  v.  Seamens,  (U.  S.)  9  Wall.  254,  19  L.  Ed.  554; 
Abell  V.  Munson,  18  Mich.  306,  100  Am.  Dec.  165;  Thompson  v. 
Robinson,  65  W.  Va.  506,  64  S.  E,  718;  Brown  v.  Sanborn,  21 
Minn.  402. 

1  In  Thomson  v.  Poor,  147  N.  Y.  402,  42  N.  E.  13,  it  is  said  the  rule  in 

New  York  is  not  authoritatively  settled,  but  Blood  v.  Goodrich, 
9  Wend.  68,  24  Am.  Dec.  121,  is  referred  to  as  holding  that  time  of 
performance  of  a  written  contract  for  sale  of  land  could  not  be 
extended  by  parol,  and  Blanchard  v.  Trim,  38  N.  Y.  225;  Fiynn  v. 
McKeon,  6  Duer.  203;  and  Stone  v.  Sprague,  20  Barb.  509,  as 
holding  to  the  contrary.  See,  also,  Hasbrouck  v.  Tappen,  15 
Johns.  200. 

Athe  V.  Bartholemew,  69  Wis.  43,  33  N.  W.  110,  5  A.  S.  R.  103,  sus- 
tains the  rule  but  decides  the  case  on  another  point. 

See  Piatt  v.  Butcher,  112  Cal.  634,  44  P.  1060,  extension  of  broker's 
agreement  and  holding  oral  agreement  for  extension  not  executed 
within  the  meaning  of  Civil  Code,  California,  section  1624,  providing 
that  a  contract  in  writing  may  be  altered  by  an  executed  oral  agree- 
ment; also  Hicks  v.  Post,  154  Cal.  22,  96  P.  878;  Standard  Box  Co. 
V.  Mutual  Biscuit  Co.,  10  Cal.  App.  746,  103  P.  938. 

The  rule  of  the  text  is  also  applied  by  some  decisions  to  a  case  where 
the  modified  term  is  one  which,  like  time  of  performance,  is  ex- 
pressly fixed  by  the  written  contract.  If  the  parties  have  expressly 
stipulated,  then  parol  evidence  of  a  modification  is  not  permissible, 
Bonieamp  v.  Starbuck,  25  Okl.  483,  106  P.  839;  Seller  v.  Robinson, 
50  Mich.  264,  15  N.  W.  448;  Jarman  v.  Westbrook,  134  Ga.  19, 
67  S.  E.  403. 

2  Walter  v.  Victor  G.  Bloede  Co.,  94  Md.  80,  5U  Atl.  453. 


§  411  LAW  OF  OPTION  CONTRACTS  176 

off  the  timber,  is  not  such  fraud  as  will  take  the 
case  out  of  the  statute.^ 

Sec.  411.  DECISIONS  HOLDING  PAROL 
EXTENSION  VALID.— The  decisions  falling 
under  this  section  divide  themselves  into  several 
classes.  First,  those  holding  that  an  extension,  in 
itself,  does  not  constitute  a  contract,  that  is,  does 
not  work  a  rescission  of  the  original  contract  by 
substitution  of  a  new  contract  and,  therefore,  is  not 
within  the  statute.^  Secondly,  those  cases  where 
the  oral  contract  has  been  executed,  on  the  theory 
that  an  executed  oral  contract  takes  the  place  of 
the  written  contract.^  Thirdly,  that  numerous  class 
of  decisions  based  on  estoppel  or  waiver.^  To  these 
may  be  added  some  miscellaneous  decisions  to 
which  reference  will  be  made  in  the  notes.^ 

8  Clark  V.  Guest,  54  Ohio  St.  298,  43  N.  E.  862 ;  also  Hicks  v.  Post,  154 
Gal.  22,  96  P.  878;  Hasbrouck  v.  Tappen,  (N.  Y.)  15  Johns.  200. 

iStamey  v.  Hemple,  173  Fed.  61,  97  C.  C.  A.  379;  Stearns  v.  Hall,  63 
Mass.  (9  Cush.)  31;  Whittier  v.  Dana,  92  Mass.  326. 
Cummins  v.  Beavers,  103  Va.  230,  48  S.  E.  891,  893,  106  A.  S.  R.  881, 
1  Ann.  Cas.  986,  when  supported  by  some  new  and  sufficient  con- 
sideration; Hetzel  V.  Lyon,  87  Neb.  261,  126  N.  W.  997,  broker's 
agreement. 

2-Walker  v.  Bamberger,  17  Utah  239,  54  P.  108;  Bailey  v.  Bishop,  152 
N.  C.  383,  67  S.  E.  968;  Blake  v.  J.  Neils  L.  Co.,  Ill  Minn.  513, 
127  N.  W.  450;  Gerard-Fillio  Co.  v.  McNair,  68  Wash.  321,  123 
P.  462;  Phillips  v.  Holland,  149  Wis.  524,  136  N.  W.  191,  consid- 
eration for  extension  paid;  Swon  v.  Stevens,  143  Mo.  384,  45  S.  W. 
270,  consideration  for  extension  paid ;  Fremont  Carriage  Mfg.  Co.  v. 
Thomsen,  65  Neb.  370,  91  N.  W.  376,  agreement  to  repurchase  shares 
of  stock. 

8  MeCarty  v.  Helbing,  (Ore.)  144  P.  499.     See  next  section. 

4  Statute  does  not  apply  to  an  option  for  extension  of  time  of  a  lease- 
hold term  contained  in  the  lease.  Remm  v.  Landon,  43  Ind.  App.  91, 
86  N.  E.  973;  McClelland  v.  Rush,  150  Pa.  57,  24  Atl.  354,  waiver 
of  written  notice. 


177   STATUTE  OP  FRAUDS — PAROL  EXTENSIONS — ESTOPPEL  §  412 

It  will  be  observed  that  mth  reference  to  many 
of  the  decisions  cited  in  this  section  as  well  as  those 
cited  in  the  preceding  sections,  that  while,  in  a 
particular  case,  the  court  lays  down  the  law  as  a 
matter  of  principle,  the  decision  is  made  to  turn 
on  the  application  of  some  equitable  rule. 

Sec.  412.    EXTENSIONS.    ESTOPPEL.— As 

we  pointed  out  in  a  preceding  section,  the  rule 
established  by  the  decisions  requiring  the  agree- 
ment for  an  extension  to  be  in  writing,  is  qualified 
by  the  rule  of  estoppel. 

Equity  will  not  permit  the  statute  to  be  used  to 
perpetrate  a  fraud.  If  the  optionee  is  induced  by 
a  subsequent  oral  agreement  for  an  extension  of 
the  time  of  pajnnent,  to  make  default  in  payment 
as  called  for  by  the  written  option,  the  optionor  can 
not  invoke  the  statute  in  equity  and  thus  make  the 
oral  agreement  invalid.^ 

4  Contra,  where  lease  requires  written  notice  and  the  extension  is  for 
three  years,  the  statute  declaring  void  oral  lease  for  more  than  one 
year,  Beller  v.  Eobinson,  50  Mich.  264,  15  N.  W.  448. 

In  Packer  v.  Stewart,  34  Vt.  27,  it  is  held  that  when  the  contract  is 
taken  out  of  the  statute  by  payment  of  earnest  money,  it  may  be 
varied  by  parol  as  to  time  of  its  performance. 

Parol  extension  fixing  date  of  election  beyond  one  year  would  come 
within  the  statute,  see  Sec.  404. 

iKingsley  v.  Kressly,  60  Ore.  167,  118  P.  678,  Anno.  Cases  1913E,  746; 
Neppach  v.  Kailroad,  46  Ore.  374,  80  P.  482,  7  Ann.  Gas.  1035;  see 
Witman  v.  City  of  Reading.  191  Pa.  134,  43  Atl.  140 ;  Sheppard  v. 
Eosenkrans,  109  Wis.  58,  85  N.  W.  199,  83  A.  S.  R.  886;  Thompson 
V.  Poor,  147  N.  Y.  402,  42  N.  E.  13;  Ladd  v.  King,  1  R.  I.  224, 
51  Am.  Dec.  624;  Doar  v.  Gibbes,  1  Bailey  Eq.  (S.  C.)  371;  Wilkins 
V.  Evans,  1  Del.  Ch.  156. 

Packer  v.  Stewart,  34  Vt.  27,  oral  agreement  extending  time  of  per- 
formance of  oral  contract  taken  out  of  statute  by  part  payment, 
valid. 

See  Hasbrouck  v.  Tappen,  15  Johns.  200. 

12 — Option  Contracts. 


§  412  LAW  OF  OPTION  CONTRACTS  178 

Accordingly,  where  the  optionee  was  arranging 
to  raise  money  to  make  a  tender  within  the  option 
time,  and  was  requested  by  the  optionor  to  defer 
the  tender  for  a  year,  to  which  the  optionee  agreed, 
and  thereafter  and  within  the  year,  tendered  the 
amount  required,  which  was  refused,  it  was  held 
the  optionor  was  estopped  to  claim  the  agreement 
was  not  enforceable  under  the  statute.^ 

So,  where  upon  presenting  an  abstract  from 
which  it  was  found  that  the  title  was  defective,  and 
by  mutual  agreement  between  the  parties,  the  time 
within  which  the  transaction  was  to  be  closed  was 
extended  thirty  daj^s,  and  within  the  thirty  days 
the  vendee  tendered  performance  in  accordance 
with  the  provisions  of  the  agrefement.^ 

So,  where  the  optionor,  to  get  the  optionee  to 
make  an  advance  payment,  induced  him  to  believe 
that  by  making  the  advancement,  a  certain  install- 
ment, maturing  at  a  certain  subsequent  date,  would 
be  extended/ 

2  Alston  V.  Connell,  140  N.  C.  485,  53  S.  E.  292 ;  see  Hurlburt  v.  Fitz- 
patrick,  176  Mass.  287,  57  N.  E.  464. 
The  circumstances  must  be  such  as  to  constitute  "an  independent 
equity ' ' ;  mere  breach  of  the  oral  agreement  is  not  such  equity, 
Henderson  v.  Henrie,  68  W.  Va.  562,  71  S.  E.  172,  34  L.  E.  A.  (N.  S.) 
628. 

SKissack  v.  Bourke,  224  HI.  352,  79  N.  E.  619;  this  decision  was  put 
on  the  ground  that  any  party  has  a  right  to  waive  a  strict  com 
pliance  with  the  terms  of  the  contract  and  that  proof  of  such 
waiver  may  consist  of  acts  in  pais ;  s.  e.  242  111.  233,  89  N.  E.  990. 

4  Seott  V.  Hubbard,  67  Ore.  498,  136  P.  653 ;  this  decision  was  placed 
on  the  ground  that  where  a  party  to  a  written  contract  orally 
agrees  to  extend  the  time  for  its  payment  and  puts  the  other 
party  off  his  guard,  he  is  estopped  from  taking  advantage  of  the 
non-compliance  with  the  terms  of  the  writing  and  the  other  party 
will  have  the  extended  time  within  which  to  discharge  the  modified 
agreement. 


179         STATUTE  OF  FRAUDS — PAROL  EXTENSIONS — WAIVER      §  413 

Sec.  413.     EXTENSIONS.     WAIVER.— The 

courts  sometimes  base  their  decisions  upon  the  rule 
of  waiver.  The  theory  is  that  the  statute  does  not 
condenui  as  void  the  particular  contracts  falling 
within  its  provisions,  and  being  intended  as  a  pro- 
tection to  the  party  to  be  charged,  there  is  nothing 
to  prevent  him  from  waiving  the  protection  of  the 
statute.  Accordingly,  it  is  held  that  where  the 
conduct  of  the  party  to  be  charged  is  such  as  to 
amount  to  a  waiver,  the  court  will  not  permit  him 
to  interpose  the  defense. 

A  New  York  case  is  typical  of  this  class  of  deci- 
sions. Plaintiff  and  defendant  entered  into  an 
agreement  by  the  terms  of  which  plaintiff  sold  to 
defendant  the  bark  on  certain  trees  at  a  specified 
price,  not  less  than  1000  cords  to  be  peeled  each 
year  for  a  period  of  ten  years.  In  1886  defendant 
peeled  only  500  cords.  Plaintiff  brought  suit  to 
recover  damages  for  the  breach  and  defendant 
answering  set  up  an  oral  agreement  between  the 
parties  limiting  the  amount  to  be  peeled  in  1886  to 
500  cords.  Plaintiff  orally  consented  to  the  modifi- 
cation and  defendant  acting  thereon  peeled  only 
500  cords  for  the  year  1886,  and,  of  course,  relying 

4  Kingston  V.  Walters,  16  N.  M.  59,  113  P.  594,  the  Court  saying  that 
where  a  representation  as  to  the  future  relates  to  an  intended 
abandonment  of  an  existing  right  and  is  made  to  influence  others 
and  they  have  been  influenced  by  it  to  act,  it  operates  as  estoppel. 

The  rule  of  estoppel,  however,  is  not  available  to  the  optionee  unless 
he  has  timely  and  properly  elected  and  performed,  Hanes  v.  Newport, 
134  ni.  App.  453. 

The  equitable  rule  may,  on  proper  facts,  be  invoked  by  the  optionor, 
Daniels  v.  Rogers,  108  App.  Div.  338,  96  N.  Y.  S.  624. 

Evidence  to  establish  a  parol  modification  of  a  written  contract  must 
be  clear,  etc.,  Eagle  v.  Pettis,  109  Ark.  310,  159  S.  W.  1116.  See 
Scott  V.  Hubbard,  67  Ore.  498,  136  P.  653,  holding  evidence  of  parol 
extension  is  admissible. 


§  413  LAW  OF  OPTION  CONTRACTS  180 

on  the  oral  agreement  permitted  the  contract  time 
to  pass  without  performance  of  the  original  con- 
tract. The  court  said  plaintiff  was  estopped  on  the 
facts  to  recall  his  consent  to  the  modification  and 
to  treat  the  non-performance  within  the  original 
time  as  a  breach ;  that  the  original  contract  was  not 
changed  by  such  waiver  but  that  it  stood  as  an 
answer  to  the  other  party  (plaintiff)  who  sought 
to  recover  damages  for  non-performance  induced 
by  an  unrecalled  consent,  and  referring  to  contracts 
both  within  and  without  the  statute  of  frauds  said 
the  rule  is  well  understood  that  if  there  is  forbear- 
ance at  the  request  of  a  party  the  latter  is  pre- 
cluded from  insisting  upon  non-performance,  at 
the  time  originally  fixed  by  the  contract,  as  a 
ground  of  action,  and  then  remarked  that  the  case 
was  not  so  manifest  where  the  party  who  solicited 
the  forbearance  alleged  the  consent  of  the  other 
party  as  an  excuse  for  non-performance.  It  was 
held  plaintiff  was  estopped  and,  therefore,  was  not 
entitled  to  recover  damages.  The  court,  however, 
clearly  lays  down  the  rule  that  evidence  of  a  parol 
agreement  to  prove  a  modification,  was  not  admis- 
sible, but  was  admissible  to  prove  a  waiver  of  the 
provision  as  to  time  of  performance.^ 

1  Thompson  v.  Poor,  147  N.  Y.  402,  42  N.  E.  13 ;  also  Scheerschmidt  v. 
Smith,  74  Minn.  224,  77  N.  W.  34;  Kissack  v.  Bourke,  224  111.  352, 
79  N.  E.  619;  Smiley  v.  Barker,  83  Fed.  684,  28  C.  C.  A.  9;  McClel- 
land V.  Rush,  150  Pa.  57;  24  Atl.  354;  Morrell  v.  Stiidd,  83  L.  J.  Ch. 
114  (1913),  2  Ch.  648,  109  L.  T.  628. 
The  doctrine  of  waiver,  if  limited  to  the  class  of  cases  out  of  which 
it  was  evolved,  is  a  wholesome  one.  But  when  it  is  attempted  to 
apply  it  to  other  cases  much  confusion  arises,  as  attested  by  the 
decisions  of  the  courts.  The  rule  grew  out  of  cases  involving  con- 
tracts for  the  periodical  payment  of  money,  or  the  performance  of  a 
series  of  acts,  like  the  payment  of  rent  under  a  lease,  premium  on 
an  insurance  policy,  and  barking  a  certain  number  of  trees  annually, 


181         STATUTE  OF  FEAUDS ORAL  ELECTION        §  414 

Sec.  414.  ORAL  ELECTION  OF  ACCEPT- 
ANCE. REQUIREMENTS  OF  PARTICULAR 
STATUTES. — An  election  under  an  option  con- 
tract not  required  by  the  statute  of  frauds  to  be  in 
writing,  as  well,  also,  as  the  acceptance  of  an  offer 
of  a  contract  which  does  not  fall  within  the  pro- 
as in  the  New  York  case  cited,  and  such  like,  tlie  time  of  perform- 
ance in  the  contract  being  fixed  and  frequently  made  of  its  essence, 
and  the  debtor  being  penalized  and  his  rights  forfeited  for  his 
failure  strictly  to  perform.  In  these  cases,  if  the  creditor  receives 
payments,  after  the  contract  time,  as  a  matter  of  practice,  or  under 
an  oral  agreement  or  understanding,  he  is  said  to  waive  a  strict 
timely  performance  of  the  contract ;  that  is,  to  waive  payment  or 
performance  on  the  day  stipulated,  and  therefore,  if  the  debtor, 
relying  upon  the  conduct,  or  the  oral  agreement  or  understanding, 
fails  to  make  payment,  or  perform  the  act,  on  the  precise  day  fixed 
by  the  contract,  the  creditor  may  not  forfeit  his  rights  under  the 
contract  by  reason  of  such  default.  This  is  the  so-called  doctrine  of 
waiver,  and  under  it  the  Court  will  not  permit  the  creditor  to  forfeit 
the  rights  of  the  debtor.  The  doctrine  is  one  akin  to  equitable 
estoppel,  and  like  estoppel,  is  based  upon  acts.  It  does  not  modify 
or  change  the  original  contract,  for  the  creditor  may  give  notice  of 
his  intention  to  insist  upon  a  strict  performance  of  the  contract 
henceforth,  and  thus  hold  the  debtor  to  a  strict  performance  as  to 
all  subsequent  payments  or  acts.  It  will  be  seen,  therefore,  that 
the  rule  of  waiver  has  no  application  to  an  option  contract  required 
by  the  Statute  of  Frauds  to  be  in  writing.  The  optionee  under  an 
option  contract,  prior  to  election,  has  no  rights  in  the  property 
subject  to  forfeiture,  and  that  doctrine  has  no  application  to  such 
contracts.  Again,  election  is  a  single  act,  and,  consequently,  there  is 
no  prior  conduct  upon  which  to  base  the  doctrine  of  waiver.  Waiver, 
therefore,  if  applied  to  election,  must  be  based  upon  the  oral  agree- 
ment and  no  Court  has  yet  held,  so  far  as  we  know,  that  a  mere 
naked,  oral  agreement,  extending  time  under  a  contract  within 
the  Statute  of  Frauds,  works  either  a  waiver  or  estoppel.  Unless, 
therefore,  there  is  something  to  supplement  the  oral  agreement — 
that  is,  facts  and  conduct  on  the  part  of  the  optionor,  relied  upon 
by  the  optionee,  which  amount  to  an  equitable  estoppel — ^the  doctrine 
of  waiver  has  no  application,  and  it  has  no  application,  even  in  the 
case  stated,  for,  if  there  is  such  'conduct,  the  facts  bring  it  within 
the  rule  of  estoppel  and  not  within  the  rule  of  waiver.  As  thus 
viewed,  it  would  seem  that  equitable  estoppel  is  something  essen- 
tially different  from  waiver.     See  Sees.  868,  869. 


§  414  LAW  OF  OPTION  CONTRACTS  182 

visions  of  that  statute,  may  be  oraP  unless,  by  the 
terms  of  the  option,  or  of  the  offer,  a  written  elec- 
tion or  acceptance  is  required,^  and  unless,  also, 
the  optionee  is  required  to  perform  some  act  as  a 
substitute  for,  or  in  addition  to,  the  formal  notice 
above  referred  to.^ 

Where  the  option  contract  or  offer  falls  within 
a  particular  or  special  statute,  the  character  and 
sufficiency  of  the  election,  or  acceptance,  required 
must  be  determined  by  reference  to  the  provisions 
of  that  statute. 

Thus,  the  Alabama  statute  provides  that  a  con- 
tract for  the  sale  of  land,  etc.,  is  void  unless  the 
purchase  money,  or  a  portion  thereof,  be  paid  and 
the  purchaser  be  put  into  possession  of  the  land  by 
the  seller.  The  owner  of  land  gave  a  written  lease 
with  option  to  the  lessee  to  purchase.  An  election 
to  purchase  under  the  option  was  made  by  the 
agent  of  the  lessee  whose  authority  to  do  so  was 
not  in  writing  as  required  by  the  same  statute,  and 
it  was  held  that  since  neither  part  of  the  purchase 
money  was  paid,  nor  possession  taken  under  the 
option,  the  election,  in  law  being  oral,  was  insuf- 
ficient.'' 

1  Sees.  415,  816. 

2Bosshardt  v.  Crescent  Oil  Co.,  171  Pa.  109,  32  Atl.  1120;   Eastman  v. 
Dunn,  34  R.  I.  416,  83  Atl.  1057. 

3  As  payment  of  part  of  the  price,  in  which  case,  of  course,  payirent  is 

part  of  the  election  or  acceptance,  Wardell  v.  Williams,  62  Mich.  50, 
28  N.  W.  796,  4  A.  S.  R.  814. 
Also  Eastman  v.  Dunn,  34  R.  I.  416,  83  Atl.  1057. 

4  Linn  v.  McLean,  85  Ala.  250,  4  So.  777;   see,  also,  Jarman  y.  West- 

brook,  134  Ga.  19,  67  S.  E.  403. 


183         STATUTE  OF  FRAUDS ORAL  ELECTION        §  415 

Sec.  415.  SAME.  ORAL  ELECTION  SUF- 
FICIENT IN  MOST  STATES.— On  the  other 
hand,  under  provisions  of  statutes  common  to  many 
jurisdictions,  covering  the  sale  of  real  and  personal 
property,  and  requiring  merely  that  the  conti-act 
shall  be  in  writing,  or  evidenced  by  a  memorandum, 
and  subscribed  by  the  party  to  be  charged,  it  is 
held  that  so  far  as  the  statute  is  concerned,  an  oral 
election  by  the  optionee  of  an  option  contract  fall- 
ing within  its  provisions,  is  sufficient  to  bind  the 
optionor,  provided  the  contract,  or  the  memoran- 
dum thereof,  or  the  offer  or  proposal,  as  the  case 
may  be,  is  in  writing  and  subscribed  by  the 
optionor,^  and  provided  further,  that  all  the  essen- 

4  Newlin  v.  Hoyt,  91  Minn.  409,  98  N.  W.  323,  also  involved  the  authority 
of  the  agent  to  make  an  oral  acceptance.  In  this  case  there 
was  an  exchange  of  lands  with  option  to  one  of  the  parties  to 
examine  the  property  of  the  other  and  if  satisfied  to  "accept  the 
contract ' '  and  it  was  held  that  a  written  acceptance  was  necessary. 
Parol  acceptance  is  not  sufficient  under  Nebraska  statute  requiring  the 
contract  to  be  subscribed  by  both  parties,  Spence  v.  Apley,  4  Neb. 
358,  94  N.  W.  109;  Smith  v.  Gibson,  25  Neb.  511,  41  N.  W.  360. 
The  Montana  and  Michigan  statutes  require  the  writing  to  be  signed 
by  the  party  by  whom  the  sale  is  to  be  made,  Ide  v.  Leiser,  10  Mont. 
5,  24  P.  695,  24  A.  S.  E.  17;  Maynard  v.  Brown,  41  Mich.  298. 
2  N.  W.  30. 

In  Oklahoma  an  oral  acceptance  of  an  order  for  cement  in  excess  of 
$50  is  invaUd,  Altoona  Portland  C.  Co.  v.  Burbank,  (Okl.)  143  P. 
845. 

1  Sanborn  v.  Flagler,  91  Mass.  (9  Allen)  474;  Lydig  v.  Braman,  177 
Mass.  212,  58  N.  E.  696;  Himrod  F.  Co.  v.  Cleveland  &  M.  E.  Co.,  22 
Ohio  St.  451;  Breen  v.  Mayne,  141  Iowa  399,  118  N.  W.  441;  Bogle 
V.  Jarvis,  58  Kan.  76,  48  P.  558,  offer  by  letter  orally  accepted,  and 
executed  in  part;  Smith  v.  Gibson,  25  Neb.  511,  41  N.  W.  360 
option  in  lease;  George  etc.  Co.  v.  Maxwell,  78  Ohio  St.  54,  84  N.  E 
595,  option  to  lease;  Smith's  Appeal,  In  re,  69  Pa.  474;  Gradle  v 
Warner,  140  HI.  123,  29  N.  E.  1118,  option  in  lease;  Souffrain  v 
McDonald,  27  Ind.  269;  Krah  v.  Wassmer,  75  N.  J.  Eq.  109,  71  Atl 
404,  affirmed  78  N.  J.  Eq.  305,  81  Atl.  1133;  Copple  v.  Aigeltinger 
167  Cal.  706,  140  P.  1073;  Willis  v.  Ellis,  98  Miss.  197.  53  So.  498: 
Maine  v.  Howell,  7  Ga.  App.  311,  66  S.  E.  804;   Jarnian  v.  West 


§  415  LAW  OF  OPTION  CONTRACTS  184 

tial  terms  of  the  contract  are  set  forth  in  the  writ- 
ing or  memorandum,^  for,  the  election  being  oral, 
if  the  essential  terms  of  the  contract  are  not  set 
forth  in  the  written  option  or  written  offer,  or  a 
memorandum  thereof,  there  is  no  contract  to  which 
an  oral  acceptance  alone  can  give  legal  life.^  And 

brook,  134  Ga.  19,  67  S.  E.  403;  Friendly  v.  Elwert,  57  Ore.  599, 
105  P.  404,  112  P.  1085;  Warner  v.  Willington,  3  Drew.  523,  25 
L.  J.  Ch.  662;  Smith  v.  Neale,  2  C.  B.  (N.  S.)  67,  26  L.  J.  C.  P. 
143,  3  Jut.  (N.  S.)  516;  Reuss  v.  Picksley,  L.  R.  1  Exch.  342,  12 
Jur.  (N.  S.)  628,  35  L.  J.  Ch.  218,  15  L.  T.  Rep.  25,  14  Wkly.  Rep. 
924;  Stewart  v.  Eddowes,  L.  R.,  43  L.  J.  C.  P.  204,  9  C.  P.  311, 
30  L.  T.  Rep.  333,  22  Wkly.  Rep.  534;  Dickinson  v.  Dodds,  L.  R. 
2  Ch.  Div.  463,  34  L.  T.  (N.  S.)  607;  Eastman  v.  Dunn,  34  R.  I.  416, 
83  Atl.  1057. 

1  Fox  V.  Hawkins,  135  N.  Y.  S.  245,  distinguishing  Wadiek  v.  Mace,  191 

N.  Y.  1,  83  N.  E.  571,  and  Levin  v.  Dietz,  194  N.  Y.  376,  87  N.  E. 
454,  20  L.  R.  A.  (N.  S.)  251,  and  referring  to  Carney  v.  Pendleton, 
139  App,  Div.  152,  123  N.  Y.  S.  738,  where  it  is  said  that  in  the 
Wadiek  case  the  decision  was  put  on  the  ground  the  agreement  ex- 
pressly waived  the  remedy  of  specific  performance,  and  in  the 
Levin  case  there  was  a  withdrawal  before  acceptance.  See,  also. 
Mason  v.  Decker,  72  N.  Y.  595,  28  Am.  Rep.  190,  oral  acceptance. 
There  are  cases  holding  to  the  contrary,  Athe  v.  Bartholomew,  69  Wis. 
43,  33  N.  W.  110,  5  A.  S.  R.  103,  where  time  was  fixed;  Lanz  v. 
McLaughlin,  14  Minn.  72;  Newberger  v.  Adams,  92  Ky.  26,  17 
S.  W.  162,  13  Ky.  L.  Rep.  339;  Goodspeed  v.  Wiard  Plow  Co.,  45 
Mich.  322,  7  N.  W.  902;  Wilkinson  v.  Havenrich,  58  Mich.  574, 
26  N.  W.  139;  Solomon  Mier  Co.  v.  Hadden,  148  Mich.  488,  111 
N.  W.  1040,  118  A.  S.  R.  586;  Foster  v.  New  York  &  T.  L.  Co., 
2  Tex.  Civ.  App.  505,  22  S.  W.  260;  contra,  Anderson  v.  Tinsley, 
(Tex.  Civ.  App.)  28  S.  W.  121;  Rector  Provision  Co.  v.  Sauer, 
69  Miss.  235,  13  So.  623. 

2  Pettibone  v.  Moore,  27  N.  Y.  S.  455,  75  Hun.  461 ;  Black  v.  Crowthers, 

74  Mo.  App.  480 ;  Monahan  v.  Allen,  47  Mont.  75,  130  P.  768. 
Written  acceptance  of  oral  offer  which   acceptance  does  not  contain 
the  terms  of  the  contract  is  invalid,  Washington  Ice  Co.  v.  Webster, 
62  Me.  341,  15  Am.  Rep.  462 ;  see  Gummer  v.  Trustees,  45  Wis.  384, 
oral  acceptance  of  written  offer  to  purchase. 

8  Where  the  offer  or  the  option  contains  all  of  the  essential  terms  of  the 
contract,  an  acceptance,  or  an  election,  is  nothing  more  than  the 
performance  (it  is  not  a  term)  of  the  contract,  when  the  writing 
leaves  the  kind  of  notice  and  the  mode  of  its  communication  to 
implication,  see  Bogle  v.  Jarvis,  58  Kan.  76,  48  P.  558. 


185         STATUTE  OF  FRAUDS ORAL  ELECTION        §  416 

in  this  connection  it  is  pertinent  to  remark  that  an 
option,  or  a  memorandum  thereof,  defective  in  the 
particular  above  mentioned,  can  not  be  helped  out 
or  supplemented  by  an  oral  election,  as  the  contract 
would  rest  in  parol  and,  therefore,  be  invalid/ 
And  further,  that  an  oral  election  which  is  condi- 
tional, that  is,  varies  any  essential  term  of  the 
original  written  option  contract,  as  well  as  an  oral 
counter  proposition,  clearly  falls  within  the  pro- 
vision of  the  statute,  since  the  new,  but  essential, 
term  of  the  contract  would  rest  in  parol  and  the 
whole  transaction  would  fall  within  the  statute." 

Sec.  416.  ORAL  ELECTION  OR  ACCEPT- 
ANCE. MUTUALITY.— In  the  next  preceding 
section  the  rule  was  considered  from  the  viewpoint 
that  the  optionee  was  seeking  to  enforce  the  option 
contract  and  that  the  optionor  was  the  party  to  be 
charged.  An  oral  election  or  acceptance  by  the 
optionee  is  sufficient  to  charge  the  optionor  who  has 
subscribed  the  option,  but  it  is  not  sufficient,  at  the 
suit  of  the  optionor,  to  charge  the  optionee  who  has 
not  subscribed  written  evidence  of  his  election,  or 
otherwise  bound  himself  to  the  performance  of  the 
same.^ 

This  situation,  on  first  impression,  would  seem  to 
be  one  at  variance  with  the  requirements  of  the 

4  Snow  V.  Nelson,  113  Fed.  353. 

5  Lewis  V.  Johnson,  123  Minn.  409,  143  N.  W.  1127 ;  see  Gradle  v.  Warner, 

140  HI.  123,  29  N.  E.  1118;  Newberger  v.  Adams,  92  Ky.  26,  17 
S.  W.  162,  13  Ky.  L.  Rep,  339;  Wardell  v.  Williams,  62  Mich.  50, 
28  N.  W.  796,  4  A.  S.  R.  814;  Farwell  v.  Lowther,  18  Dl.  252; 
Waul  V.  Kirkman,  27  Miss,  823;  see  Willis  v.  Ellis,  supra. 

1  See  next  section. 


§  416  LAW  OP  OPTION  CONTRACTS  186 

rule  of  mutuality,  but  it  is  not.^  There  are  no 
equitable  principles  as  distinguished  from  legal 
principles,  involved  in  the  mere  act  of  election  or 
acceptance.  It  is  the  performance  of  a  condition 
imposed  by  the  terms  of  the  option  contract,  the 
effect  of  the  performance  of  which  is  to  turn  the 
option  into  a  bilateral  contract  and  place  the 
optionee  in  a  position  where  he  may  enforce  his 
rights  growing  out  of  the  contract.  And  besides 
the  Statute  of  Frauds,  so  far  as  involved  here,  is  a 
mere  rule  of  evidence.  When,  however,  it  is  sought 
to  enforce  such  rights,  in  a  court  of  equity,  it  is 
then  that  the  rule  of  mutuality  becomes  applicable. 
So  that  it  can  be  laid  down  that  while  an  oral  elec- 
tion or  acceptance  by  the  optionee  is  sufficient  to 
meet  the  requirements  of  the  Statute  of  Frauds  as 
a  rule  of  evidence,  it  is  not  sufficient  to  meet  the 
requirements  of  the  equitable  rule  of  mutuality, 
and  that  unless  the  optionee  has  done  some  act,  such 
as  filing  a  complaint  for  specific  enforcement  of 
the  contract,  the  effect  of  which  is  to  bind  him,  by 
writing  or  otherwise,  to  the  performance  of  the 
contract  at  the  instance  of  the  optionor,  the  optionee 
has  no  standing  in  a  court  of  equity^  as  a  plaintiff, 
where  that  defense  is  interposed.* 

2  Alabama  etc.  Ins.  Co.  v.  Oliver,  82  Ala.  417,  2  So.  445,  saying,  ' '  The 

difBculty  ia  not  that  the  contract  or  agreement  is  not  mutual,  but 
that  each  party  has  not  corresponding  evidence  of  it. ' ' 

3  The  effect  of  lack  of  mutuality  of  remedy  and  lack  of  evidence  requisite 

for  proof  of  the  contract  does  not  arise  at  law  where  the  statute 
requires  the  signature  only  of  the  party  to  be  charged.  Alabama 
etc.  Ins.  Co.  v.  Oliver,  supra. 

4Bosshardt  &  W.  Co.  v.  Crescent  Oil  Co.,  171  Pa.  St.  109,  32  Atl.  1120; 
Ellis  V.  Bryant,  120  Ga.  890,  48  S.  E.  352,  letters;  Vassault  v. 
Edwards,  43  Cal.  458;  Levin  v.  Dietz,  194  N.  Y.  376,  87  N.  E.  454, 
20  L.  E.  A.  (N.  S.)  251;  Krah  v.  Wassmer,  75  N.  J.  Eq.  109,  71  Atl. 


187         STATUTE  OF  FRAUDS ORAL  ELECTION        §  417 

Sec.  417.  SAME.  RIGHTS  OF  OPTIONOR 
UNDER  ORAL  ELECTION.— The  question 
whether  the  optionee,  by  his  oral  election,  has 
raised  a  contract  which  can  be  enforced  by  the 
optionor  does  not  seem  to  have  been  directly 
decided.  The  occasion  for  a  decision  on  this  point 
would  necessarily  be  extremely  rare  since  if  the 
optionee  does  not  desire  to  elect,  he  permits  the 
option  to  lapse.  ^  However,  there  seems  to  be  an 
assumption  running  through  the  cases  that  the 
optionor,  in  the  case  stated,  would  not  be  able  to 
prove  a  contract  meeting  the  requirements  of  the 
statute,  that  is  to  say,  a  contract  subscribed  by  the 
party  to  be  charged.^ 

The  mischief  sought  to  be  prevented  by  the 
enactment  of  the  English  statute  which  is  the  pro- 
totype of  the  respective  statutes  of  the  several 
states,  was,  as  it  recites,  "the  prevention  of  many 
fraudulent  practices  which  are  commonly  endeav- 
ored to  be  upheld  by  perjury  and  subornation  of 
perjury." 

404,  affirmed  78  N.  J.  Eq.  305,  81  Atl.  1135;  Eoss  v.  Parks,  93  Ala. 
153,  8  So.  368,  30  A.  S.  E.  47,  11  L.  E.  A.  148;  Perry  v.  Paschal, 
103  Ga.  134,  29  S.  E.  703,  705;  Peevey  v.  Haughton,  72  Miss.  918, 
17  So.  378,  18  So.  357,  48  A.  S.  E.  592;  Moses  v.  McClain,  82  Ala. 
370,  2  So.  741 ;  Foster  v.  New  York  &  T.  Land  Co.,  2  Tex.  Civ.  App. 
505,  22  S.  W.  260. 

1  Montgomery  v.  Waldeck,  2  Alaska  581,  holding  that  the  optionor  conld 
not  maintain  a  suit  to  recover  the  price  of  the  optioned  property 
where  the  optionee  had  not  subscribed  the  writing,  it  containing  a 
stipulation  binding  him  to  accept  the  option,  which  he  never  did. 
As  bearing  on  the  rule  laid  down  in  this  section,  see  Newberger  v. 
Adams,  92  Ky.  26,  17  S.  W.  162,  13  Ky.  L.  Eep.  339;  Lanz  v. 
McLaughlin,  14  Minn.  72;  Pettibone  v.  Moore,  27  N.  Y.  S.  455,  75 
Hun.  461 ;  Judge  v.  Cash,  5  Ky.  L.  Eep.  514. 

t  Beddow  v.  Plage,  22  N.  D.  53,  132  N.  W.  637,  is  based  upon  a  special 
statute. 


§  417  LAW  OF  OPTION  CONTRACTS  188 

It  needs  no  argument  to  show  that  the  statute 
was  intended  to  apply  to  the  party  desiring  to 
prove  the  contract  and  the  statute  has  quite  uni- 
formly been  so  construed,^  so  that  as  fitting  the 
facts  of  practically  all  the  cases  which  have  come 
to  our  attention,  it  may  be  said  that  the  party  to 
be  charged  is  the  defendant,  and  so  far  as  the  case 
under  consideration  is  concerned,  the  party  to  be 
charged  is  the  optionee. 

The  optionee  has  not  subscribed  any  writing. 
Keeping  in  mind  that  the  bilateral  contract  we  are 
considering  comes  into  existence  by  virtue  of  an 
oral  election  and  that,  therefore,  proof  of  the  con- 
tract depends  upon  proof  of  an  oral  election,  the 
conclusion  is  irresistible  that  to  allow  such  proof 

8  That  party  to  be  charged  is  the  defendant,  see  Montgomery  v.  Waldeck, 
supra;  Breen  v.  Mayne,  141  Iowa  399,  118  N.  W.  441;  George  etc. 
Co.  V.  Maxwell,  78  Ohio  St.  54,  84  N.  E.  595 ;  Peerey  v.  Haughton, 
72  Miss.  918,  17  So.  378,  18  So.  357,  48  A.  S.  R.  592. 

Monongah  C.  &  C.  Co.  v.  Fleming,  42  W.  Va.  538,  26  S.  E.  201;  Newby 
V.  Rigers,  40  Ind.  9;  Maine  v.  Howell,  7  Ga.  App.  311,  66  S.  E.  804; 
Alabama  K.  L.  Ins.  Co.  v.  Oliver,  82  Ala.  417,  2  So.  445;  Cavanaugh 
V.  Casselman,  88  Cal.  543,  26  P.  515;  Vance  t.  Newman,  72  Ark.  359, 
80  S.  W.  574,  105  A.  S.  R.  42. 

However,  in  Tennessee  it  is  held  that  the  ' '  party  to  be  charged ' '  is  the 
owner  of  the  property,  Lusky  v.  Keiser,  128  Tenn.  705,  164  S.  W.  777. 

Of  course,  if  the  vendee  or  optionee  has  subscribed  the  writing,  the 
vendor  may  maintain  a  suit  on  it,  Miller  v.  Cameron,  45  N.  J.  Eq. 
95,  15  Atl.  842,  1  L.  R.  A.  554;  Mason  v.  Decker,  72  N.  Y.  595, 
28  Am.  Rep.  190 ;  Levin  v.  Dietz,  194  N.  Y.  376,  87  N.  E.  454,  20 
L.  R.  A.  (N.  S.)  251.  So,  also,  where  the  election  is  in  writing  and 
subscribed,  Boston  &  W.  St.  Ry.  Co.  v.  Rose,  194  Mass.  142,  80 
N.  E.  498. 

In  Brewer  v.  Sowers,  118  Md.  681,  86  Atl.  228,  231,  it  is  said  that  upon 
election  an  obligation  arises  on  the  part  of  the  optionee  to  pay  the 
price;  but  this  was  said  in  a  suit  where  the  optionee  was  seeking 
specific  performance  and  with  reference  to  the  point  that  the  optionee 
was  obliged  to  pay,  notwithstanding  there  was  no  express  provision 
for  him  to  do  so. 


189  STATXJTB  OF  FRAUDS — ORAL  ELECTION  §  417 

is  to  throw  open  the  very  door  which  the  statute 
intended  to  close.  We  can  reach  no  other  con- 
clusion than  that,  under  the  statute  and  on  the 
facts  stated,  evidence  to  prove  an  oral  election  by 
an  optionee  is  not  admissible  in  any  suit  or  pro- 
ceeding either  at  law  or  in  equity  in  which  the 
optionor  is  seeking  the  enforcement  of  rights  grow- 
ing out  of  such  transaction/ 

4  In  a  note  to  6  L.  R.  A.  (N.  S.)  397,  it  is  said  by  the  annotator  that 
the  optionor  has  an  action  at  law  if  the  optionee  orally  accepts. 
This  statement  is  evidently  based  on  the  assumption  that  the 
equitable  rule  of  mutuality  is  controlling.  Clearly,  this  is  a  wrong 
assumption.  Mutuality  is  peculiar  to  equitable  proceedings.  It  has 
nothing  to  do  with  proof  of  a  contract  required  to  be  in  writing. 
The  Statute  of  Frauds  demands  written  evidence  of  a  contract  fall- 
ing within  its  provisions  and  there  is  not  one  rule  for  equity  and 
another  for  law.  Mutuality  is  an  accident  and  is  not  the  reason. 
As  said  in  Heflin  v.  Milton,  69  Ala.  354,  "The  difficulty  is  not  that 
the  contract  or  agreement  is  not  mutual,  but  that  each  party  has  not 
corresponding  evidence  of  it."  See,  also,  Alabama  etc.  Ins.  Co.  v. 
Oliver,  82  Ala.  417,  2  So.  445. 

The  conclusion  reached  in  the  text  is  not  at  variance  with  the  rule 
obtaining  with  reference  to  deeds  of  conveyance,  leases,  and  other  like 
instruments  in  writing,  containing  covenants  on  the  part  of  the 
lessee  or  the  grantee  who  has  not  subscribed  or  signed  the  writing. 
Indentures,  as  is  well  known,  are  signed  and  executed  by  both 
parties  and  therefore  are  not  in  point.  A  deed  poll  is  executed  by 
the  grantor  alone  and  the  rule  is  that  the  acceptance  of  such  a 
deed  by  the  grantee  binds  him  to  the  performance  of  the  covenants 
therein  on  his  part,  see  Gale  v.  Nixon,  6  Cow.  (N.  Y.)  445;  Kirk  v. 
Williams,  24  Fed.  437,  price.  And  the  same  is  true  of  a  lease  signed 
only  by  the  lessor.  However,  the  rule  is  sometimes  qualified  by 
adding  that  the  grantee  must  have  acted  under  the  instrument  and 
the  contract  must  have  been  fully  performed.  See  Merchants  Coal 
Co.  V.  Billnieyer,  54  W.  Va.  1,  46  S.  E.  120,  lease;  West  V.  C.  & 
P.  R.  Co.  V.  Mclntire,  44  W.  Va.  210,  28  S.  E.  696,  lease;  Noland  v. 
Cincinnati  C.  Co.,  26  Ky.  L.  Rep.  837,  82  S.  W.  627,  deed. 

Somewhat  similar  to  the  above  is  the  case  of  a  lease  containing  an 
option  giving  the  lessee  the  right  to  continue  the  term  of  the  lease 
by  serving  a  written  notice  on  the  lessor  to  that  effect  a  speciiied 
time  before  the  expiration  of  the  leasehold  term.  A  holding  over  by 
the  tenant  would  in  itself,  in  some  cases,  have  the  effect  of  con- 
tinuing the  original  lease  and,  consequently,  an  oral  notice  to  extend 


§  418  LAW  OF  OPTION  CONTRACTS  190 

Sec.  418.  PART  AND  FULL  PERFORM- 
ANCE.— At  law,  part  performance  of  an  oral  con- 
tract required  by  the  Statute  of  Frauds  to  be  in 
writing,  does  not  take  it  out  of  the  statute  unless 
the  statute  so  provides.^  In  equity,  however,  the 
rule  is  otherwise.  In  England  and  in  nearly  all  of 
the  American  States  the  established  rule  is  that 
part  performance,  by  one  of  the  parties,  of  an 

would  not  fall  within  the  provisions  of  the  Statute  of  Frauds.  If  the 
stipulation  is  one  to  renew,  a  different  rule  would  apply  in  some 
jurisdictions,  see  Sheppard  v.  Eosenkrans,  109  Wis.  58,  85  N.  W.  199, 
83  A.  S.  R.  886 ;  see,  also,  Byrne  Mill  Co.  v.  Robertson,  149  Ala.  273, 
42  So.  1008;  Dockery  v.  Thorne,  (Tex.  Civ.  App.),  135  S.  W.  593; 
Sees.  831-834. 
4  The  rule  stated  in  the  text  is  on  the  assumption  that  the  election  or 
acceptance  consists  only  of  the  oral  notification.  But  the  conclusion 
reached  would  not  be  different  if  the  oral  election  was  in  a  case 
where  there  had  been  part  performance  of  the  contract  by  the 
optionee.  The  doctrine  of  part  performance  is  based  on  estoppel 
and  not  on  contract,  except,  of  course,  that  as  a  matter  of  judicial 
form  the  part  performance  must  arise  out  of  possession  taken, 
improvements  made,  or  money  paid,  under  the  oral  contract.  The 
rule  being  based  on  estoppel  in  favor  of  the  optionee  as  against 
the  optionor  and  there  being  an  equity  furnished  to  the  optionee, 
it  is  not  available  to  the  optionor  as  a  means  of  taking  the  oral 
election  out  of  the  statute.  In  other  words,  part  performance  does 
not  make  a  contract,  nor  strictly  speaking,  does  it  make  an  election ; 
it  estops  the  optionor  from  taking  advantage  of  a  set  of  circum- 
stances which  would  work  a  fraud  on  the  optionee.  An  oral  election 
and  part  performance  do  not,  therefore,  place  the  optionor  in  a 
position  to  enforce  the  option  against  the  optionee  where  the  Statute 
of  Frauds  is  set  up  as  a  defense. 

1  Kling  V.  Bordner,  65  Ohio  St.  86,  61  N.  E.  148 ;  Sigmund  v.  Newspaper 
Co.,  82  111.  App.  178;  Chenoweth  v.  Pacific  Exp.  Co.,  93  Mo.  App. 
185;  Kimmins  v.  Oldham,  27  W,  Va.  258;  McElroy  v.  Ludlum,  32 
N.  J.  Eq.  828 ;  Hamilton  v.  Thirston,  93  Md.  213,  48  Atl.  709. 

In  some  of  the  states  the  statute  expressly  provides  what  performance 
will  take  the  contract  out  of  the  statute.  Hurst  v.  Jenkins,  161  Iowa 
414,  143  N.  W.  401;  Sivell  v.  Hogan,  119  Ga.  167,  46  S.  E.  67. 

At  law,  full  and  complete  performance  by  one  party  will  take  the 
oral  agreement  out  of  the  statute,  Eaton  v.  Whitaker,  18  Conn.  222, 
44  Am.  Dec.  586. 


191        STATUTE  OF  FRAUDS — PART  PERFORMANCE      §  418 

oral  executory  contract  for  an  interest  or  estate 
in  lands  will  be  specifically  enforced^  at  the  suit  of 
such  party.^  The  act  relied  upon  as  part  perform- 
ance must  be  clearly  referable  to  the  option  agree- 
ment, such  for  instance,  as  where  the  purchaser  has 
taken  possession  under  the  option  contract  and 
paid  the  purchase  money,  or  other  consideration, 
or  made  valuable  improvements.  The  grounds  on 
which  such  relief  is  granted  are  not  because  of  any 
binding  effect  of  the  oral  contract,  but  because  the 
enforcement  of  the  contract  is  necessary  in  order 
to  prevent  fraud/  But  to  invoke  the  rule  with  ref- 
erence to  option  contracts,  it  is  necessary  that  the 

2  See  See.  1207. 

This  rule  of  part  performance  does  not  obtain  in  Kentucky,  but  the 
party  receiving  the  consideration  will  not  be  allowed  to  rely  on  the 
statute  to  keep  it,  Waters  v.  Kline,  121  Ky.  611,  85  S.  W.  209,  123 
A.  S.  R.  215,  27  Ky.  L.  Rep.  479. 

Option  on  personal  property,  Walker  v.  Bamberger,  17  Utah  239,  5^ 

P.  108. 
It  would  seem  that  as  to  the  sale  of  personal  property,  the  only  part 

performance  which  will  take  the  contract  out  of  the  statute  is  that 

specified  in  the  statute,  such  as  part  payment,  etc.,  see  Bruen  v. 

Astor,  Anth.  N.  P.  (N.  Y.)  133. 
Full  performance  by  a  broker  under  an  oral  contract  to  sell  land  does 

not  take  the  contract  out  of  the  statute,  Taylor  v.  Peterson,   (Ore.) 

147  P.  520. 

8  Glass  V.  Hulbert,  102  Mass.  24,  3  Am.  Rep.  418,  but  not  of  course,  at 
the  suit  of  the  other  party,  see  Sec.  417,  note;  Lane  v.  Shackford., 
5  N.  H.  130;  Burnet  v.  Blackmar,  43  Ga.  569;  Rathbun  v.  Rathbun, 
(N.  Y.)  6  Barb.  98. 

4  Calanchini  v.  Branstetter,  84  Cal.  249,  24  P.  149,  division  line,  option 
to  purchase  on  either  side  as  established. 

Wall  V.  Minneapolis  etc.  Ry.  Co.,  86  Wis.  48,  56  N.  W.  367,  part  per- 
formance and  change  of  situation  of  parties  distinguished. 

Abbott  V.  76  Land  Co.,  101  Cal.  567,  36  P.  1,  possession  referred  to 
lease  and  not  to  oral  option. 

Popp  V.  Swanke,  68  Wis.  364,  31  N.  W.  916. 


§  419  LAW  OF  OPTION  CONTRACTS  192 

optionee  has  timely  and  properly  elected.^  There 
is  another  rule  to  the  effect  that  full  and  complete 
performance  by  one  of  the  parties  takes  the  con- 
tract out  of  the  statute,  and  it  would  seem  that  this 
is  true  both  at  law  and  in  equity.^  Thus,  a  contract 
to  repurchase  shares  of  stock  in  a  corporation  on 
the  happening  of  a  certain  event,  when  fully  per- 
formed by  one  of  the  parties,  is  not  within  the 
statute/  The  subject  of  this  section  is  further  pre- 
sented in  the  chapter  on  specific  performance.* 

Sec.  419.  PLEADING.— The  rules  with  refer- 
ence to  pleading  contracts  falling  within  the  Stat- 
ute of  Frauds,  may  be  generalized  by  saying  that 
as  against  a  demurrer  it  is  not  necessary  to  allege 
the  contract  is  in  writing,  except  in  those  juris- 
dictions where  by  force  of  statute,  or  otherwise,  a 
different  rule  obtains.^    The  same  rule  applies  to 

5  Sivell  V.  Hogan,  119  Ga.  167,  46  S.  E.  67. 

6  Eaton  V.  Whitaker,  18  Conn. .  222,  44  Am.  Dec.  586,  but  the  right  of 

recovery  at  law  is  upon  a  promise  implied  by  law  to  pay  the  value 
of  the  property  received  or  the  value  of  the  services  rendered. 

7  Fremont  C.  Mfg.  Co.  v.  Thomsen,  65  Neb.  370,  91  N.  W.  376;  Fay  v. 

Wheeler,  44  Vt.  292  repurchase. 

8  See  Sec.  1207. 

1  It  is  not  necessary  to  allege  the  contract  is  in  writing;  to  meet  the 
requirements  of  the  Statute  of  Frauds  the  Court  will  so  assume, 
if  it  does  not  appear  from  the  complaint  the  contract  is  oral,  Tram- 
mell  V.  Craddock,  93  Ala.  450,  9  So.  587;  Gale  v.  Harp,  64  Ark. 
462,  43  S.  W.  144;  Vassault  v.  Edwards,  43  Cal.  458;  Smith  v. 
Taylor,  82  Cal.  533,  123  P.  217;  Nunez  v.  Morgan,  77  Cal.  427,  19 
P.  753,  findings;  Berry  v.  French,  24  Colo.  App.  519,  135  P.  985; 
Dennison  v.  Barney,  40  Colo.  442,  113  P.  519;  Walker  v.  Edmund- 
Bon,  111  Ga.  454,  36  S.  E.  800,  option;  Mobley  v.  Lott,  127  Ga.  572, 
56  S.  E.  637 ;  Speyer  v.  Desjardins,  144  HI.  641,  32  N.  E.  283 ;  Kroll 
V.  Diamond  Match  Co.,  106  Mich.  127,  63  N.  W.  983,  oral  election; 


193  STATUTE  OF  FRAUDS — PLEADING  §  419 

pleading  the  authority  of  an  agent.-  It  would  seem, 
however,  that  where  plaintiff  relies  on  an  oral  con- 
tract and  part  performance  to  avoid  the  statute, 
the  facts  relied  on  as  part  performance  must  be 
alleged.^ 

The  same  rules  apply  to  answers  setting  up  such 
a  contract.^  Of  course,  if  it  appears  from  the  face 
of  the  pleading  that  the  contract  is  oral,  and  no 

Benton  v.  Schulte,  31  Minn.  312,  17  N.  W.  621;  Dudley  v.  Bachelder, 
53  Me.  403;  Mullaly  v.  Holden,  123  Mass.  583;  Campbell  v.  Bur- 
nett, 120  Md.  214,  87  Atl.  894;  Young  Men's  Christian  Ass'n  v. 
Dubaeh,  82  Mo.  475;  Reed  v.  Crane,  89  Mo.  App.  670,  option; 
Sharkey  v.  McDermott,  91  Mo.  647,  4  S.  W.  107,  60  A.  S.  R.  270; 
Mayger  v.  Cruse,  5  Mont.  485,  6  P.  333. 

1  Walker  v.  Richards,  39  N.  H.  259 ;   Shields  v.  Titus,  46  Ohio  St.  528, 

22  N.  E.  717 ;  Russell  v.  Swift,  5  Ore.  233 ;  Cranston  v.  Smith,  6  R.  I. 

231;  Robbins  v.  Deverill,  20  Wis.  142;  Pettit  v.  Hamlyn,  43  Wis.  314; 

Dennison  v.  Barney,  40  Colo.  442,  113  P.  519. 
The  reason  of  the  rule  is  that  the  statute  of  frauds  merely  introduces 

a  new   rule   of  evidence,  but   does   not  alter   or  affect   the   rule   of 

pleading,  Whitehead  v.  Burgess,  61  N.  J.  L.  75,  38  Atl.  802. 
Where  an  issue  is  made  plaintiff  must  prove  the  contract  is  in  writing, 

Vassault  v.  Edwards,  43  Cal.  458. 
In  some  jurisdictions  it  is  held  it  will  be  presumed  the  contract  is  oral 

if  there  is  no  averment  it  is  in  writing,  Percifield  v.  Black,  132  Ind. 

384,  31  N.  E.  955;   Horner  v.  McConnell,  158  Ind.  280,  63  N.  E. 

472 ;  also  Morgan  v.  Wickliffe,  110  Ky.  215,  61  S.  W.  13,  22  Ky.  L. 

Rep.  1648;  Boone  v.  Coe,  153  Ky.  233,  154  S.  W.  900;  Babcock  v. 

Meek,  45  Iowa   137. 
Pleading  oral  option  as  a  circumstance  to  show  fraud  is  permissible, 

McNaughton  v.  Smith,  136  Mich.  368,  99  N.  W,  382. 

2  Fowler  v.  Fowler,  204  111.  82,  68  N.  E.  414. 

3  See  note  5,  infra;  Powder  River  etc.  Co.  v.  Lamb,   38   Neb.  339,  56 

N.  W.  1019. 

4  Bradford  Inv.  Co.  v.  Joost,  117  Cal.  204,  48  P.  1083;  Walker  v.  Ed- 

mundson,  111  Ga.  454,  36  S.  E.  800. 

13 — Option  Contracts. 


§  419  LAW  OF  OPTION  CONTRACTS  194 

facts  are  alleged  to  take  the  case  out  of  the  statute, 
it  is  demurrable.^ 

Whether  or  not  it  is  necessary  expressly  to  plead 
the  statute  as  a  defense  in  an  answer  is  involved  in 
some  conflict  of  judicial  decision.  The  general  rule 
is  the  defense  is  waived  if  the  statute  is  not 
pleaded.*^  This  is  undoubtedly  true  in  all  cases 
where  the  complaint  expressly  sets  up  an  oral  con- 
tract/ or  declares  on  the  contract  in  general  terms, 
the  execution  of  which  is  not  denied.^  If,  however, 
the  defendant  denies  the  execution,  and  thus  puts 

B  Alexander  v.  Cleland,  13  N.  Mex.  524,  86  P.  425 ;  see  Thompson  v.  New 
So.  Coal  Co.,  135  Ala.  630,  34  So.  31,  62  L.  R.  A.  551,  93  A.  S.  R.  49; 
Arguello  v.  Edinger,  10  Cal.  150;  Dicken  v.  McKinlay,  163  111.  318, 
45  N.  E.  134,  54  A.  S.  R.  471;  Horner  v.  McConnell,  158  Ind.  280, 
63  N.  E.  472;  Linn  etc.  Co.  v.  Terrill,  76  Ky.  (13  Bush.)  463; 
Ahrend  v.  Odiorne,  118  Mass.  261,  19  Am.  Rep.  449;  Peckham  v. 
Balch,  49  Mich.  179,  13  K  W.  506,  part  performance ;  Wentworth  v. 
Wentworth,  2  Minn.  277,  72  Am.  Dec.  97 ;  Hurt  v.  Ford,  142  Mo.  283, 
44  S.  W.  228,  41  L.  R.  A.  823,  under  general  denial;  Wirtz  v.  Guthrie, 
81  N.  J.  Eq.  271,  87  Atl.  134;  Stovall  v.  Gardner,  100  Tex.  25,  94 
S.  W.  218;  Goodrich  v.  Rogers,  75  Wash.  212,  134  P.  947. 

6  See  Hemmings  v.  Doss,  125  N.  C.  400,  34  S.  E.  511,  a  parol  agreement 

within  the  statute  is  neither  illegal  nor  void,  hence  the  theory  of 
waiver  if  not  pleaded. 
Alaska  S.  Co.  v.  Standard  Box  Co.,  158  Cal.  567,  112  P.  454;  Dennison 
V.  Barney,  40  Colo.  442,  113  P.  519;  Bailey  v.  Henry,  125  Tenn.  390, 
143  S.  W.  1124;  Cunningham  v.  Blanchard,  85  Vt.  494,  83  Atl.  469; 
Mitchell  V.  Henderson,  37  Mont.  515,  97  P.  942;  Crane  v.  Powell,  139 
N.  Y.  379,  34  N.  E.  911. 

7  Goodrich  v.  Rogers,  75  Wash.  212,  134  P.  947;  Barrett  v.  McAllister, 

33  W.  Va.  738,  11  S.  E.  220,  option;  Eaves  v.  Vial,  98  Va.  134,  34 
S.  E.  978;  Crane  v.  Powell,  139  N.  Y.  379,  34  N.  E.  911,  912;  Gaehet 
V.  Morton,  181  Ala.  179,  61  So.  817;  see  Taylor  v.  Merrill,  55  HI.  52; 
Krah  v.  Wassmer,  75  N.  J.  Eq.  109,  71  Atl.  404. 

8  Hewitt  V.  Lehigh  &  H.  Ry.  Co.,  57  N.  J.  Eq.  511,  42  Atl.  325 ;  Matthes 

V.  Wier,  (Del.  Ch.)  84  Atl.  878;  Christiansen  v.  Aldrich,  30  Mont. 
446,  76  P.  1007;  Abba  v.  Smyth,  21  Utah  109,  59  P.  756;  Atkinson 
v.  Washington  &  Jefferson  College,  54  W.  Va.  32,  46  S.  E.  253; 
Goodrich  v.  Rogers,  75  Wash.  2] 2,  134  P.  947;  Barrett  v.  McAllister, 
supra;  Keller  v.  Fitzgerrell,  249  111.  451,  94  N.  E.  926,  affirming 
158  111.  App.  534. 


195  STATUTE  OF  FRAUDS — PLEADING  §  419 

plaintiff  upon  Ms  proof,  the  weight  of  authority  is 
that  the  issue  is  raised  and  that  the  defendant 
is  placed  in  a  position  to  interpose  objection  in 
accordance  with  the  practice  of  the  particular 
jurisdiction.® 

»  The  decisions  of  the  particular  jurisdiction  must  be  consulted  to  ascer- 
tain the  qualification  of  the  general  rule  that  the  defendant  may 
rely  on  the  general  issue,  or  a  general  denial. 

See  the  leading  case  of  Feeney  v.  Howard,  79  Cal.  525,  21  P.  984, 
4  L.  E.  A,  826,  12  A.  S.  R.  162,  and  Goodrich  v.  Rogers,  75  Wash. 
212,  134  P.  947;  Hamilton  v.  Thirston,  93  Md.  213,  48  Atl.  709; 
Mitchell  V.  Henderson,  37  Mont.  515,  97  P.  942 ;  Vassault  v.  Edwards, 
43  Cal.  458 ;  Powder  River  etc.  Co.  v.  Lamb,  38  Neb.  339,  56  N.  W. 
1019. 

See,  however.  Crane  v.  Powell,  139  N.  Y.  379,  34  N.  E.  911;  Matthews 
V.  Matthews,  154  N.  Y.  288,  48  N.  E.  531.  These  decisions  hold  that 
when  the  complaint  does  not  disclose  whether  the  contract  is  oral  or 
written,  it  is  necessary  for  the  defendant  to  plead  the  statute  in 
order  to  avail  himself  of  the  defense,  following  the  rule  of  the 
English  Judicature  Act  providing  that  "when  a  contract  is  alleged 
in  any  pleading,  a  bare  denial  of  the  contract  by  the  opposite 
party  shall  be  construed  only  as  a  denial  of  the  making  of  the 
contract  and  not  of  its  legality  or  its  sufficiency  in  law,  whether 
with  reference  to  the  Statute  of  Frauds  or  otherwise." 

Denial  of  the  promise  is  sufficient  without  alleging  the  statute.  Bean 
V.  Lamprey,  82  Minn.  320,  84  N.  W.  1016;  Dennison  v.  Barney,  40 
Colo.  442,  113  P.  519. 

When  common  counts  are  used  in  the  complaint  it  is  not  necessary 
specifically  to  plead  the  statute  as  a  defense,  Schotte  v.  Puscheck, 
79  m.  App.  31;  Harris  v.  Frank,  81  Cal.  280,  22  P.  856;  Anderson 
V.  Dailey,  25  Colo.  App.  175,  136  P.  461. 

Of  course,  if  the  statute  declares  the  oral  contract  void  and  not  merely 
invalid,  it  would  seem  no  allegation  on  the  part  of  the  defendant 
would  be  necessary,  Popp  v.  Swank,  68  Wis.  364,  31  N.  W.  916. 

Benefit  of  statute  is  waived  by  failure  to  object  to  the  admission  of 
parol  evidence  to  prove  the  parol  contract,  Nunez  v.  Morgan,  77  Cal. 
427,  19  P.  753. 


CHAPTER  V. 

NATURE  OF  RIGHT  OR  ESTATE  IN  PROPERTY  UNDER  OPTION. 

See.  501.     Generally. 

Sec.  502.     Decisions  holding  optionee  has  no  interest  or  estate  in  the 
property,  prior  to  election. 

Sec.  503.     Decisions  holding  optionee  has  equitable  estate  prior  to  elec- 
tion, Kerr  v.  Day. 

Sec.  504.  Kerr  v.  Day,  continued. 

Sec.  505.  Same.     Telford  v.  Frost. 

Sec.  506.  Same.     Other  miscellaneous  cases. 

Sec.  507.  Sale    and    return.      Sale    on    trial    or    approval.      Bailment. 

Generally. 

Sec.  508.  Same.     Miscellaneous  cases. 

Sec.  509.  Judgments.     Executions.     Liens.     Etc. 

Sec.  510.  Mortgages. 

Sec.  511.  Insurable  interest  in  optioned  property. 

Sec.  512.  Eight  to  insurance  moneys. 

Sec.  513.  Possession. 

Sec.  514.     Upon  exercise  of  option  to  purchase  equitable  title  vests  in 

optionee. 
Sec.  515.     Bona  fide  purchasers  of  option  property.    Notice 
Sec.  516.     Rights  under  junior  and  senior  options. 
Sec.  517.     Equitable  conversion. 
Sec.  518.     Dividends  on  corporate  stock. 
Sec.  519.     Rents. 

Sec.  520.     Right  to  coal  mined.    Profits  made,  etc 

(197) 


§  501  LAW  OF  OPTION  CONTRACTS  198 

Section  501.  GENERALLY.— On  this  subject 
one  line  of  decisions  (the  weight  of  authority) 
holds  that  an  option  contract  to  purchase  does  not 
vest  any  estate,  legal  or  equitable,  in  the  optionee 
prior  to  his  election  to  purchase.  This,  it  is  said, 
results  from  the  nature  of  the  option  contract  in 
that  thereby  the  optionor  does  not  sell  the  prop- 
erty, nor  does  he  thereby  agree  to  do  so,  but  sells 
to  the  other  party  the  right  merely  of  an  election 
to  buy,^  and,  therefore,  the  rule  that  a  vendor, 
under  an  agreement  of  sale,  holds  the  title  in  trust 
for  the  vendee,  and  that  the  vendee  holds  the  pur- 
chase money  in  trust  for  vendor,  does  not  apply  to 
option  contracts.^ 

There  is  another  line  of  decisions  which  seems 
to  hold  to  the  contrary,  but  it  occurs  to  us  the  well 
considered  of  these   decisions  hold  merely  that 

1  Benedict  v.  Pincus,  191  N.  Y.  377,  84  N.  E.  284;  Cameron  v.  Shumway, 

149  Mich.  634,  113  N.  W.  287;   Hamburger  v.  Thomas,   (Tex.  Civ. 

App.)   118  S.  W.  770. 
See  decisions  cited  under  Sec.  502,  infra. 
While  the  option,  prior  to  election,  does  not  vest  any  property  rights 

in  the  optionee,  still  the  option  contract  itself  is  property  within 

the  purview  of  the  law,  Haskins  v.  Eyan,  75  N.  J.  Eq.  330,  78  Atl. 

566. 
Prior  to  election,  the  relation  of  debtor  and   creditor  does  not  exist 

as  between  the  optionor  and  the  optionee;   therefore,  the  rule  as  to 

application   of   payments   does   not   apply,    Harrison   v.    Woodward, 

11  Cal.  App.  15,  103  P.  933. 
Nor  is  the  option  a  ' '  debt ' '  within  constitutional  inhibition  against 

incurring  debts,   Overall  v.   Madisonville,   125  Ky.   684,   102   S.   W. 

278,  31  Ky.  L.  Rep.  278,  12  L.  R.  A.   (N.  S.)   433;  Perrigo  v.  City 

of  Milwaukee,  92  Wis.  236,  65  N.  W.  1025. 

2  Patterson  v.  Farmington  St.  Ry.  Co.,  76  Conn.  628,  57  Atl.  853,  shares 

of  stock,  holding  only  effect  of  option  on  absolute  ownership  of 
property  is  on  right  of  optionor  during  time  limit  to  sell  the  prop- 
erty; also  Thacher  v.  Weston,  197  Mass.  143,  83  N.  E.  360. 


199  PROPERTY — ESTATE  OF  OPTIONEE  §  502 

when  the  option  is  supported  by  a  consideration, 
the  optionee  acquires  a  right,  by  timely  election,  to 
enforce  a  conveyance  of  the  property  as  against  a 
purchaser  or  encumbrancer  with  notice.' 

However,  there  might  be  a  case  where  a  transac- 
tion taking  on  the  form  of  the  option,  is  such  as  to 
vest  in  the  optionee  an  equitable  right  or  estate  in 
the  property.* 

Sec.  502.  DECISIONS  HOLDING  OP- 
TIONEE HAS  NO  INTEREST  OR  ESTATE 
IN  THE  PROPERTY  PRIOR  TO  ELECTION. 
— An  option  was  given  to  purchase  an  undivided 
one-half  interest  in  certain  lands,  at  a  certain 
price,  and  within  a  certain  fixed  time.  No  payment 
of  the  price  for  the  land,  or  any  election,  was  made 
by  the  optionee.  The  court  said :  ' '  The  contract  of 
itself  did  not  vest  him  (optionee)  with  any  inter-, 
est  or  estate  in  the  land.  It  merely  pointed  out  the 
mode   by   which  he   might   acquire    an   interest, 

3  See  Crowley  v.  Byrne,  71  Wash.  444,  129  P.  113;  Copple  v.  Aigeltinger, 

167  Cal.  706,  140  P.  1073 ;  Smith  v.  Bangham,  156  Cal.  359,  104  P. 
689,  28  L.  E.  A.  (N.  S.)  522;  Horgan  v.  Eussell,  24  N.  D.  490,  140 
N.  W.  99,  43  L.  R.  A.  (N.  S.)   1150. 

4  Thus,  as  said  in  Clarno  v.  Grayson,  30  Ore.  Ill,  46  P.  426,  430,  there 

may  be  instances  in  which  the  consideration  to  support  the  option 
is  so  grossly  in  excess  of  its  value  that  a  court  would  construe  the 
contract  as  showing  an  intention  of  the  parties  to  accord  to  the 
purchaser  a  present  right  in  the  subject  matter.  This  was  said  in 
discussing  the  rule  of  forfeiture  of  payments  made.  See  Ely  v. 
Beaumont,  5  S.  &  R.  (Pa.)  124;  also  note  4,  Sec.  862;  McGregor  v. 
Ireland,  86  Kan.  426,  121  P.  358. 
See  assignments,  Sees.  602,  603;  equitable  conversion.  Sec.  517. 


§  502  LAW  OP  OPTION  CONTRACTS  200 

namely :  By  paying  a  certain  sum  of  money  within 
a  certain  time. '  '^ 

No  interest  in  the  land  is  acquired  until  the 
optionee  exercises  his  right  to  purchase,  and  a  pro- 
vision that  the  option  shall  be  a  covenant  running 
with  the  land  does  not  alter  the  rule.^ 

An  option  in  a  lease  does  not  vest  any  title,  or 
interest,  in  the  optionee  except  that  acquired  under 
the  lease  as  lessee  until  acceptance  and  tender.^ 

Other  decisions  holding  that  no  estate  or  interest 
in  the  land,  legal  or  equitable,  passes  to  the 
optionee  prior  to  his  election,  will  be  found  col- 
lected in  the  note.^  And  this  seems  to  be  the  rule 

1  Richardson  v.  Hardwick,  106  U.  S.  252,  27  L.  Ed.  145,  1  S.  Ct.  213; 

also  Stevens  v.  McChrystal,  150  Fed.  85,  mining  claim;  see  Benedict 
V.  Pincus,  191  N.  Y.  377,  84  N.  E.  284,  agreement  for  lease;  Clarno 
V.  Grayson,  30  Ore.  Ill,  46  P.  426,  430,  mine;  Woodall  v.  Bruen, 
(W.  Va.)  85  S.  E.  170. 

2  Kadish  v.  Lyon,  229  Bl.  35,  82  N.  E.  194. 

3  Bras  V.  Sheffield,  49  Kan.  702,  31  P.  306,  33  A.  S.  R.  386 ;  Powell  v. 

Eckler,  96  Mich.  538,  56  N.  W.  1,  lease  and  option  to  purchase 
piano;  Luigart  v.  Lexington  Turf  Club,  130  Ky.  473,  113  S.  W.  814, 
lease  and  option;  Chandler  &  Co.  v.  McDonald,  215  Mass.  365,  102 
N.  E.  319,  an  option  to  buy  if  optionor  decided  to  sell;  Young  v. 
Matthew  Turner  Co.,  168  Cal.  671,  143  P.  1029,  option  to  repurchase 
interest  in  vessel  does  not  give  optionee  right  to  maintain  replevin. 

4  Thacher  v.  Weston,  197  Mass.  143,  83  N.  E.  360 ;  Cameron  v.  Shumway, 

149  Mich.  634,  113  N.  W.  287,  not  even  a  chose  in  action;  Womack  v. 
Coleman,  92  Minn.  328,  100  N.  W.  9,  conveys  no  title  but  creates 
rights  ill  personam ;  Patterson  v.  Farnungton  St.  Ry.  Co.,  76  Conn. 
628,  57  Atl.  853,  shares  of  stock;  Dunnaway  v.  Day,  163  Mo.  415, 
63  S.  W.  731;  Verstine  v.  Yeaney,  210  Pa.  109,  59  Atl.  689;  National 
Oil  etc.  Co.  v.  Teel,  95  Tex.  586,  68  S.  W.  979,  affirming  67  S.  W. 
545;  Tibbs  v.  Zirkel,  55  W.  Va.  49,  46  S.  E.  701,  104  A.  S.  R.  977, 
2  Ann,  Cas.  421;   Rease  v.  Kittle,  56   W.  Va.   269,  49  S.   E.   150; 


201  PROPERTY — ESTATE  OF  OPTIONEE  §  502 

notwithstanding  the  optionee  is  given  possession 
and  makes  improvements,  but  fails  to  elect.'* 

And  is  also  the  rule  with  reference  to  alternative 
stipulations  in  contracts.  Thus,  where  the  lessor 
of  a  brick  yard  leased  the  same  reserving  as  rent  a 
certain  sum  on  every  1000  bricks  manufactured  by 
the  lessee,  and  the  lease  giving  him  the  option, 
from  time  to  time,  to  take,  at  the  kiln,  at  the  mar- 
ket price,  such  quantity  of  bricks  as  should  be 
equivalent  to  the  sum  named  as  rent,  the  lessor  had 
no  property  in  the  bricks  till  he  made  his  elec- 
tion.® 

Nelson  v.  Stephens,  107  Wis.  136,  82  N.  W.  163;  Gustin  v.  School 
Dist.,  94  Mich.  502,  54  N.  W.  156,  34  A.  S.  R.  361;  Newton  v. 
Newton,  11  R.  I.  390,  23  Am.  Rep.  476;  Olds  v.  Little  Horse  Creek 
Cattle  Co.,  22  Wyo.  336,  140  P.  1004;  Perrigo  v.  City  of  Milwaukee,  92 
Wis.  236,  65  N.  W.  1025;  Rampton  v.  Dobson,  156  Iowa  315,  136 
N.  W.  682;  Sheilds  Bros.,  In  re  134  Iowa  559,  111  N.  W.  963, 
10  L.  R.  A.  (N.  S.)  1061;  Sprague  v.  Schotte,  48  Ore.  609,  87  P. 
1046;  Stembridge  v.  Stembridge,  87  Ky.  91,  7  S.  W.  611,  9  Ky.  L. 
Rep.  948;  Little  v.  Cardwell,  (Ky.)   122  S.  W.  799. 

4  Attempt  to  get  option  is  not  an  "attempt  to  purchase"  within  con- 

demnation statute  of  Michigan,  Mich.  Cent.  R.  Co.  v.  Ferguson, 
162  Mich.  220,  127  N.  W.  320. 

Lien  to  optionor  on  oil  produced,  Willetts  v.  Reid,  5  N.  Y.  St.  175. 

Montgomery  v.  Hundley,  205  Mo.  138,  103  S.  W.  527,  option  on  stock; 
optionee  owner  within  rule  that  agent  can  not  buy  from  himself. 

Krhut  V.  Phares,  80  Kan.  515,  103  P.  117,  agent  can  not  refuse  to 
account  to  principal  for  profits  of  transaction  on  ground  that  prin- 
cipal has  no  estate  or  interest  in  land. 

Where  the  beneficiary  under  a  trust  deed  of  land  joined  in  the  con- 
tract authorizing  the  trustee  to  convey  and  after  conveyance  gave 
an  option  to  purchase  his  interest,  the  optionee  has  no  interest  in 
the  lands,  Jackson  v.  Jackson,  175  Fed.  710,  99  C.  C.  A.  286. 

5  Bostwick  V.  Hess,  80  111.  138,  possession  taken  and  improvements  made. 
C  Appeal  of  Wait,  24  Mass.  100,  19  Am.  Dec.  262. 


§  503  LAW  OF  OPTION  CONTRACTS  202 

Sec.  503.  DECISIONS  HOLDING  OP- 
TIONEE HAS  EQUITABLE  ESTATE  PRIOR 
TO  ELECTION.    KERR  v.  DAY.^— W  and  A 

gave  a  lease  of  a  lot  for  three  years  by  the  terms 
of  which  the  lessee  was  given  an  option  to  purchase 
at  any  time  during  the  term.  Subsequently,  W  con- 
veyed his  interest  in  the  lot  to  A.  The  lessee  then 
assigned  the  option  to  W.  A  then  conveyed  the 
lot  to  Day.  Subsequently,  but  after  the  expiration 
of  the  three  years  W  assigned  the  option  to  T.  Day 

1  Kerr  v.  Day,  14  Pa.  112,  53  Am.  Dec.  526. 

House  V.  Jackson,  24  Ore.  89,  32  P.  1027,  seems  to  hold  that  where 
there  is  a  consideration  for  the  option  an  equitable  estate  vests  in 
the  optionee  and  cites  the  Kerr  decision  as  authority.  The  court 
confused  the  right  of  the  optionee  to  assign  his  option  contract  with 
the  supposed  estate  of  the  optionee  in  the  optioned  land,  and 
seemed  to  think  that  to  enable  the  optionee  to  assign  it  was  neces- 
sary to  hold  that  the  equitable  estate  vested  in  the  optionee.  Tha 
court  reached  the  right  conclusion  on  the  facts  of  the  case,  but  the 
decision  should  have  been  put  on  the  ground  that  an  option  sup- 
ported by  a  consideration  vests  in  the  optionee  the  right  of  acquir 
ing  an  interest  in  the  land,  and,  therefore,  is  assignable  before 
election,  and  not  on  the  ground  that  an  option  is  assignable  because 
it  vests  an  equitable  estate  to  the  land  in  the  optionee.  See  Sec.  602 ; 
also  Crowley  v.  Byrne,  71  Wash.  444,  129  P.  113,  quoting  Smith  v. 
Bangham,  156  Cal.  359,  104  P.  689,  28  L.  R.  A.  (N.  S.)  522.  The 
decision  in  the  House  case  is  somewhat  influenced  by  the  fact  that  a 
very  large  sum  was  paid  for  the  option  privilege,  see  Sec.  501,  note  4; 
Sec.  862,  note  4. 
Kerr  v.  Day  was  followed  in  People's  St.  Ry.  Co.  v.  Spencer,  156  Pa. 
85,  27  Atl.  113,  36  A.  S.  R.  22.  The  latter  decision  cites  Frick'a 
Appeal,  101  Pa.  485,  (holding  that  where  the  land  was  sold  on  a 
prior  judgment  the  surplus  moneys  were  the  property  of  the 
optionee),  and  says  the  circumstances  that,  in  the  Frick  case,  the 
option  had  been  exercised  before  the  levy  and  sale  was  not  of  con- 
trolling weight,  as  the  decision  was  put  on  the  ground  that  "in 
equity  the  vendee  becomes  the  owner  subject  to  the  payment  of  the 
price.  His  right  of  property  therein  flows  from  the  contract  and 
exists  before  any  purchase  money  may  have  been  paid."  See 
See.  517. 


203  PROPERTY — ESTATE  OF  OPTIONEE  §  503 

brought  ejectment  against  Kerr,  a  tenant  in  pos- 
session under  Q  and  T,  the  assignee  of  the  option. 

At  the  trial  below  it  appeared  that  at  the  time 
of  the  conveyance  by  A  to  Day,  one  Carnahan 
was  in  possession  of  the  property  as  tenant  of 
Cuddy,  the  original  lessee,  and  that  after  the 
assignment  of  the  option  to  W,  Carnahan  paid  rent 
to  W.  Kerr  went  into  possession  when  Carna- 
han left. 

The  trial  court  instructed  the  jury  that  the  pos- 
session of  Carnahan  as  tenant  of  Cuddy  and  the 
payment  of  rent  to  W  did  not  amount  to  con- 
structive notice  of  the  title  claimed  under  the 
option ;  that  the  agreement  to  give  the  option  was 
a  mere  personal  covenant  and  did  not  vest  any 
interest,  legal  or  equitable,  in  the  optionee,  and 
that  the  defendant  T,  claiming  under  the  option 
alone,  without  any  act  of  election  previous  to  the 
sale  to  Day,  the  plaintiff  below  had  no  such  title 
to  tire  land  as  would  furnish  the  foundation  of  a 
defense  to  the  action  of  ejectment.  The  verdict  and 
judgment  went  for  plaintiff  Day.  This  judgment 
was  reversed  on  appeal,  the  Supreme  Court  hold- 
ing that  the  lessee  had  an  equitable  estate  in  the 
land  under  his  option  to  purchase,  which  passed 
by  assignment  to  the  defendant  T,  and  that  this 
right  could  be  enforced  against  Day,  the  purchaser 
of  the  lot,  who  upon  the  facts  was  charged  with 
notice  of  the  option,  since  the  possession  of  the  sub- 
tenant was  in  effect  the  same  as  the  possession  of 
the  lessee,  and  being  consistent  with  the  contract, 
was  sufficient  to  give  notice  thereof  to  Day,  the 
purchaser. 


§  504  LAW  OF  OPTION  CONTRACTS  204 

Sec.  504.   KERR  v.  DAY,  CONTINUED.— It 

should  be  observed  in  this  case  that  notwithstand- 
ing the  head  note  and  the  language  of  the  opinion, 
it  lays  down  the  rule  merely  that  a  purchaser  of 
land  with  notice  of  an  option  thereon  takes  the 
land  subject  to  the  right  of  the  optionee  to  have 
specific  performance.  It  should  be  further 
observed  that  this  right  arises,  not  from  the  fact 
that  the  optionee  has  any  estate  in  the  land,  but 
from  the  fact  that,  by  relation,  his  election  to 
purchase  dates  back  to  the  execution  of  the  option 
contract  and  thus  cuts  out  the  rights  of  an  inter- 
vening purchaser  with  notice.  This  is  made  clear 
by  reference  to  the  reasoning  of  the  court  which 
proceeds  in  analogy  to  the  rule  with  reference  to 
equitable  conversion. 

Another  fact  should  be  noted.  The  lease  was  exe- 
cuted April  1,  1845,  and  ran  for  a  term  of  three 
years.  The  option  ran  for  the  same  term.  The  lot 
was  conveyed  to  plaintiff  below  (Day)  August  9, 
1847.  Warden,  who  thereafter  acquired  the  option 
by  assignment  from  Cuddy,  the  original  lessee, 
assigned  the  option  to  defendant  T  August  22, 
1849,  more  than  a  year  after  the  expiration  of 
the  leasehold  term,  and  it  does  not  appear  from 
the  reported  case  that  the  holder  of  the  option,  at 
any  time  during  the  leasehold  term,  exercised  his 
right  of  election  to  purchase.  Clearly,  if  there  was 
no  timely  election  the  option  expired  by  limitation 
April  1,  1848,  and  it  would  therefore  follow  that 
plaintiff  below  was  entitled  to  judgment  upon  that 
ground. 


205  PROPERTY — ^ESTATE  OF  OPTIONEE  §  505 

Sec.  505.  SAME.  TELFORD  v.  FROST.^— 
Plaintiff  and  one  S  obtained  a  written  option 
from  C,  on  certain  described  land,  for  a  certain 
price  and  for  a  certain  time.  S  then  in  writing 
assigned  his  interest  in  the  option  to  plaintiff. 
Plaintiff  and  the  defendant  then  entered  into  a 
parol  agreement  with  S  to  bring  C  to  defendant 
and  that  defendant  would  enter  into  an  agreement 
with  C  to  purchase  the  property  from  C,  for  $3,000 
(the  option  price),  and  that  in  consideration  of 
plaintiff's  said  services  and  in  permitting  the 
defendant  to  take  the  place  of  plaintiff  in  pur- 
chasing the  property  from  C,  defendant  would  pay 
plaintiff  the  sum  «f  $1,000.  Suit  was  brought  to 
recover  the  $1,000  alleging  the  above  facts  and  the 
carrying  out  and  performance  of  the  agreement. 
Judgment  went  for  plaintiff  for  $1,000.  Defendant 
appealed  and  on  appeal  it  was  urged  that  the 
option  gave  plaintiff  an  interest  in  the  land  within 
the  meaning  of  the  Wisconsin  statute  providing 
that  no  estate  or  interest  in  lands  shall  be  surren- 
dered unless  by  act  or  operation  of  law  or  by  deed 
of  conveyance  in  writing  subscribed  by  the  party 
surrendering  the  same.  The  court  held  the  acts  of 
the  parties  amounted  to  a  surrender  of  the  option 
within  the  meaning  of  the  statute. 

In  the  opinion  it  is  said  the  option  gave  plaintiff 
an  interest  in  the  land  within  the  meaning  of  the 
statute.  The  statement,  however,  is  a  mere  passing 
remark.  However,  in  the  later  case  of  Wall  v.  Rail- 
way Company^  the  same  court,  referring  to  the 
Telford  decision,  says  that  one  having  an  option 

1  Telford  v.  Frost,  76  Wis.  172,  44  N.  W.  835. 

2  Wall  V.  Minn.  St.  P.  &  S.  S.  By.  Co.,  86  Wis.  48,  56  K  W.  367. 


§  506  LAW  OF  OPTION  CONTRACTS  206 

in  writing  for  the  purchase  of  land  has  an  interest 
therein  within  the  meaning  of  the  statute  there 
referred  to^  as  well  as  within  the  statute  of  frauds. 
In  the  Wall  case  there  was  an  election  by  the 
optionee  within  the  option  time,  and  in  such  case 
the  authorities  all  agree  that  thereby  the  optionee 
becomes  vested  with  an  equitable  estate  on  the 
principle  governing  agreements  of  sale/ 

Sec.  506.  SAME.  OTHER  MISCELLANE- 
OUS CASES. — An  option  to  purchase  mining 
lands  with  the  privilege  of  prospecting  for  and 
mining  ore,  is  a  license  coupled  with  an  interest, 
and  where  a  licensee  under  such  license  was  given 
possession  and  made  expenditures,  the  license  is 
irrevocable,  and  he  is  entitled  to  exclusive  posses- 
sion during  the  life  of  the  agreement,  and  during 
such  time  has  an  interest  in  the  realty  and  in  the 
ores  produced.^ 

An  agreement  between  a  majority  stockholder  of 
a  corporation  and  its  directors  whereby  the  stock- 
holder conveyed  to  the  directors  as  trustee  for  five 
years,  the  legal  title  and  right  to  vote  the  stock,  and 
gave  the  trustees  the  first  right  to  purchase  the 
stock  if  any  party  to  the  agreement  should  desire 
to  discontinue  the  trust  relation,  at  the  expiration 
of  the  five  year  period,  for  double  its  par  value,  for 

3  The  statute  provided  that  agreements  for  the  transfer  of  interest  in 

land  should  not  be  construed  to  abridge  the  powers  of  courts  to 
compel  specific  performance  of  agreements  in  case  of  part  per- 
formance. 

4  See  Sec.  514,  infra. 

I  Hall  V.  Abraham,  44  Ore.  477,  75  P.  882;  see  Grobe  v.  Doyle,  12  Brit. 
Col.  191. 


207  PROPERTY — ESTATE  OF  OPTIONEE  §  506 

the  benefit  of  the  remaining  parties,  made  the 
power  one  coupled  with  an  interest  and  hence 
irrevocable.^ 

An  oral  agreement  between  the  owner  and  the 
optionee  in  possession  who  had  made  valuable 
improvements,  but  whose  option  had  expired,  by 
which  the  owner  agreed  to  pay  commissions  on 
sale  of  the  optioned  property,  made  by  the  optionee, 
is  within  the  California  Statute  of  Frauds  requir- 
ing contracts  for  pajnnent  of  commissions  for  the 
sale  of  real  property  to  be  in  writing.^ 

An  option  contract  on  land,  supported  by  a  valu- 
able consideration  and  duly  acknowledged  and 
certified,  is  recordable  under  the  recording  acts  as 
a  contract  for  an  interest  in  land/  But  it  is  not 
taxable  to  the  vendor  as  an  interest  in  the  land 
though  it  is  taxable  as  a  contract,  and  at  its  valua- 
tion, but  not  necessarily  for  the  purchase  price 
remaining  unpaid,  since  the  optionee  is  not  obli- 
gated to  pay  the  balance  of  the  price. ^  An  option 
does  not  create  a  debt  which  is  taxable  as  such 
against  the  optionor;  nor  is  it  an  "effect  having  a 
market  value,"  within  the  tax  law.*'   An  optionee 

2  Boyer  v.  Nesbitt,  227  Pa.  398,  76  Atl.  103. 
8  Crowell  v.  Ewing,  4  Cal.  App.  358,  88  P.  285. 

4  Chesbrough  v.  Vizard  Inv.  Co.,  156  Ky.  149,  160  S.  W.  725 ;   Stearnes 

V.  Goad,  111  Va.  834,  69  S.  E.  1101,  fees  fixed  by  value  of  option 
privilege  and  not  by  value  of  land;  contra  Shields  Bros.,  In  re 
134  Iowa  559,  111  N.  W.  963,  10  L.  R.  A.  (N.  S.)  1061;  Salisbury 
V.  LaFitte,  21  Colo.  App.  13,  121  P.  952. 

5  McGregor  v.  Ireland,  86  Kan.  426,   121   P.  358;   this  transaction  was 

held  to  be  an  escrow  with  option  to  elect  not  to  complete. 

6  See  Perrigo  v.  City  of  Milwaukee,  92  Wis.  236,  65  N.  W.  1025 ;  Shields 

Bros.,  In  re,  134  Iowa  559,  111  N.  W.  963,  10  L.  R.  A.  (N.  S.) 
1061;  see  Rampton  v.  Dobson.  156  Iowa  315,  136  N.  W.  682;  Branner 
V.  Thomas,  37  Kan.  282,  15  P.  211. 


§  507  LAW  OF  OPTION  CONTRACTS  208 

in  possession  is  not  liable  for  taxes  under  the  rule 
that  a  purchaser  in  possession  must  discharge  the 
taxes/  since  the  optionee  is  not  bound  to  pay  the 
purchase  money  prior  to  election.^ 

Sec.  507.  SALE  AND  RETURN.  SALE  ON 
TRIAL  OR  APPROVAL.  BAILMENT.  GEN- 
ERALLY.— Under  the  common  form  of  option  to 
purchase,  if  the  optionee  fails  to  elect  within  the 
option  time,  his  option  privilege  is  lost.  Action  on 
his  iDart  under  the  option  is  necessary  only  when 
he  desires  to  turn  the  option  into  a  binding  promise 
on  the  part  of  the  optionor,  which  he  may  do  by 
election.  In  this  form  of  option,  the  title  to  the 
property  does  not  vest  in  the  optionee  until  his  elec- 
tion, whereupon  he  becomes  the  equitable  owner. ^ 

In  transactions  like  sale  and  return,  or  more 
specifically  sale  with  option  to  return,  the  title  to 
the  property  at  once  vests  in  the  purchaser  and  the 
title  remains  in  him,  unless,  in  accordance  with 
the  provisions  of  the  option  to  return,  he  season- 
ably exercises  such  right  and  returns  the  property. 

It  will  be  observed  that  in  both  cases  the  failure 
of  the  purchaser  to  act  at  all,  ends  his  option  right, 

7  Olds  V.  Little  Horse  Creek  Cattle  Co.,  22  Wyo.  336,  140  P.  1004. 

8  Olds  V.  Little  Horse  Creek  Cattle  Co.,  22  Wyo.  336,  140  P.  1004. 

To  the  point  that  the  option  is  not  taxable,  see  Schoonover  v.  Petcina, 
126  Iowa  261,  100  N.  W.  490;  Cross  v.  Snakenberg,  126  Iowa  636, 
102  N.  W.  508 ;  Tessier  v.  City  of  Nashua,  75  N.  H.  572,  78  Atl.  495. 

An  agreement  of  sale  obligating  the  purchaser  to  pay  the  price  is 
taxable,  and  the  change  of  an  agreement  of  sale  and  purchase  into 
an  option  for  the  purpose  of  avoiding  taxation  is  a  sham,  and  the 
agreement  is  subject  to  taxation,  Montgomery  v.  Marshall  Co.,  152 
Iowa  161,  129  N.  W.  329. 

1  See  Sees.  501,  514. 


209  PROPERTY — WHEN  TITLE  PASSES  §  507 

but  SO  far  as  the  title  to  the  property  is  concerned 
the  effect  in  the  one  case  is  quite  different  from  that 
in  the  other.  In  the  former,  that  is,  the  conmion 
option  to  purchase,  the  optionee  has  lost  his  option 
right  and  has  not  acquired  the  property;  in  the 
latter,  he  retains  title  to  the  property  because  he 
has  lost  his  option  right  to  return  the  property. 

The  decisions  about  to  be  presented  and  reviewed 
show  the  three  classes  of  transactions  above  men- 
tioned. It  will  be  convenient  to  note  here  that, 
depending  upon  the  intention  of  the  parties  as 
gathered  from  the  contract  and  the  surrounding 
circumstances,  under  a  sale  with  option  to  return, 
the  title  to  the  property  vests  in  the  buyer  and 
re-vests  in  the  seller  only  in  the  event  the  option 
right  to  return  is  exercised.  In  other  words,  this 
kind  of  transaction  is  a  sale  defeasible  on  the  ful- 
filhnent  of  a  condition  subsequent.^ 

In  a  sale  on  trial  or  approval,  there  is  no  sale 
until  the  buyer,  in  the  exercise  of  the  right  so  to 
do,  converts  the  transaction  into  a  sale.  The  latter 
is  for  all  practical  purposes  a  bailment  of  the  prop- 
erty with  the  privilege  of  purchase  on  the  part  of 
the  bailee  if  he  is  satisfied  with  it  and  desires  and 
elects  to  purchase.^ 

2  Allen,  In  re  183  Fed.  172;   Guss  v.  Nelson,  200  U.  S.  298,  50  L.  Ed. 

489,  26  S.  Ct.  260. 

3  0'Donnell  v.   Wing  &   Son,   121   Ga.   717,   49   S.   E.   720;    Gottlieb  v. 

Einaldo,  78  Ark.  123,  93  S.  W.  750,  6  L.  E.  A.  (N.  S.)  273;  Hart  v. 
Carpenter,  24  Conn.  427;  Sargent  v.  Gile,  8  N.  H.  325;  Deering  v. 
Austin,  34  Vt.  330;  Eumpf  v.  Barto,  10  Wash.  382,  38  P.  1129, 
jewelry;  Kahn  v.  Klabunde,  50  Wis.  235,  6  N.  W.  888;  Wiggins  v. 
Tumlin,  96  Ga.  753,  23  S.  E.  75;  State  v.  Betz,  207  Mo.  589,  lOG 
S.  W.  64;  Glascock  v.  Hazell,  109  N.  C.  145,  13  S.  E.  789. 
14 — Option  Contracts. 


§  508  LAW  OF    OPTION  CONTRACTS  210 

Sec.  508.  SAME.  MISCELLANEOUS  CASES. 
— A  contract  of.  sale  and  return  exists  where  the 
privilege  of  purchasing  or  returning  is  not  depen- 
dent on  the  character  or  quality  of  the  property 
sold,  but  rests  entirely  upon  the  option  of  the  pur- 
chaser to  return  or  retain,  in  which  case  the  title 
vests  in  the  purchaser  subject  to  his  option  to 
return  the  property/ 

Under  an  option  to  return  a  purchase  if  the  pur- 
chaser does  not  approve,  the  title  vests  in  the 
purchaser,  subject  to  the  right  to  rescind  and 
return;  under  an  option  to  purchase  if  the  pur- 
chaser does  approve,  the  title  does  not  pass  until 
the  option  to  buy  is  exercised.^ 

The  title  to  rings  does  not  pass  to  the  purchaser 
where  they  are  sent  to  her  under  an  agreement  that 
she  could  keep  the  rings  and  account  to  the  seller 
for  their  specified  value  if  she  was  pleased  with 
them,  otherwise  that  she  should  return  them  to  the 
seller  within  a  reasonable  time.^  Nor,  to  a  machine 
delivered  to  a  prospective  purchaser  under  an 
agreement  to  purchase  "if  satisfied";^  nor,  under 
a  lease  of  a  machine  with  option  to  purchase^  unless 

1  Sturm  V.  Boker,  150  U.  S.  312,  37  L.  Ed.  1093,  14  S.  Ct.  99;  Haskins  v. 

Dem,  19  Utah  89,  56  P.  953. 

2  Steiiihauer  v.  Henson,  54  Colo.  246,  131  P.  255;  citing  Hunt  v.  Wyman, 

100  Mass.  198,  an  option  to  purchase  "if  liked";  also  W.  Irving  S. 
Bros.  V.  Harold,  81  Mo.  App.  461;  Wiggins  v.  Tumlin,  96  Ga.  753, 
23  S.  E.  75. 

3  Gottlieb  V.  Einaldo,  78  Ark.  123,  93  S.  W.  750,  6  L.  E.  A.  (N.  S.)  273; 

Colton  V.  Wise,  7  HI.  App.  395. 

4  James  Smith  Woolen  Mach.  Co.  v.  Holden,  73  Vt.  396,  51  Atl.  2. 

8  standard  S.  M.  Co.  v.  Frame,  2  Pennewill,  (Del.)  430,  48  Atl.  188; 
Wheeler  &  W.  Mfg.  Co.  v.  Heil,  115  Pa.  487,  8  Atl.  616,  2  A.  S.  E. 
575. 


211  PROPERTY-r-WHEN  TITLE  PASSES  §  508 

it  appears  that  it  was  the  intention  of  the  parties 
to  transfer  the  title.® 

Under  a  contract  by  which  one  agrees  to  send 
goods  to  another  for  the  latter  to  sell  or  return,  the 
title  passes  and  the  goods  are  the  property  of  the 
latter  until  he  exercises  his  option  to  return ;  if  the 
agreement  was  that  there  should  be  no  sale  but  the 
receiver  of  the  goods  was  to  sell  them  and  account 
to  the  sender  for  the  proceeds,  the  receiver  does  not 
acquire  title  and  he  is  a  mere  bailee  and,  conse- 
quently, in  the  latter  case,  the  goods  are  not  subject 
to  a  mortgage  of  the  receiver/ 

Where  the  identical  thing  delivered  is  to  be 
restored  though  in  an  altered  form,  the  contract  is 
one  of  bailment,  and  the  title  to  the  property  is  not 
changed ;  but  where  there  is  no  obligation  to  restore 
the  specified  article,  and  the  receiver  is  at  liberty 
to  return  another  thing  of  equal  value,  he  becomes 
the  debtor  to  make  such  return  and  the  title  is 
changed.* 

When  a  party  buys  cattle  and  has  the  bill  of  sale 
made  out  in  his  own  name,  and  leases  the  cattle  to 
another  at  a  certain  rent,  with  the  understanding 
that  the  lessee  may  purchase  the  same  at  any  time 
during  the  hiring,  at  a  certain  price,  by  paying  the 
difference  between  the  rent  paid  and  the  price,  title 

6  Seott  M.  &  S.  Co.  V.  Shultz  &  Clary,  67  Kan.  605,  73  P.  903. 

TFurst  Bros.  v.  Com.  Bank  of  Augusta,  117  Ga.  472,  43  S.  E.  728;  see 
William  Frantz  &  Co.  v.  Fink,  125  La.  1013,  52  So.  131 ;  Hudson  v. 
Seeley  Specialties  Co.,  19  Cal.  App.  213,  124  P.  1051;  In  re  Miller 
&  Brown,  135  Fed.  868;  Curtin  v.  Ingle,  143  Cal.  354,  77  P.  74; 
also  McKenzie  v.  Roper  Wholesale  Grocery  Co.,  9  Ga.  App.  185,  70 
S.  E.  981. 

8  Fleet  V.  Hertz,  201  HI.  594,  66  N.  E.  858,  94  A.  S,  E.  192;  Eeherd's 
Adm'r  t.  Clem,  86  Va.  374,  10  S.  E.  504. 


§  509  LAW  OP  OPTION  CONTRACTS  212 

meantime  to  remain  in  the  vendor,  the  transaction 
is  valid  as  a  lease  with  privilege  to  purchase  and 
the  cattle  are  not  liable  for  the  debts  of  the  lessee.^ 

Sec.  509.  JUDGMENTS,  EXECUTIONS, 
LIENS,  ETC. — In  accordance  with  the  general 
rule  that  an  option  contract  does  not  vest  any 
interest  or  estate  in  the  optionee  prior  to  the  exer- 
cise of  the  right  of  election,  the  courts  hold  that 
an  optionee  has  no  estate  or  interest  in  the  property 
optioned  upon  which  a  judgment  lien  will  attach, 
or  upon  which  an  execution  can  be  levied.  Thus,  in 
a  lease  with  option  to  purchase  where  the  lessee 
had  made  one  payment  under  the  option  and  then 
defaulted,  the  sheriff's  vendee  took  no  title  under 
levy  and  sale  as  property  of  the  lessee.^  On  the 
other  hand,  the  interest  of  the  optionor  in  the  land 
prior  to  election  is  subject  to  levy  and  sale.^ 

A  judgment  creditor  can  not  maintain  a  suit  in 
equity  to  establish  the  lien  of  his  judgment  upon 
land  in  the  possession  of  a  judgment  debtor,  under 
a  lease  for  a  term  of  years  with  option  to  purchase, 
as  no  lien  can  attach  upon  the  mere  option  of  the 
debtor.^  But  where  the  lessee,  under  a  lease  giving 
him  the  right  to  make  improvements  and  also 

9  Miles  V.  Edsall,  7  Mont.  185,  14  P.  701;  also  Evans  v.  Napier,  111  Ga. 
102,  36  S.  E.  426. 

1  Christie's  Appeal,  85  Pa.  St.  463;  see  Provident  Life  etc.  Co.  v.  Mills, 

91  Fed.  435. 
Bailment  with  option  to  purchase,  Bjork  v.  Bean,  56  Minn.   244,  57 
N.  W.  657 ;  also  McClelland  v.  Scroggin,  35  Neb.  536,  53  N.  W.  469. 

2  Sheeby  v.  Scott,  128  Iowa  551,  104  N.  W.  1139,  4  L.  R.  A.  (N.  S.)  365. 

3  Sweezy  v.  Jones,  65  Iowa  272,  21  N.  W.  603;  Bras  v.  Sheffield,  49  Kan. 

702,  31  P.  306,  33  A.  S.  R.  386. 


213  PROPERTY — JUDGMENT  ETC.  AGAINST  §  509 

giving  the  lessor  an  option  to  purchase  the  same, 
makes  improvements,  his  interest  is  bound  by  a 
judgment  against  him.'' 

Where  an  assignee  of  an  unrecorded  option  for 
the  purchase  of  real  estate,  assigned  the  option 
prior  to  the  issuance  of  an  execution  and  a  judg- 
ment against  him,  he  has  no  title,  and  a  levy  and 
sale  of  the  property  under  the  execution,  conveyed 
no  title  to  the  purchaser.^ 

An  optionee  who  enters  into  possession  and 
works  the  mining  property,  and  employs  laborers 
to  perform  such  work,  is  neither  a  vendee  nor  the 
agent  of  the  optionor-owner  under  the  lien  law,  and 
such  work  establishes  no  indebtedness  against  the 
optionor,  and  fastens  no  lien  against  the  estate  of 
the  optionor  in  the  property.*^ 

In  California  it  is  held  that  where  the  lease- 
option  contemplates  the  working  of  the  mine  with 
a  view  of  developing  it,  and  the  lessee  takes  posses- 
sion, develops  the  same  and  employs  laborers  for 
the  purpose,  he  is  the  statutory  agent  of  the  lessors, 
and  the  laborers  are  entitled  to  liens  against  the 

4  Ely  V.  Beaumont,  5  S.  &  E.  (Pa.)   124,  election  had  been  made. 

5  Salisbury  v.  LaFitte,  21  Colo.  App.  13,  121  P.  952, 

6  Harper  v.  Independent  Dev.  Co.,  13  Ariz.  176,  108  P.  701;  also  Williams 

V.  Eldora  M.  Co.,  35  Colo.  127,  83  P.  780;  Milwaukee  Gold  M.  Co. 
V.  Tomkins-Cristy  Hardware  Co.,  26  Colo.  App.  155,  141  P.  527; 
see  Luigart  v.  Lexington  Turf  Club,  130  Ky.  473,  113  S.  W.  814. 
The  amendment  of  1912  to  Arizona  statute  giving  employee  of  pur- 
chaser of  mining  property  a  lien  for  labor  cannot  be  given  a 
retroactive  operation  and  therefore  does  not  apply  to  an  owner 
who  gave  an  option  prior  to  the  amendment,  Oceanic  G.  M.  Co.  v. 
Steinfeld,  16  Ariz.  571,  147  P.  717. 


§  510  LAW  OF  OPTION  CONTRACTS  214 

property  for  their  work,^  unless  the  lien  claimants 
know  of  the  status  of  the  lessee  and  his  interest 
under  the  contract,  and  with  such  knowledge,  work 
for  the  lessee  as  principal  and  look  to  him  for  their 
wages,  in  which  case  the  lien-claimants  would  not 
be  entitled  to  a  lien  for  their  work.® 

Sec.  510.  MORTGAGES.— Where  a  person 
leases  land  for  a  definite  period  and  has  a  clause 
in  the  lease  giving  him  the  right  to  purchase  the 
property,  at  any  time  before  the  expiration  of  the 
lease,  the  interest  acquired  under  it  may  be  mort- 
gaged, under  the  Kentucky  statute,  which  provides 
that  "any  interest  in  or  claim  to  real  estate  may 
be  disposed  of  by  deed  or  will  in  writing."^ 

A  mortgage  of  a  leasehold  estate  of  a  lessee  upon 
whom  the  lease  confers  the  privilege  of  purchasing 
the  premises  partly  on  credit,  at  a  price  named,  at 
any  time  during  the  term,  does  not  convey  to  the 
mortgagee  the  right  to  sell  such  option  privilege  of 
purchase.^ 

TMcClung  V.  Paradise  G.  M.  Co.,  164  Cal.  517,  129  P.  774;  this  was 
under  the  provisions  of  the  California  lien  law  requiring  the 
owner  (not  the  contractor)  to  post  notice  of  non-responsibility,  in 
order  to  prevent  liens  from  attaching  to  his  estate  in  the  land. 

8  Street  v.  Hazzard,  (Cal.  App.)  149  P.  770. 

1  Bank  of  Louisville  v.  Baumiester,  87  Ky.  6,  7  S.  W.  170,  9  Ky.  L.  Rep. 

845 ;  in  this  case  it  appeared  the  lessor  assented  to  the  mortgage 
by  making  himself  a  party  to  it.  This  case  also  holds  that  the 
mortgage  on  the  option  right  (a  warehouse  having  been  erected) 
was  prior  to  second  mortgage  by  optionor  given  after  he  had  ob- 
tained a  deed. 
See  McCauley  v.  Coe,  150  111.  311,  37  N.  E.  232,  mortgage  as  cloud  on 
title. 

2  Menger  v.  Ward,  87  Tex.  622,  30  S.  W.  853 ;   this  was  placed  on  the 

ground  that  a  credit  was  given  to  the  optionee  and,  therefore,  the 
option  was  personal  to  him  and  could  not  be  assigned. 


215  PROPERTY — MORTGAGE  OF  §  510 

M,  in  building  a  house,  by  mistake,  built  part  of 
it  on  land  of  an  adjoining  owner,  B.  B  gave  M 
an  option  on  the  25  feet  of  his  lot  covered  by  the 
house,  for  $250  for  six  months  from  date,  and 
M  by  endorsement  accepted  the  offer.  M  then 
replatted  and  filed  a  map  of  the  land,  including 
the  25  feet,  and  gave  a  mortgage  thereon  to  the  O. 
S.  Company,  which  was  recorded.  B's  offer  to  M 
was  not  acted  on  within  the  six  months,  and  after- 
ward, B  sold  the  25  feet  to  M  for  $400,  $100  cash 
and  $300  by  mortgage  taken  by  B  's  daughter.  The 
O.  S.  Company  subsequently  sold  under  its  power 
of  sale  in  the  mortgage.  In  an  action  by  B  's  daugh- 
ter to  release  the  first  mortgage,  it  was  held  that 
M,  not  having  completed  or  acted  upon  his  option 
within  the  six  months,  it  was  at  an  end,  but  that 
the  O.  S.  Company,  by  the  sale,  was  the  owner  of 
the  land  including  the  25  feet  subject  to  the  $300 
mortgage  to  B's  daughter  which  was  held  to  be  a 
first  lien  on  the  land.^ 

2  Mortgage  of  lands  by  one  holding  under  a  lease  for  a  year,  with 
option  of  purchasing  the  land,  does  not  pass  the  option  right  to  the 
mortgagee,  Conn  v.  Tonner,  86  Iowa  577,  53  N.  W.  320. 
See  Halsted's  Ex.  v.  Colvin,  51  N.  J.  Eq.  387,  26  Atl.  928,  where  pri- 
ority of  mortgage  on  option  privilege  was  claimed,  but  where 
neither  the  mortgagor  nor  mortgagee  paid  the  option  price,  the 
court  saying  that  where  the  mortgage  covers  a  mere  privilege  to 
buy,  subject  to  a  condition  that  a  specific  sum  of  money  shall 
be  paid  as  purchase  money,  and  the  mortgagor-optionee  fails  to 
perform  the  condition,  it  follows  that  when  the  land  is,  by  force  of 
judicial  decree  of  the  court,  conveyed  to  and  paid  for  by  some 
person  other  than  the  mortgagor-optionee,  the  privilege  mortgaged 
becomes  extinct. 

B  Nevitt  V.  McMurray,  14  Ont.  App.  126. 


§  511  LAW  OP  OPTION  CONTRACTS  216 

Sec.  511.  INSURABLE  INTEREST  IN 
OPTIONED  PROPERTY.— The  interest  of  the 
owner  of  property  which  another  holds  under  his 
option  to  purchase,  which  is  irrevocable  by  the 
owner,  but  which  the  optionee  has  not  bound  him- 
self to  accept,  and  which  he  is  free  to  abandon,  is 
the  sole  and  unconditional  ownership  of  the  prop- 
erty within  the  meaning  of  a  sole  and  unconditional 
ownership  clause  in  an  insurance  policy,  because 
the  owner  can  not  compel  the  optionee  to  take  the 
property  or  suffer  the  loss.^ 

A  mere  option  contract  for  the  sale  of  insured 
property  under  which  nothing  has  been  done  before 
the  loss,  is  not  within  a  condition  in  a  policy  of 
insurance  against  change  of  title.^ 

A  lessee  with  option  to  purchase  land  on  which 
a  building  owned  by  him  is  situated,  has  not  the 
fee  simple  title  to  the  land  within  the  Oregon 
statute,  providing  that  fire  policies  shall  be  void,  if 
the  interest  of  the  insured  be  other  than  the  uncon- 
ditional and  sole  ownership.^ 

The  interest  of  a  purchaser  of  lumber  under  an 
option,  who  has  paid  the  optionor  $2,000  in  cash, 
under  an  agreement  with  the  optionor  to  insure 
the  lumber  and  assign  the  policy  to  the  optionee,  is 

1  Phenix  Ins.  Co.  v.  Kerr,  129  Ted.  723,  64  C.  C.  A.  251,  66  L.  E.  A.  569; 

Milwaukee  Meeh.  Ins.  Co.  v.  Ehea,  123  Fed.  9,  60  C.  C.  A.  103, 
vendee  in  possession  and  obligated  to  buy;  Brickell  v.  Atlas  Assur. 
Co.,  10  Gal.  App.  17,  101  P.  16,  sale  and  not  option;  see  next  section. 

2  House  V.  Security  Fire  Ins.  Co.,  145  Iowa  462,   121  N.  W.  509 ;   also 

Pringle  v.  Ins.  Co.,  107  Iowa  742,  77  N.  W.  521;  Wunderlich  v. 
Palatine  F.  Ins.  Co.,  104  Wis.  395,  80  N.  W.  471. 

3  Finlon  v.  National  Union  Fire  Ins.  Co.,  65  Ore.  493,  132  P.  712;   see 

Mers  V.  Franklin  Ins.  Co.,  68  Mo.  127. 


217  PROPERTY — INSURABLE  INTEREST  IN         §  512 

the  amount  of  money  paid  under  the  option,  and 
not  the  difference  between  the  market  vahie  of  the 
lumber  sold  and  the  unpaid  portion  of  the  option 
price." 

Sec.  512.  RIGHT  TO  INSURANCE  MONEYS. 

— Prior  to  election  to  purchase  by  the  optionee,  the 
title  to  the  property  remains  in  the  optionor  and, 
of  course,  the  optionor  has  an  insurable  interest  in 
the  property,  and  the  optionee  has  not.  A  policy  of 
insurance  being  a  personal  contract  between  the 
insurer  and  the  insured,  and  the  optionor,  prior  to 
election,  being  the  only  person  having  an  insurable 
interest  in  the  property,  it  follows  that  in  the 
absence  of  a  contract  between  the  optionee  and 
optionor,  the  insurance  moneys  under  a  policy 
taken  out  by  the  optionor,  in  case  of  loss  or  damage 
to  the  property,  belong  to  him  absolutely. 

The  optionee,  therefore,  is  entitled  to  the  insur- 
ance money  in  two  cases.  First,  where  he  takes  out 
the  insurance  in  his  own  name,  and  for  his  o\\Ta 
benefit,  to  cover  his  interest  upon  election  to  pur- 
chase, and,  secondly,  when  by  virtue  of  the  contract 
with  the  optionor,  he  becomes  entitled  to  the  whole 
or  some  part  of  the  insurance  money  payable  to  the 
optionor.^ 

Thus,  under  the  terms  of  a  lease  with  option  to 
purchase  at  a  fixed  sum,  the  landlord  covenanted  to 
insure  the  premises.  Before  the  time  for  exercising 
the  option,  the  buildings  on  the  premises  burned 
and  the  landlord  received  the  insurance  money. 

4  Wunderlich  v.  Palatipe  Fire  Ins.  Co.,  104  Wis.  395,  80  N.  W.  471. 
1  See  Gilbert  v.  Port,  28  Ohio  St.  276. 


§  512  LAW  OF  OPTION  CONTRACTS  218 

The  tenant  after  the  fire,  exercised  his  option  to 
purchase  and  claimed  the  insurance  money  as  part 
of  his  purchase  price.   The  claim  was  disallowed.^ 

When,  however,  the  tenant  of  the  premises,  under 
a  lease  and  option  to  purchase,  is  bound  to  insure, 
and  does  insure,  and  the  premises  are  damaged  by 
fire  before  his  election  to  purchase,  he  is  entitled 
to  have  the  insurance  money  applied  on  the  pur- 
chase price.^  So,  where  the  lessee  insuring  in  the 
name  of  the  lessor  in  an  amount  agreed  on  by  them, 
and  a  loss  occurring,  the  lessor  received  the  insur- 
ance money  and  expended  part  of  it  in  restoring  the 
premises,  it  was  held  the  lessee,  on  subsequently 

2  Edwards  v.  West,  7  Ch.  Div.  858,  47  L.  J.  Ch.  463,  38  L.  T.  Rep. 
(N.  S.)  481,  26  Wkly.  Rep.  507,  on  the  theory  that  the  election  did 
not  relate  back  to  the  execution  of  the  option;  Lawes  v.  Bennett, 
1  Cox  167,  29  Eng.  Reprint  1111,  not  followed. 
Also  Caldwell  v.  Frazier,  65  Kan.  24,  68  P.  1076,  holding  equity  will 
not  decree  specific  performance  with  buildings  restored  or  abate 
the  price. 

8  Reynard  v.  Arnold,  L.  R.  10  Ch.  386,  23  Wkly.  Rep.  804;  in  this  case 
the  landlord  also  took  out  a  policy  in  another  company.  The  two 
companies  apportioned  the  amount  of  loss  between  the  two  policiesu 
The  court  applied  the  whole  amount;  distinguished  in  Edwards  v. 
West,  supra. 

People's  St.  Ry.  Co.  v.  Spencer,  156  Pa.  85,  27  Atl.  113,  36  A.  S.  R. 
22,  holding  election  after  fire  related  back  to  the  beginning  of  the 
transaction  and  entitled  optionee  to  insurance  money. 

Court  refused  to  apply  insurance  moneys,  where  optionee  was  in  de- 
fault in  payment  of  rent  under  lease  (with  option  to  purchase),  to 
the  rent  in  default  and  purchase  price,  Gilbert  v.  Port,  28  Ohio  St. 
276,  but  was  applied  on  price  under  escrow  option,  distinguishing 
Gilbert  v.  Port,  supra;  Kaufman  v.  All  Persons,  16  Cal.  App.  388, 
117  P.  586. 

In  the  later  case  of  Smith  v.  Loewenstein,  50  Ohio  St.  346,  34  N.  E. 
159,  161,  it  is  said  that  Gilbert  v.  Port,  supra,  did  not  hold  the  rule 
applied  ' '  to  optional  contracts  as  well  as  to  those  absolute. ' ' 

An  election  to  purchase  on  condition  insurance  moneys  are  applied  to 
benefit  of  optionee  is  bad,  Clark  v.  Burr,  85  Wis.  649,  55  N.  W. 
401. 


219  PROPERTY — POSSESSION   OP  §  513 

exercising  his  option  to  purchase,  was  entitled  to 
have  the  balance  of  the  insurance  money  in  the 
lessor's  hands  credited  as  pajnnent  on  the  price/ 

Sec.  513.  POSSESSION".— The  optionee  is  not 
entitled  to  possession  of  the  property  in  the  absence 
of  an  express  stipulation  to  that  effect  until  he 
becomes  entitled  to  a  deed  of  conveyance.^  Nor, 
does  the  fact  that  the  optionee  takes  possession  give 
him  any  estate  in  the  land.  Such  possession  is,  at 
most,  a  mere  license,  until  the  optionee  performs 
the  option  contract."  And  it  seems  that  the  making 
of  improvements  by  the  optionee,^  or  remaining  in 
possession  after  the  expiration  of  the  tenancy,^  does 
not  change  the  rule. 

If  the  option  gives  the  optionee  the  right  of  pos- 
session and  also  grants  to  him  certain  rights  with 
reference  to  the  use  of  the  lands,  his  interest  or 
estate,  wiU,  of  course,  depend  upon  the  terms  of  the 
option.  For  instance,  an  option  to  purchase  mining 
land  with  the  privilege  of  prospecting  for  and  min- 
ing ore  is  a  license  coupled  with  an  interest,  and 
when,  under  such  option,  the  optionee  goes  into 

4  Williams  v.  LUley,  67  Conn.  50,  34  Atl.  765,  37  L.  R.  A.  150,  criticis- 
ing Edwards  v.  West,  supra,  and  Gilbert  v.  Port,  supra. 

1  Frank  v.   Stratford-Handeock,   13  Wyo.   37,   77  P.   134,   110   A.  S.  R. 

963,  67  L.  R.  A.  571 ;  Jersey  City  v.  Flynn,  74  N.  J.  Eq.  104,  70  Atl. 
497;  Kissack  v.  Bourke,  132  HI.  App.  360,  extension;  City  of  Los 
Angeles  v.  Water  Co.,  124  Cal.  368,  57  P.  210. 

2  Kingsley  v.  Kressly,  60  Ore.  167,  118  P.  678,  Anno.  Cas.  1913E,  746. 

See  Mers  v.  Ins.  Co.,  68  Mo.  127,  optionee  went  into  possession  and 
took  a  lease  of  the  same  premises. 

SBostvsdck  V.  Hess,  80  HI.  138;  Henry  v.  Perry,  110  Ga.  630,  36  S,  E. 
87,  optionee  in  possession  is  trespasser  and  not  tenant. 

4  Goodman  v.  Spurlin,  131  Ga.  588,  62  S.  E.  1029. 


§  514  LAW  OF  OPTION  CONTRACTS  220 

possession  and  makes  expenditures,  tlie  license 
becomes  irrevocable  during  its  life,  and  the  op- 
tionee, during  such  time,  has  an  interest  in  the 
realty  and  in  the  ores.° 

Sec.  514.  UPON  EXERCISE  OF  OPTION 
TO  PURCHASE  EQUITABLE  TITLE  VESTS 
IN  OPTIONEE.— We  have  seen  that  the  effect  of 
a  timely  exercise  of  the  right  of  election  by  the 
optionee,  is  to  convert  the  option  contract  into  a 
binding  promise  on  the  part  of  the  optionor  to  sell, 
and  where  the  election  meets  the  requirements  of 
the  Statute  of  Frauds,  an  agreement  of  sale  and 
purchase  is  raised,  an  agreement  which  is  enforce- 
able by  either  party  against  the  other.  It  follows, 
therefore,  in  the  latter  case,  that  when  this  event 
takes  place,  the  optionee  becomes  vested  with  the 
equitable  title,  the  rule  being  that  the  optionor 
holds  the  legal  title  in  trust  for  the  optionee  and 
the  optionee  holds  the  purchase  money  for  the 

5  Hall  V.  Abraham,  44  Ore.  477,  75  P.  882 ;  see  Witherspoon  v.  Staley, 
(Tex.  Civ.  App.)  156  S.  W.  557;  Smith  v.  Jones,  21  Utah  270,  60 
P.  1104. 

Optionee  not  entitled  to  retain  possession  as  against  the  optionor 
when  in  default  in  paying  installments  of  the  price,  though  title 
of  optionor  is  encumbered  by  mortgage  and  tax  liens.  Champion 
G.  M.  Co.  V.  Champion  Mines,  164  Cal.  205,  128  P.  315,  or  where 
he  fails  to  perform  stipulated  work  on  the  premises,  Briles  v. 
Paulson,  (Cal.)   149  P.  804. 

Town  of  Bristol  v.  Waterworks,  25  E.  I.  189,  55  Atl.  710,  care  by 
optionee  in  possession  of  water  works  after  election  and  pending 
appraisal. 

Eight  to  possession  of  piano  under  lease  and  option  to  purchase  as 
between  administrator  and  widow  of  deceased  optionee,  Powell  v. 
Eckler,  96  Mich.  538,  56  N.  W.  1. 


221  PROPERTY — WHEN  EQUITABLE  TITLE  VESTS  §  514 

optionor;  in  other  words,  upon  exercising  the 
option,  the  optionee  becomes  the  equitable  owner 
of  the  land  and  the  optionor  the  equitable  owner  of 
the  purchase  money. ^  And  a  timely  election,  and 
payment  of  the  price  where  necessary,  relate  back 
to  the  date  of  the  option  and  thus  protect  the 
optionee  against  subsequent  purchasers  of  the 
optioned  property  with  notice  of  the  rights  of  the 
optionee.^ 

It  is  held  by  some  courts  that  an  election  without 
payment  or  tender  of  the  price  is  such  perform- 
ance as  will  vest  the  equitable  title  in  the  optionee. 
This  is  true  in  those  cases  where  payment  is  not 
the  election,  or  is  not  required  to  be  made  concur- 
rently therewith.^  But  it  is  not  true  where  payment 
is  one  of  the  elements  of  the  election,  as  no  equitable 
title  or  other  interest  vests  in  the  optionee  without 

1  Waters  v.  Bew,  52   N.  J.  Eq.   787,   29  Atl.   590 ;   see  Smith  v.   Jones, 

21  Utah  270,  60  P.  1104;  Gustin  v.  School  Dist.,  94  Mich.  502,  54 
N.  W.  156,  34  A.  S.  R.  361;  Waterman  v.  Banks,  144  U.  S.  394, 
36  L.  Ed.  479,  12  S.  Ct.  646;  Chas.  J.  Smith  Co.  v,  Anderson, 
(N.  J.  Eq.)  95  Atl.  358,  option  in  lease. 

2  Crowley  v.  Byrne,  71  Wash.  444,  129  P.  113. 

Donnally  v.  Parker,  5  W.  Va.  301. 

But  not,  of  course,  as  against  a  bona  fide  purchaser  from  the  optionor 
(Sec.  515),  as  the  optionee  ia  considered  a  "vendee"  within  the 
rule  and  is  put  on  inquiry  as  to  the  relation  of  the  optionor  to  the 
title,  Thompson  &  F.  L.  Co.  v.  Dillingham,  223  Fed.  1000. 

And  it  is  further  held  that  when  the  optionee  of  land  had  notice  of  a 
prior  unrecorded  deed  to  a  third  person,  before  he  exercised  his 
option  or  paid  the  purchase  price  the  optionee  was  not  a  hona  fide 
purchaser,  Lindley  v.  Blumberg,  7  Cal.  App.  140,  93  P.  894. 

8  See  Penn  Min.  Co.  v.  Smith,  210  Pa.  49,  59  Atl.  316;  Penn  Min.  Co.  v. 
Martin,  210  Pa.  53,  59  Atl.  436. 

Deed  granting  land  on  condition  that  title  shall  not  vest  unless  payment 
of  price  made  within  certain  time  as  cloud  on  title,  see  Borst  v. 
Simpson,  90  Ala.  373,  7  So.  814, 


§  515  LAW  OF  OPTION  CONTRACTS  222 

his   full   performance   of   the   conditions   of   the 
option.^ 

Again,  it  would  seem  that  an  election  which  does 
not  bind  the  optionee  to  pay  the  price,  does  not 
have  the  effect  to  vest  the  equitable  title  in  the 
optionee.  Thus,  if  the  election  be  oral  and  therefore 
one  which  could  not  be  enforced  at  the  suit  of  the 
optionor  because  of  the  Statute  of  Frauds,  the  rule 
would  not  apply  because  the  rule  is  based  on  a 
contract  having  mutual  enforceable  obligations, 
that  is,  a  sale  and  purchase  as  distinguished  from 
an  option.^ 

Sec.  515.  BONA  FIDE  PURCHASERS  OF 
OPTION  PROPERTY.  NOTICE.— The  distinc- 
tion between  a  "mere  offer"  and  an  option  contract 
should  be  kept  in  mind.  The  option  contract  we 
are  discussing  is  one  supported  by  a  valuable 
consideration,  and,  therefore,  irrevocable  by  the 
optionor  during  the  time  limit.  A  mere  unaccepted 
offer  gives  neither  right  nor  estate  which  a  pur- 
chaser is  bound  to  notice.^ 

4  Flynn  v.  White  Breast  Coal  Co.,  72  Iowa  738,  32  N.  W.  471,  holding 
that  coal  mined  between  date  of  election  and  payment  of  price 
belonged  to  optionor. 

6  See  Sheeby  v.  Scott,  128  Iowa  551,  104  N.  W.  1139,  4  L.  R.  A.  (N.  S.) 
365;  Stembridge  v.  Stembridge,  87  Ky.  91,  7  S.  W.  611,  9  Ky.  L. 
Rep.  948;  Wehn  v.  Fall,  55  Neb.  547,  76  N.  W.  13,  70  A.  S.  R.  397; 
Teal  V.  McNight,  110  La.  256,  34  So.  434. 
It  is  only  when  the  party  holding  a  contract  of  purchase  has,  by 
performance  on  his  part,  placed  himself  in  a  position  to  compel 
specific  performance,  that  he  holds  the  equitable  title.  Smith  v. 
Jones,  21  Utah  270,  60  P.  1104. 

1  Graybill  v.  Braugh,  89  W.  Va.  895,  17  S.  E.  558,  559,  37  A.  S.  R.  894, 
21  L.  R.  A.  133;  see  Watkins  v.  Robertson,  105  Va.  269,  54  S.  E. 
33,  115  A.  S.  R.  880,  5  L.  R.  A.  (N.  S.)  1194;  Sprague  v.  Schotte, 
48  Ore.  609,  87  P.  1040. 


223  PROPERTY — BONA  FIDE  PURCHASERS  §  515 

The  optionor  may  withdraw  the  offer  at  any  time 
before  acceptance,  and  a  sale  of  the  property,  or 
any  other  act  showing  an  intention  to  withdraw  and 
brought  to  the  knowledge  of  the  optionee  is  suf- 
ficient for  that  purpose.  If,  however,  there  has  been 
a  timely  acceptance  of  a  ''mere  offer,"  a  purchaser 
who  thereafter  purchases  the  property  with  notice, 
takes  it,  subject  to  the  rights  of  the  optionee  under 
his  option. 

And  the  same  rule  obtains  where  the  option  con- 
tract is  supported  by  a  valuable  consideration.  The 
principle  runs  through  all  of  the  decisions  that 
while  an  option  contract  based  upon  a  valuable 
consideration  does  not  vest  in  the  optionee  any 
interest  or  estate  in  the  land,  or  property,  yet  it 
does  grant  to  the  optionee  a  right  which  during 
the  time  limit,  a  court  of  equity  will  protect  as 
against  the  purchaser  of  the  optioned  property 
with  notice.^  And  the  same  rule  obtains  in  juris- 
dictions where  a  sealed  option  is  recognized.^ 

2  This  is  in  accordance  with  the  rule  that  a  purchaser  who  takes  a 
deed  with  notice  of  an  outstanding  equitable  right,  takes  it  subject 
to  such  right,  see  Brooks  v.  Wentz,  61  N.  J.  Eq.  474,  49  Atl.  147; 
Smith  V.  Bangham,  156  Cal.  359,  104  P.  689,  28  L.  E.  A.  (N.  S.)  522; 
Boyd  V.  Brinckin,  55  Cal.  427;  Copple  v.  Aigeltinger,  167  Cal.  706, 
140  P.  1073;  Horgan  v.  Russell,  24  N.  D.  490,  140  N.  W.  99,  43 
L.  R.  A.  (N.  S.)  1150;  Barrett  v.  McAllister,  33  W.  Va.  738,  11 
S.  E.  220;  Clark  v.  Gordon,  35  W.  Va.  735,  14  S.  E.  255;  Donnally  v. 
Parker,  5  W.  Va.  301,  election  relates  back  to  date  of  option ;  Sizer 
V.  Clark,  116  Wis.  534,  93  N.  W.  539;  Kerr  v.  Day,  14  Pa.  112, 
53  Am.  Dec.  526;  Crowley  v.  Byrne,  71  Wash.  444,  129  P.  113; 
Bryant  Timber  Co.  v.  Wilson,  151  N.  C.  154,  65  S.  E.  932,  lis  pen- 
dens; Ross  V.  Parks,  93  Ala.  153,  8  So.  368,  30  A.  S.  R.  47,  11 
L.  R.  A.  148;  Lazarus  v.  Heilraan,  11  Abb.  N.  C.  (N.  Y.)  93; 
Houghwout  V.  Murphy,  23  N.  J.  Eq.  531;  Cummins  v.  Beavers, 
103  Va.  230,  48  S.  E.  891,  106  A.  S.  R.  881,  1  Ann.  Cas.  986;  City  of 
Birmingham  v.  Forney,  173  Ala.  1,  55  So.  618 ;  Frank  v.  Stratford- 
Handcock,  13  Wyo.  37,  77  P.  134,  110  A.  S.  R.  963,  67  L.  R.  A.  571; 
Collins  V.  Whigham,  58  Ala.  438;   Daniels  v.  Davison,  16  Ves.  Jr. 


§  515  LAW  OP  OPTION  CONTRACTS  224 

When  land  is  subject  to  a  lease  and  option  to 
purchase,  the  lessor  and  lessee  can  not  vary  the 
terms  of  the  option  as  against  the  grantee  of  the 
lessor.  The  grantee  stands  in  the  place  of  the  lessor 
and  may  enforce  the  terms  of  the  lease,^  and  where 
the  purchaser  from  the  optionor,  or  vendor,  has 
notice  of  option  rights  on  the  property,  he  stands 
in  the  same  equity  as  the  optionor  and  will  be  com- 
pelled to  perform  the  contract  with  the  optionee 
to  the  same  extent  as  the  vendor  would  have  been 
liable  to  perform.^ 

Notice  to  an  agent  of  one  taking  an  option  to 
purchase  land,  of  a  prior  sale  of  the  land,  is  not 

249;  see  Manchester  Ship  Canal  Co.  v.  Manchester  R.  Co.,  2  Ch.  Div. 
37,  70  L.  J.  Ch.  468,  84  L.  T.  Eep.  (N.  S.)  436,  17  L.  T.  R.  410,  49 
Wkly.  Rep.  418 ;  Croften  v.  Ormsby,  25  Sch.  &  Lef .  583 ;  Taylor  v. 
Stibbert,  2  Ves.  439;  Graybill  v.  Braugh,  89  Va.  895,  17  S.  E.  558,  21 
L.  R.  A.  133,  37  A.  S.  R.  894,  holds  to  the  contrary  (Reporter,  p.  559), 
but  in  principle  is  overruled  by  subsequent  decisions  of  the  same 
court.  See  Sec.  1223. 

2  Case  where  the  optionor  took  an  assignment  of  his  option  to  G  from 

G's  first  assignee,  without  notice  of  second  assignment  by  G  to 
M  &  S,  Moyses  v.  Hewitt,  20  Idaho  311,  118  P.  839. 

3  Savereux  v.  Tourangeau,  16  Ont.  L.  Rep.  600. 

4  Millard  v.  Martin,  28  R.  I.  494,  68  Atl.  420 ;  in  this  case  the  lessor 

sought  to  defeat  specific  performance  at  the  suit  of  his  grantee  by 
accepting  the  offer  of  the  lessee-optionee  to  pay  less  than  the  option 
price. 

See  Oland  v.  McNeil,  32  Can.  Sup.  Ct.  23,  (modifying  34  Nova  Scotia 
543),  holding  that  a  transferee  of  an  interest  in  lands  under  an 
instrument  absolute  on  its  face,  although  burdened  with  a  trust  to 
sell  and  account  for  the  price,  may  validly  convey  such  interest  with- 
out notice  to  the  equitable  owners. 

Subsequent  mortgagees  charged  with  notice.  Smith  v.  Gibson,  25  Neb. 
511,  41  N.  W.  360. 

5WUkins  V,  Somerville,  80  Vt.  48,  66  Atl.  893,  11  L.  R.  A.  (N.  S.) 
1183;  King  v.  Prospect  Point  Fishing  Club,  (Md.)  94  Atl.  780; 
Anderson  v.  Anderson,  251  111.  415,  96  N.  E.  265,  Ann.  Cas.  1912C,  556. 


225  PROPERTY — BONA  FIDE  PURCHASERS  §  515 

notice  to  one  purchasing  the  option  from  the  one 
to  whom  it  was  given.*' 

Possession  of  a  tenant  under  a  lease  is  notice  of 
his  option  to  purchase  when  inquiry  by  a  purchaser 
would  elicit  knowledge  of  the  same,^  notwithstand- 
ing the  option  was  not  contained  in  the  recorded 
lease,  the  optionee  having  been  in  possession  a  long 
time  and  having  erected  buildings  thereon  which 
were  occupied  by  him  as  a  store. ^ 

AVhen  the  purchaser  derives  title  through  a  deed 
which  contains  an  option  which  is  sought  to  be 
enforced  in  equity,  he  is  chargeable  with  construc- 
tive notice  of  the  option.^ 

Under  the  rule,  to  protect  a  purchaser  of  the 
optioned  property  without  notice  of  the  option 
thereon,  the  purchaser  must  have  paid  the  purchase 
money  in  full,^*^  and  before  notice.^^  When  the  pur- 

6  Chesbrough  v.  Vizard  Inv.  Co.,  156  Ky.  149,  160  S.  W.  725. 

7  Kerr  v.  Day,  14  Pa.  112,  53  Am.  Dec.  526;  Harper  v.  Runner,  85  Neb. 

343,  123  N.  W.  313 ;  Parker  v.  Gortatowsky,  127  Ga.  560,  56  S.  E. 
846 ;  Daniels  v.  Davison,  16  Ves.  Jr.  249 ;  see,  however,  Taylor  v. 
Kelly,  56  N.  C.  240;  Clough  v.  Cook,  (Del.  Ch.)  87  Atl.  1017,  cove- 
nant to  renew  lease  at  lessee 's  option. 
New  lessee  with  notice  holds  lease  as  trustee  for  old  lessee,  McCourt  v. 
Singers-Bigger,  145  Fed.  103,  76  C.  C.  A.  73;  7  Ann.  Gas.  287;  see 
Pheby  v.  Mining  Co.,  10  Ariz.  88,  85  P.  952. 

8  Dengler  v.  Fowler,  94  Neb.  621,  143  N.  W.  944,  option  in  lease,  and 

the  same  rule  holds  where  the  option  is  recorded. 
Donnally  v.  Parker,  5  W.  Va.  301. 
Hamilton  v.  Ingram,  13  Tex.  Civ.  App.  604,  35  S.  E.  748,  seems  to  hold 
contrary  to  the  Dengler  decision. 

9  Van  Dorn  v.  Robinson,  16  N.  J.  Eq.  256. 

10  Tibbs  V.  Zirkle,  55  W.  Va.  49,  46  S.  E.  701,  104  A.  S.  R.  977,  2  Ann. 

Gas.  421;  see  Houghwout  v.  Murphy,  23  N.  J.  Eq.  531. 

11  Trice  v.  Comstock,  121  Fed.  620,  57  G.  G.  A.  646,  61  L.  R.  A.  176; 

Veith  V.  McMurtry,  26  Neb.  341,  42  N.  W.  6;  in  Young  v.  Matthews 
Turner  Go.,  168  Gal.  671,  143  P.  1029,  it  is  held  that  the  remedy 
of  the  optionee,  after  sale  by  the  optionor,  was  on  the  facts,  for 
15 — Option  Contracts. 


§  516  LAW  OF  OPTION  CONTRACTS  226 

chaser  has  no  notice  at  the  time  of  the  purchase, 
but  receives  notice  before  completing  all  the  pay- 
ments, he  must  account  to  the  holder  of  the  equities 
for  so  much  of  the  purchase  money  as  remains 
unpaid, ^^  but  it  would  seem  that  a  purchaser  is 
protected  when  at  the  time  of  the  purchase,  without 
notice,  he  absolutely  obligates  himself  to  take  the 
optioned  property  and  pay  the  price/^ 

Sec.  516.  EIGHTS  UNDER  JUNIOR  AND 
SENIOR  OPTIONS.— Defendant  claiming  to 
have  purchased  under  a  prior  option  which  had 
expired  before  defendant  purchased,  can  not  object 
that  the  consideration  for  plaintiff's  option  was  not 
paid  when  the  contract  of  option  was  executed.^ 

An  option  was  given  subject  to  a  prior  option  to 
purchase  at  a  certain  price.  The  prior  option  was 
exercised  and  the  payment  provided  for  therein 
was  made.  Thereafter  and  with  notice  the  holder 
of  the  prior  option  procured  a  conveyance  claimed 
to  be  under  his  option,  but  for  less  than  the  price 
stated  therein,  and  it  was  held  that  the  holder  of 
the  junior  option  acquired  the  right  to  insist  that 

damages.  See  Marthinson  v.  King,  150  Fed.  48,  82  C.  C.  A.  360; 
Manchester  S.  C.  Co.  v.  Manchester  R.  Co.,  supra. 

12  Sparks  v.  Taylor,  99  Tex.  411,  90  S.  W.  485,  6  L.  R.  A.  (N.  S.)  381. 

13  Purchaser  of  stock  is  not  affected  with  notice  of  a  prior  option  to 

purchase,  though  received  before  making  actual  payment  of  the 
price,  where  the  contract  entered  into  by  him  for  its  purchase 
created  an  absolute  obligation  on  his  part  to  take  and  pay  for  the 
stock,  Ouderkirk  v.  Bayless  P.  &  P.  Co.,  199  N.  Y.  366,  92  N.  E.  798; 
see  Storms  v.  Mundy,  46  Tex.  Civ.  App.  88,  101  S.  W.  258;  Donal- 
son  V.  Thomason,  137  Ga.  848,  74  S.  E.  762. 

1  Cummins  v.  Beavers,  103  W.  Va.  230,  48  S.  E.  891,  106  A.  S.  R.  881, 
1  Ann.  Cas.  986. 


227  PROPERTY — JUNIOR  AND  SENIOR  OPTIONS  §  516 

the  prior  option  be  exercised  according  to  its  terms, 
so  that  a  purchase  by  the  holder  of  the  prior  option 
at  a  price  less  than  contracted  for  did  not  deprive 
the  holder  of  the  junior  option  of  his  right  to  a 
conveyance.^ 

Where  plaintiffs  (optionors)  entered  into  an 
agreement  with  defendants  for  the  sale  to  the  latter 
of  a  half  interest  of  plaintiffs  in  their  option  on 
land  containing  deposits  of  marble,  the  land  to  be 
prospected  and  developed  for  the  joint  interests  of 
the  parties,  and  plaintiffs  failed  to  comply  with  the 
conditions  of  their  option,  and  thereafter  one  of 
the  defendants  obtained  an  option  in  his  own  name 
on  the  land,  on  different  terms,  and  at  a  higher 
price,  the  agreement  did  not  create  a  trust  in  the 
land  in  favor  of  plaintiffs  which  could  be  enforced 
after  the  purchase  by  one  of  the  defendants  under 
his  option.^ 

Where  the  optionee  for  seven  years  took  no 
steps  to  complete  the  title,  and  the  optionor  retained 
possession,  and  paid  taxes,  claimed  title,  and  gave 
an  option  to  another,  the  question  of  abandonment 
of  the  first  option  is  for  the  jury."* 

An  assignee  of  a  second  option  without  notice  of 
a  prior  option,  takes  his  option  discharged  of  the 
prior  option.^ 

2  Faraday  Coal  Co.  v.  Owens,  26  Ky.  L.  Eep.  243,  80  S.  W.  1171. 

SBeulah  Marble  Co.  v.  Mattice,  22  Colo.  547,  45  P.  432;  see  also 
Gaines  v.  Chew,  167  Fed.  630 ;  Commercial  Bank  v.  Weldon,  148  Cal. 
601,  84  P.  171;  Tennille  v.  Howden,  177  Fed.  631,  101  C.  C.  A.  257, 
agreement  between  optionee  and  others  to  finance  option  and  divide 
profits,  etc. 

4  Cambria  Iron  Co.  v.  Leidy,  226  Pa.  122,  75  Atl.  186. 

6  Winslow  V.  WiUiams  Eichards  Co.,  3  N.  Brunsw.  Eq.  481. 


§  516  LAW  OP  OPTION  CONTRACTS  228 

The  owner  of  land  heavily  incumbered  gave  an 
option  to  convey  it  to  complainant,  on  her  accep- 
tance, at  any  time  within  one  year,  agreeing  to 
deliver  a  deed  with  full  covenants  of  warranty,  but, 
believing  he  would  be  unable  to  discharge  the 
incumbrances,  he  executed  another  option  to  defen- 
dant on  a  larger  tract,  including  the  land  first  sold, 
which  defendant  accepted,  and  received  a  convey- 
ance, with  notice  of  plaintiff's  option.  At  the  time 
of  the  conveyance  the  purchase  money  was  dis- 
tributed among  the  incumbrancers,  and  releases 
executed  by  them,  all  of  which  were  in  terms  made 
to  the  original  owner  of  the  land,  defendant  refus- 
ing to  pay  the  purchase  price,  except  as  it  might  be 
applied,  in  his  presence,  to  secure  the  releases,  and 
it  was  held  that  such  payment  and  application  of 
the  purchase  price  discharged  the  incumbrances, 
and  merged  the  same  in  the  title  to  the  property 
conveyed  by  the  owner  to  defendant,  and  hence  he 
was  not  entitled  to  claim  subrogation  to  the  original 
rights  of  the  incumbrancers  on  being  compelled  to 
specifically  perform  the  option  given  by  the  owner 
to  complainant.^ 

A  party  having  an  option  to  purchase  the  timber 
growing  upon  a  tract  of  land,  which  is  not  limited 
as  to  time  by  his  agreement,  may,  by  his  own  acts 
and  by  acquiescence  in  the  acts  of  another,  in  cut- 
ting and  removing  such  timber,  and  by  assisting  in 
the  removal  of  the  same,  pointing  out  the  timber 
to  the  men  engaged  in  cutting  it,  and  raising  no 
objection  to  the  disposal  of  such  timber  by  the  party 

6  Brooks  ▼.  Wentz,  61  N.  J.  Eq.  474,  49  Atl.  147. 


229  PROPERTY — EQUITABLE  CONVERSION         §  517 

asserting  an  adverse  claim  thereto,  estop  himself 
from  asserting  any  claim  under  his  option/ 


Sec.  517.  EQUITABLE  CONVERSION.— The 
rule  of  equitable  conversion  applies  to  option  con- 
tracts for  the  purchase  of  real  estate  under  an 
option  contract  which  in  certain  cases  and  in 
accordance  with  some  decisions  is  considered  as 
personal  property. 

In  the  ordinary  case  of  a  contract  for  the  sale 
of  land,  equity  looks  on  that  agreed  to  be  done  as 
actually  done  and  considers  the  vendee  the  equi- 
table owner  of  the  land  and  the  interest  of  the 
vendor  as  personalty.^ 

This  is  in  accord  with  the  general  rule  that  a  con- 
version takes  place  upon  the  execution  and  deliv- 
ery of  the  contract  of  sale,  that  is,  when  the 
contract  becomes  operative.  The  general  rule,  how- 
ever, is  subject  to  the  qualification  that  the  inten- 
tion of  the  parties,  as  gathered  from  the  terms  of 
the  particular  instrument,  controls  as  to  the  time 
the  conversion  is  to  take  place.^ 

An  option  is  not  a  sale  and  purchase,  nor  an 
agreement  of  sale  and  purchase.  The  option  does 
not  itself  transfer  any  interest  in  the  property.  It 
is  merely  the  sale,  for  a  certain  time,  of  the  exclu- 

7  Hanley  v.  Watterson,  39  W.  Va.  214,  19  S.  E.  536. 

Verbal  agreement  that  option  should  be  for  benefit  of  all  parties  is 
without  consideration,  Beulah  Marble  Co.  v.  Mattice,  22  Colo.  547, 
45  P.  432. 

1  Fetter  on  Equity,  p.  69. 

2  See  Smith  v.  Loeweustein,  50  Ohio  St.  346,  34  N.  E.  159. 


§  517  LAW  OF  OPTION   CONTRACTS  230 

sive  right  or  privilege  of  purchasing  property.* 
It  would  seem,  therefore,  that,  in  the  absence  of 
an  expressed  intention  in  the  option  to  the  con- 
trary, a  conversion  takes  place  when  the  option  is 
exercised,  that  is,  when  the  agreement  of  sale  and 
purchase  comes  into  existence  by  election  to  pur- 
chase, and  not  when  the  option  contract  is  executed 
and  delivered,  otherwise  the  conversion  is  made  to 
depend  upon  a  contingency  and  the  status  of  the 
property  is  suspended,  so  to  speak,  until  the  contin- 
gency shall  happen  or  the  option  expire,  a  rule,  it 
would  seem,  at  variance  with  the  one  upon  which 
the  doctrine  of  equitable  conversion  is  founded  for, 
by  the  latter  rule,  the  status  of  the  property  is 
presently  and  absolutely  fixed.  ^ 

The  question  arises  when  the  option  is  exercised 
after  the  death  of  the  optionor.  In  such  case,  does 
the  purchase  money  go  to  the  heirs  of  the  optionor 
or  to  his  personal  representative  ?  The  English  rule 
is  that  the  conversion,  by  relation,  is  as  of  the  date 
of  the  execution  and  delivery  of  the  option,^  and 

3  See  Patterson  v.  Farmington  St.  Ry.  Co.,  76  Conn.  628,  57  Atl.  853. 

Dickinson  v.  Dodds,  L.  R.,  2  Ch.  Div.  463,  34  L.  T.  (N.  S.)  607. 

4  See  Rockland-Rockport  Lime  Co.  v.  Leary,  203  N.  Y.  469,  97  N.  E.  43, 

Ann.  Gas.  1913B,  62,  where  the  court  likens  the  option  privilege  to 
a  discretionary  power  of  sale  in  a  will  under  which  a  conversion  is 
not  worked  in  the  absence  of  an  actual  sale. 

sLawes  v.  Bennett,  1  Cox  167,  29  Eng.  Reprint  1111,  holding  that  where 
lessor  dies  leaving  will  devising  his  real  estate  to  D  and  his  per- 
sonal property  to  E  and  D  the  lessee  (optionee)  timely  exercised 
option  to  purchase  but  after  death  of  lessor,  purchase  money  was 
part  of  personal  estate  of  lessor. 
This  rule,  however,  is  not  to  be  extended.  Consequently  where  the 
leased  premises  under  the  option  burned  and  the  lessee  (optionee) 
exercised  his  option  to  purchase,  he  is  not  entitled  to  the  insurance 
money  as  part  of  his  purchase;  in  other  words,  the  election  did  not, 
by  relation,  take  effect  as  of  the  date  of  the  option  contract,  as  held 


231  PROPERTY — EQUITABLE  CONVERSION         §  517 

some  of  the  American  courts  have  followed  that 
rule.^  Other  American  decisions  hold  the  conver- 
sion takes  place  when  the  option  is  exercised  and 
that,  consequently,  the  purchase  money  will  go  to 
the  heirs  of  the  optionor  and  not  to  his  personal 
representative/ 

in  Lawes  v.  Bennett ;  Edwards  v.  West,  7  Oh.  Div.  858,  47  L.  J.  Ch, 
463,  38  L.  T.  Eep.  (N.  S.)  481,  26  Wkly.  Eep.  507. 
6  In  Reynard  v.  Arnold,  L.  E.,  10  Ch.  386,  23  Wkly.  Rep.  804,  under  the 
facts  there  appearing,  it  was  held  the  landlord  was  not  entitled  to 
retain  the  insurance  under  his  policy,  or  to  insist  that  the  insurance 
moneys  under  the  optionee's  policy  should  be  applied  in  restoring 
the  burned  property,  the  optionee  having  elected. 

As  to  right  of  insurance  moneys,  see  Sec.  512. 

Townley  v.  Bedwell,  14  Ves.  Jr.  591,  33  Eng.  Reprint  648,  rent  money 
belongs  to  heir;  purchase  money  to  personal  representative. 

Weeding  v.  Weeding,  1  Johns.  &  H.  424,  4  L.  H.  616,  70  Eng.  Reprint 
812,  the  option  itself  goes  to  residuary  legatee. 

See  also.  In  re  Adams,  27  Ch.  Div.  394,  54  L.  J.  Ch.  87,  51  L.  T,  Rep. 
(N.  S.)  382,  32  Wkly.  Rep.  883. 

Collingwood  v.  Row,  3  Jur.  (N.  S.)  785,  5  Wkly.  Rep.  484,  following 
Lawes  v.  Bennett,  supra. 

In  Graves  v.  Graves,  15  Ir.  Ch.  357,  the  court  distinguishes  Lawes  v. 
Bennett  by  saying  that  in  the  latter  case  the  option  was  to  be 
exercised  within  six  years  ' '  which  is  very  different  from  an  option 
to  be  exercised  at  the  end  of  any  number  of  centuries. ' '  As  further 
distinguishing  the  Lawes  case,  see  Emuss  v.  Smith,  2  DeG.  &  S.  722, 
64  Eng.  Reprint  323. 

6  See  Kerr  v.  Day,  14  Pa.  112,  53  Am.  Dec.  526,  extended  discussion  of 

rule;  rule  applied  as  against  purchaser  with  notice;  Buckwalter  v. 
Klein,  5  Ohio  Dec.  55;  Griffith  v.  Stewart,  (D.  C.)  31  App.  Cas.  29; 
Newport  Waterworks  v.  Sisson,  18  R.  I.  411,  28  Atl.  336.  land 
specifically  devised;  purchase  price  belongs  to  residuary  legatee; 
see  Keep  v.  Miller,  42  N.  J.  Eq.  100,  6  Atl.  495 ;  McKay  v.  Carring- 
ton,  Fed.  Cas.  No.  8,  841,  (1  McLean  50). 

7  See  Williams  v.  Lilley,  67  Conn.  50,  34  Atl.  765,  37  L.  R.  A.  150;  Kerr 

V.  Day,  supra;  Rockland  etc.  Co.  v.  Leary,  203  N.  Y.  469,  97  N.  E.  43, 
Ann.  Cas.  1913B,  62. 
Smith  v.  Loewenstein,  50  Ohio  St.  346,  34  N.  E.  159,  161.  These 
decisions  review  the  English  decisions  cited  in  note  5,  supra,  and 
reach  the  conclusion  that  Lawes  v.  Bennett  and  the  other  decisions 
following  it  are  unsound.    On  principle,  it  would  seem  that  the  exer- 


§  518  LAW  OF  OPTION  CONTRACTS  232 

Sec.  518.  DIVIDENDS  ON  CORPORATE 
STOCK. — Where  the  owner  of  corporate  stock 
gave  an  option  agreeing  to  sell  it  to  defendant,  or 
to  a  corporation  he  might  incorporate,  and  at 
defendant's  request  delivered  it  to  a  corporation, 
a  dividend  declared  after  the  option  was  given,  but 
before  the  sale  was  consummated,  belongs  to  the 
original  owner,  and  not  to  defendant,  notwithstand- 
ing a  transfer  of  the  stock  by  the  corporation  to 
defendant  by  endorsement  dated  back,  at  defen- 
dant's direction,  to  a  day  prior  to  the  declaration 
of  the  dividend.^ 

The  optionee  is  entitled  to  dividends  declared  on 
the  optioned  stock,  after  the  exercise  of  the  option 
to  purchase,  where  the  representative  of  the 
deceased  optionor  refused  to  join  in  the  appoint- 
ment of  arbitrators  to  ascertain  the  book  value  of 

cise  of  the  option,  being  entirely  within  the  discretion  of  the 
optionee,  it  must  be  held  that  the  conversion  takes  place,  in  the 
absence  of  a  contrary  intention  appearing  from  the  option,  at  the 
time  of  election,  for  it  is  then  that  the  sale  is  made,  and  in  analogy 
to  sales  and  agreements,  it  is  then  that  the  conversion  takes  place, 
otherwise  in  cases  of  long  term  leases  with  option  to  purchase,  it 
might  be  impossible  to  ascertain  the  personal  representative  of  the 
lessor-optionor,  or  the  distribution  of  the  price. 
7  See  Adams  v,  Peabody  Coal  Co.,  230  El.  469,  82  N.  E,  645,  purchase 
money  passed  as  real  estate  under  will. 

Caldwell  v.  Frazier,  65  Kan.  24,  68  P.  1076,  takes  effect  from  date  of 
election  and  not  from  date  of  offer,  involving  destruction  of  build- 
ings by  fire  before  election. 

The  option  upon  death  of  the  optionee  passes  as  personal  property, 
Gustin  V.  School  District,  94  Mich.  502,  54  N.  W.  156,  34  A.  S.  R. 
361 ;  McCormick  v.  Stephany,  57  N.  J.  Eq.  257,  41  Atl.  840. 

As  to  homestead  filed  by  wife  after  grant  of  option  by  husband  and 
before  exercise  of  option.  Smith  v.  Bangham,  156  Cal.  359,  104  P. 
689,  28  L.  R.  A.  (N.  S.)  522. 

1  Rowe  V.  White,  189  N.  Y.  523,  82  N.  E.  1132,  affirming  s.  c.  112  App. 
Div.  688,  98  N.  Y.  S.  729. 


233  PROPERTY — DIVIDENDS — RENTS  §  519 

the  shares  in  accordance  with  the  provisions  of  the 
option  agreement.^ 

A  seller  of  stock  agreed  to  pay  10%  for  ten  years 
on  the  amount  of  stock  transferred,  if  such  amount 
was  not  paid  in  dividends,  by  the  corporation,  but 
reserved  the  rigiit  to  repurchase  the  stock  at  a  price 
agreed  on,  at  the  end  of  five  years.  The  company 
issuing  the  stock  stopped  operations  in  about  a 
year,  without  ever  having  declared  a  dividend,  and 
the  buyer  brought  suit  for  the  dividends  for  ten 
years,  and  it  was  held  the  buyer  could  recover  of 
the  seller  only  the  dividends  actually  due.^ 

Sec.  519.  RENTS.— The  general  rule  is  that 
upon  timely  and  proper  election  under  a  lease  con- 
taining an  option  to  purchase,  the  relation  of  land- 
lord and  tenant  ceases  and  that  of  vendor  and 
purchaser  arises  and,  consequently,  the  right  of  the 
landlord  to  rent  maturing  thereafter,  is  lost.^ 

An  election  without  pajTnent,  or  delay  in  pay- 
ment where  pajrment  is  due  at  the  time  of  election, 

2  In  re  Lindsay's  Estate,  210  Pa.  224,  59  Atl.  1074,  and  the  optionor  is 

entitled  to  interest  on  the  price  from  time  of  election.  This  was  an 
agreement  between  stockholders  giving  to  survivors  an  option  to 
purchase  the  shares  of  any  deceased  stockholder. 
Case  of  purchaser  of  stock  from  corporation  with  agreement  to  repur- 
chase, where  purchaser  receives  the  dividends  and  does  not  offer  to 
return  same  or  stock  dividend  received  by  him,  in  suit  to  recover  the 
price  where  court  holds  that  though  it  is  one  at  law,  yet  decides  it 
in  accordance  with  equitable  principles,  and  seemingly  denies  relief 
because  of  this  fact,  Wilson  v.  Torchon  L.  &  M.  Co.,  167  Mo.  App. 
305,  149  S.  W.  1156. 

3  Hawks  V.  Bright,  51  La.  Ann.  79,  24  So.  615. 

1  Wade  v.  South  Pa.  Oil  Co.,  45  W.  Va.  380,  32  S.  E.  169;  Knerr  v.  Brad- 
ley, 105  Pa.  190,  during  the  term  of  the  lease;  Perry  v.  Paschal,  103 
Ga.  134,  29  S.  E.  703,  and  tender  must  be  made ;  Gilbert  v.  Port,  28 
Ohio  St.  276;  Lee  v.  Cochran,  157  Ala.  311,  47  So.  581. 


§  519  LAW  OF  OPTION  CONTRACTS  234 

does  not  change  the  relation  of  the  parties  to  that 
of  vendor  and  purchaser  so  as  to  stop  the  liability 
of  the  lessee  to  pay  rent  after  the  expiration  of  the 
lease."  But,  under  a  statute  providing  for  prorat- 
ing of  the  rent  if  election  shall  take  place  during  a 
rental  period,  the  lessor  is  entitled  to  have  the  rent 
prorated  where  the  election  is  made  during  such 
period.^ 

The  lessee  will  not  be  required  to  pay  both  rent 
and  interest  and  taxes  f  nor,  to  pay  rents  or  profits 
where  the  optionor  resists  specific  performance,^ 
nor,  to  pay  rent  during  the  time  necessary  to  fix  the 
price  by  arbitration  and  for  the  consummation  of 
the  purchase  where  the  agreement  provides  for 
such  proceedings.^ 

A  contract  provided  for  the  lease  of  property  for 
two  years  at  a  rental  of  a  fixed  sum  payable  in  two 
installments ;  one  due  on  the  execution  of  the  lease, 
the  other  on  the  first  day  of  the  second  year  of  the 
lease.  The  lessee  had  the  option  to  purchase  the 
property  at  any  time  before  the  expiration  of  the 
lease,  on  stated  terms.  It  was  provided  that,  if  a 
sale  was  made  before  the  date  fixed  for  the  payment 
of  the  second  installment  of  rent,  that  installment 
should  not  be  paid.  The  lessee  exercised  the  option 
to  purchase  five  days  after  the  installment  was  due, 
and  a  deed  to  the  property  was  delivered  46  days 

2  Journe  v.  Hewes,  124  Gal.  244,  56  P.  1032. 

3  Withington  v.  Nichols,  187  Mass.  575,  73  N.  E.  855. 

4  Grummer  v.  Price,  101  Ark.  611,  143  S.  W.  95. 

6  Brewer  v.  Sowers,  118  Md.  681,  68  Atl.  228. 

6  Washburn  v.  White,  197  Mass.  540,  84  N.  E.  106;  nor  when  the 
optionor  is  not  able  to  convey  a  good  title,  Church  v.  Standard  etc. 
Co.,  65  N.  Y.  S.  116,  52  App.  Div.  407. 


235  PROPERTY — RENTS  §  520 

thereafter.  In  the  negotiations  of  sale  nothing  was 
said  concerning  this  installment  of  rent,  and  no 
reference  to  it  was  made  in  the  deed.  No  demand 
for  it  was  made  until  long  after  the  deed  was  deliv- 
ered, and  suit  was  not  brought  until  more  than  a 
year  after  the  sale.  It  was  held,  plaintiff,  under 
the  contract,  was  entitled  to  recover  the  full  amount 
of  the  installment,  with  interest  from  the  date  it 
was  due,  and  was  not  estopped  from  claiming  pay- 
ment of  the  same."^ 

In  another  case,  the  lease  was  for  five  years  from 
October,  1905,  at  a  stipulated  rent,  evidenced  by 
five  notes  payable  October  first  of  each  year,  and 
provided  that  if  the  lessee,  at  any  time  during  the 
term,  paid  the  lessors  $1280  for  the  land,  the  lessors 
would  turn  over  the  lease  to  the  lessee  and  also  the 
unpaid  rent  notes  without  further  consideration. 
The  lessee,  having  paid  the  annual  rent  for  1905 
and  1906,  and  on  August  30,  1907,  having  given 
notice  of  his  election  to  purchase,  it  was  held  the 
lessee  was  entitled  to  a  conveyance  on  tender  of 
$1280  without  paying  the  stipulated  rent  which 
would  otherwise  have  matured  October  first  fol- 
lowing.* 

Sec.  520.  RIGHT  TO  COAL  MINED.  PROF- 
ITS MADE,  ETC.— Where  the  optionee,  under  a 
coal  lease,  gives  notice  of  election  to  purchase  the 
land,  but  the  purchase  price  was  not  paid  until 
several  months  thereafter  when  the  deed  was  deliv- 
ered, it  was  held  he  did  not  become  the  equitable 

7  Granger  v.  Riggs,  118  Ga.  164,  44  S.  E.  983. 

8  Lee  V.  Cochran,  157  Ala.  311,  47  So.  581. 


§  520  LAW  OF  OPTION  CONTRACTS  236 

owner  of  the  land  upon  the  exercise  of  his  option, 
but  only  upon  payment  of  the  purchase  money,  and 
that  consequently  the  optionor  was  entitled  to  the 
price  of  the  coal  mined  up  to  the  time  the  purchase 
money  was  paid/ 

Under  an  option  on  mining  property  with  the 
privilege  of  mining  ore  and  providing  that  the  net 
proceeds  should  be  applied  towards  the  purchase 
price,  the  cost  of  mining  the  ore  should  be  deducted 
in  ascertaining  the  net  proceeds.^ 

The  seller  of  a  business  reserving  an  option  to 
repurchase,  on  exercising  the  option,  is  not  entitled 
to  the  profits  of  the  business  during  the  manage- 
ment, by  the  optionee,  under  the  terms  of  the 
agreement.^ 

An  option  given  by  one  partner  to  another  to 
purchase  the  interest  of  the  former  at  a  certain 
sum,  the  optionee  to  assume  all  liabilities,  takes 
effect  by  election  as  of  the  date  of  the  agreement, 
so  that  the  optionee  is  not  entitled  to  deduct  from 
that  sum  any  debts  subsequently  paid  off,  notwith- 
standing there  had  been  an  extension  of  the  option 
time/ 

Where,  after  making  of  a  lease  with  option  to 
purchase,  the  authorities  of  the  city  in  which  the 
premises  were  situated  caused  the  street  in  front 
of  the  premises  to  be  paved,  the  lessee  upon  seeking 
specific  performance  of  the  option  to  purchase,  will 
be  required  to  reimburse  the  lessor  for  the  amount 

1  Flynn  v.  White  Breast  Coal  Co.,  72  Iowa  738,  32  N.  W.  471. 

2  Hall  V.  Abraham,  44  Ore.  477,  7.5  P.  882. 

3  Kerting  v.  Hatcher,  216  HI.  232,  74  N.  E.  783. 

4  Eggleston  v.  Wagner,  46  Mich.  610,  10  N.  W.  37. 


237  PROPERTY — PROFITS  FROM  §  520 

already  paid  by  him  for  the  paving  and  to  assume 
payment  of  the  balance  as  a  condition  of  granting 
specific  performance.^ 

Where  the  optionor  grants  an  option  on  timber 
lands  and,  during  the  option  time,  cuts  timber 
therefrom,  whereupon  the  optionee  gives  notice  of 
election  to  purchase,  the  optionee  is  entitled  to  an 
allowance  on  the  price  for  the  value  of  the  timber 
cut  by  the  optionor.® 

5  King  V.  Eaab,  123  Iowa  632,  99  N.  W.  306. 

Water  rates,  right  to,  on  exercise  by  city  of  option  to  purchase  water 
plant,  City  of  Los  Angeles  v.  Los  Angeles  City  Water  Co.,  124  CaL 
368,  57  P.  210. 

6  McCowen  v.  Pew,  147  Cal.  299,  81  P.  958. 


CHAPTEE  VI. 

ASSIGNMENT 

Sec.  601.  Common  law  and  equity  rules. 

Sec.  602.  Assignability  before  election. 

Sec.  603.  Assignability  after  election. 

Sec.  604.  Option  personal  to  optionee. 

Sec.  605.  Express  words  of  assignability. 

See.  606.  Death  or  insanity. 

Sec.  607.  Leases  containing  options.  Covenants  running  with  land. 

Sec.  608.  Estoppel  and  waiver. 

Sec.  609.  Effect  of  assignment.  Rights  and  liabilities  of  parties. 

Sec.  610.  Miscellaneous  cases. 

(239) 


§  601  LAW  OP  OPTION  CONTRACTS  240 

Section  601.  COMMON  LAW  AND  EQUITY 
RULES. — At  common  law  the  general  rule  is  that 
rights  arising  out  of  a  contract  can  not  be  assigned. 
By  the  Law  Merchant,  bills  of  exchange,  and  by 
the  statute,  jDromissory  notes,  are  made  exceptions 
to  the  general  rule.  It  would  seem  that  bonds  of 
corporations  are  also  an  exception. 

The  rule  in  equity  is  that  a  chose  in  action,  or 
rights  under  a  contract,  may  be  assigned  whenever 
the  contract  is  not  one  for  exclusive  personal  ser- 
vices, and  does  not  involve  personal  credit,  trust  or 
confidence.  In  equity  the  assignee  may  sue  in  his 
own  name.  The  equitable  rule  of  assignment  was, 
however,  so  far  recognized  in  the  courts  of  law  as 
to  permit  the  assignee  to  sue  in  the  name  of  the 
assignor. 

The  equitable  rule  is  now  incorporated  into  the 
statutes  of  most,  if  not  all  of  the  states.  And  it 
may  be  stated  as  a  general  rule  that  the  rights  of 
the  optionee  are  now  assignable,^  in  accordance 
with  the  equitable  rule,  unless  limited  by  the  terms 

1  Simmons  v.  Zimmerman,  144  Cal.  256,  79  P.  451,  1  Ann.  Gas.  850 ; 
Kerr  v.  Day,  14  Pa.  112,  53  Am.  Dec.  526;  Myers  v.  J.  J.  Stone  & 
•  Son,  128  Iowa  10,  102  N.  W.  507,  111  A.  S.  R.  180,  5  Ann.  Cas.  912 ; 
Napier  v.  Darlington,  70  Pa.  64,  option  in  lease;  Union  Coll.  Co.  v. 
Oliver,  23  Cal.  App.  318,  137  P.  1082,  option  to  return  shares  of 
stock  and  guaranteeing  repayment  of  price;  Mitchell  v.  Taylor,  27 
Ore.  377,  41  P.  119,  option  to  repurchase  stock. 

Option  on  water  right  may  be  assigned,  Thompson  Co.  v.  Pennebaker, 
173  Fed.  849,  97  C.  C.  A.  591. 

Owner  of  equitable  interest  can  not  exercise  the  option,  see  Sec.  802. 

Cause  of  action  for  deceit  based  on  misrepresentation  made  by  the 
optionor  to  optionee  does  not  pass  to  assignee  of  option  to  whom 
misrepresentations  were  not  made,  Puffer  v.  Welch,  144  Wis.  506, 
129  N.  W.  525,  Ann.  Cas.  1912A,  1120. 


241  ASSIGNMENT— BEFORE  ELECTION  §  602 

of  the  option  contract  ;^  but  even  where  so  limited, 
the  optionor  may  waive  the  limitation,  as  by 
receiving  part  pajTnent  from  the  assignee  of  the 
optionee.^ 

Sec.  602.  ASSIGNABILITY  BEFORE  ELEC- 
TION.— A  mere  offer  of  a  contract  is  not  assign- 
able, and  for  the  very  plain  reason  that  no  right 
in  favor  of  either  party  arises  until  the  offer  has 
been  accepted.  It  follows,  therefore,  that  an 
optionee  under  an  option  without  consideration  to 
support  it,  has  no  right  prior  to  acceptance  which 
he  can  assign.^  If,  however,  the  option  is  supported 
by  a  consideration,  and,  therefore,  irrevocable  dur- 
ing the  time  limit,  it  would  seem  that,  in  those 
jurisdictions  where  the  rule  in  equity  is  followed, 
the  optionee  has  an  assignable  right  prior  to  accep- 
tance and  during  the  time  limit,^  unless  it  appears 

2  Myers  v.  J.  J.  Stone  &  Son,  supra. 

3  Taylor  v.  Newton,  152  Ala.  459,  44  So.  583. 

iMeynell  v.  Surtees,  3  Sm.  &  Giff.  101,  65  Eng.  Reprint  581,  1  Jur. 
(N.  S.)  737,  25  L.  J.  Ch.  257,  3  Wkly.  Rep.  535;  see  Perkins  v. 
Hadsell,  50  Bl.  216;  Dyer  v.  Duffy,  39  W.  Va.  148,  19  S.  E.  540, 
543,  24  L,  R.  A.  339;  Sims  v.  Cordele  Ice  Co.,  119  Ga.  597,  46  S.  E. 
841;  Fulton  v.  Messenger,  61  W.  Va.  477,  56  S.  E.  830;  Wheeling 
Creek  etc.  Co.  v.  Elder,  170  Fed.  215;  Sweezy  v.  Jones,  65  Iowa  272, 
21  N.  W.  603 ;  Crandall  v.  WilUg,  166  HI.  233,  46  N.  E.  755. 

2  Connor  v.  Withers,  20  Ky.  L.  Rep.  1326,  49  S.  W.  309;  Krhut  v. 
Phares,  80  Kan.  515,  103  P.  117;  Winslow  v.  Dundom,  46  Mont.  71, 
125  P.  136 ;  Kreutzer  v.  Lynch,  122  Wis.  474,  100  N.  W.  887,  889 ; 
Kerr  v.  Day,  14  Pa.  112,  53  Am.  Dec.  526;  Jackson  v.  Groat,  7  Cow. 
(N.  Y.)  285;  Hall  v.  Center,  40  Cal.  63;  Sims  v.  Lide,  94  Ga.  553, 
21  S.  E.  220;  Perry  v.  Paschal,  103  Ga.  134,  29  S.  E.  703;  House  v. 
Jackson,  24  Ore.  89,  32  P.  1027,  see  Sec.  503,  note  1;  Chesbrough  v. 
Vizard  Inv.  Co.,  156  Ky.  149,  160  S.  W.  725;  Strasser  v.  Steck,  216 
Pa.  577,  66  Atl.  87,  88;  Xapier  v.  Darlington,  70  Pa.  64;  Cameron  v. 
Shumway,  149  Mich.  634,  113  X.  W.  287. 
16 — Option  Contracts. 


§  603  LAW  OP  OPTION  CONTRACTS  242 

from  the  terms  of  the  option  that  it  was  intended 
as  an  exclusive  personal  privilege  to  the  optionee, 
or  where,  in  particular  cases,  the  option  was  given 
because  of  some  personal  confidence  reposed  in  the 
optionee  touching  the  transaction,  or  because  of 
some  personal  service  to  be  rendered  by  him,  or 
where  payment  of  the  price  is  deferred  and  the 
credit  is  extended  to  the  optionee  personally.^ 

It  should  be  noted  that  the  assignment  of  the 
option,  prior  to  election,  does  not  convey  an  interest 
or  estate  in  the  property;  it  merely  transfers  the 
right  to  exercise  the  option,*  and,  consequently,  an 
assignment  of  the  option  by  the  optionee  prior  to 
his  election  to  purchase,  does  not  require  the  join- 
der of  his  wife  as  she  has  no  dower  right  therein.^ 

Sec.  603.  ASSIGNABILITY  AFTER  ELEC- 
TION.— An  option  which  has  been  timely  elected 

2  The  right  of  electing  to  purchase   oil,  is   property   capable   of   being 

assigned,  Tyler  v.  Barrows,  6  Eob.  (N.  Y.)  104,  29  N.  Y.  Sup.  Ct.  104. 
The   optionee  may  lawfully  sell  the   optioned   land  to  a   third   party 
before  election,  Eoper  v.  Milbourn,  93  Neb.  809,  142  N.  W.  792,  Ann. 
Gas.  1914B,  1225 ;  Krhut  v.  Phares,  supra. 

3  Dyer  v.  Duffy,  supra;  Sims  v.  Cordele  Ice  Co.,  supra;  Winslow  v.  Dun- 

dom,  supra. 

Eease  v.  Kittle,  56  W.  Va.  269,  49  S.  E.  150,  fails  to  distinguish 
between  a  pure  offer  and  an  option  supported  by  a  consideration  and 
holds  that  when  the  offer  is  made  to  a  particular  person  and  not  to 
"assigns"  it  can  be  accepted  by  such  person  alone,  and  not  by  his 
assignee. 

Sutherland  v.  Parkins,  75  HI.  338,  holding  right  of  election  does  not 
pass  to  heir  of  optionee  who  dies  without  electing,  but  this  was 
placed  on  the  ground  that  the  heirs  could  not  take  money  from  the 
personal  estate  and  exercise  a  right  which  the  ancestor  might  not 
have  exercised. 

4  Dyer  v.  Duffy,  supra. 

6  Fletcher  v.  Painter,  81  ICan.  195,  105  P.  500. 


243  ASSIGNMENT — ^PERSONAL  OPTION  §  604 

is  converted  into  an  agreement  to  sell.  The  optionee, 
by  exercise  of  the  option,  becomes  a  vendee  and  is 
thus  clothed  with  all  of  the  rights  of  the  vendee  as 
distinguished  from  an  optionee,  including  the  right 
to  assign,  in  accordance  with  the  rule  apj^licable  to 
agreements  of  sale.^ 

Sec.  604.  OPTION  PERSONAL  TO  OP- 
TIONEE.— Of  course,  if  the  option  expressly 
provides  that  it  may  be  exercised  by  the  optionee 
but  "by  no  other  person"  the  optionee  has  no 
assignable  rights  thereunder,^  and  the  same  rule 
obtains  when,  by  the  terms  of  the  option,  the  con- 
sent of  the  optionor  is  necessary  to  make  the  assign- 
ment valid.  ^ 

1  See  decision  note  2,  Sec.  602,  supra;  Perkins  v.  Hadsell,  50  Dl.  216; 
Perry  v.  Paschal,  103  Ga.  134,  29  S.  E.  703 ;  Kreutzer  v.  Lynch,  122 
Wis.  474,  100  N.  W.  887,  889;  Robinson  v.  Perry,  21  Ga.  183,  68 
Am.  Dec.  455,  lease. 
Eight  of  assignee  to  recover  account  against  third  person  purchased 
under  option  contract,  where  optionee  defaulted,  Frye-Bruhn  Co.  v. 
McGowan,  38  Wash.  536,  80  P.  761. 

1  Myers  v.  Stone,  128  Iowa  10,  102  N.  W.  507,  111  A.  S.  E.  180,  5  Ann. 

Gas.  912,  the  court  holds  the  right  to  discriminate  between  pur- 
chasers is  one  of  the  attributes  of  private  ownership  of  property,  and 
inheres  in  the  right  of  freedom  to  contract,  but  that  an  ' '  unrestricted 
option  is  assignable. ' ' 
Eease  v.  Kittle,  56  W.  Va.  269,  49  S.  E.  150,  holds,  in  effect,  that  an 
option  privilege  is  personal  to  optionee,  unless  it  has  words  of  assign- 
ability, following  the  rule  of  "offers." 

2  Smith  V,  Jones,  21  Utah  270,  60  P.  1104;  Andrew  v.  Meyerdirck,  87 

Md.  511,  40  Atl.  173;  Behrens  v.  Cloudy,  50  Wash.  400,  97  P.  450. 
Stipulation  against  assigning  lease  includes  option  therein,  Behrens  v. 

Cloudy,  supra. 
An  agreement  to  sell  is  not  an  assignment,  Ackerman  v.  Maddiix,  26 

N.  D.  50,  143  N.  W.  147. 
Eestriction  does  not  apply  to  assignment  by  operation  of  law,  In  re 

Benz,  221  Fed.  123. 


§  604  LAW  OF  OPTION  CONTRACTS  244 

It  seems  tliat  where,  by  the  terms  of  the  option, 
the  price  is  all  payable  in  cash,  no  question  of 
personal  confidence  or  credit  on  the  part  of  the 
optionee  can  arise,^  but  where  a  credit  on  the  price 
is  given  by  the  option,  the  assignee  may  not  substi- 
tute his  credit,  or  his  note  or  obligation,  in  lieu  of 
the  optionee's,*  unless  the  option  runs  to  the 
optionee  and  ''his  assigns."^ 

The  point  in  this  and  other  like  decisions  is  not 
directly  that  the  optionee  has  no  assignable  rights 
but  rather  that  by  his  assignment  the  optionee  may 
not,  in  the  absence  of  words  of  assignability,  substi- 
tute the  credit  of  some  other  person.  If,  for 
instance,  the  assignee,  upon  acceptance,  tenders  the 
note  of  original  optionee,  in  accordance  with  the 
terms  of  the  option,  the  rule  would  not  apply.  It 
was  so  held  in  a  case  where  an  option  ran  to  B  and 
C,  the  price  being  payable  partly  in  cash  and  the 
balance  secured  by  the  note  and  mortgage  of  B  and 
C.  B  assigned  to  C  and  C  timely  tendered  the  joint 
note  and  mortgage  of  himself  and  B.   The  tender 

3  Winslow  V.  Dundom,  46  Mont.  71,  125  P.  136. 

4  Menger  v.  Ward,  87  Tex.  622,  30  S.  W.  853 ;  Eice  v.  Gibbs,  40  Neb. 

264,  58  N.  W.  724,  overruling  s.  c.  33  Neb.  460,  50  N.  W.  436,  the 
tender  by  the  assignee  was  held  insufficient;  see  Pearson  v.  Millard, 
150  N.  C.  303,  63  S.  E.  1053;  Sims  v.  Cordele  Ice  Co.,  119  Ga.  597, 
46  S.  E.  841,  distinguishing  Sims  v.  Lide,  94  Ga.  553,  21  S.  E.  220, 
and  Perry  v.  Paschal,  103  Ga.  134,  29  S.  E.  703,  on  the  ground  that 
the  price  was  payable  in  cash;  Macon  Auto.  Co.  v.  Heard,  142  Ga. 
264,  82  S.  E.  658. 
Optionee  may  not  substitute  third  person  as  purchaser,  Vanderlip  v. 
Peterson,  16  Manitoba  341. 

6  Abel  V.  Gill,  95  Neb.  279,  145  N.  W.  637,  distinguishing  Eice  v.  Gibbs, 
supra. 


245  ASSIGNMENT — PERSONAL  OPTION  §  604 

was  held  to  be  sufficient  and  specific  performance 
was  allowed.® 

A  contract  whereby  the  owner  of  land  gives  a 
lawyer  the  option  to  buy  it  at  a  certain  price,  in 
consideration  of  the  latter 's  taking  all  legal  steps 
to  perfect  the  title,  can  not  be  enforced  by  the 
assignee  of  the  lawyer  since,  as  the  Court  says,  an 
executory  contract  for  personal  services  requiring 
skill  is  not  assignable/ 

So,  a  contract  to  convey  to  a  person,  one  of  four 
pieces  of  land,  to  be  selected  by  him,  can  not  be 
assigned  to  another  person  so  as  to  give  the  latter 
the  right  to  make  the  selection.^  But  the  fact  that 
the  option  gave  the  optionee  the  right  to  erect  a 
dam,  the  location  and  height  of  which  were  to  fix 
one  of  the  lines  of  the  land,  did  not  render  the 
option  non-assignable  by  the  optionee.^ 

The  optionor  may  assign  the  option  and  the  prin- 
ciple of  personal  confidence  does  not  arise,  though 
the  option  calls  for  a  warranty  deed,  where  the 

6  Souffrain  v.  McDonald,  27  Ind.  269;  see  Rice  v.  Gibbs,  supra;  Pearson 

V.  Millard,  supra. 

7  Sloan  V.  Williams,  138  111.  43,  27  N.  E.  531,  2  L.  R.  A.  496;  rule  would 

be  otherwise  if  contract  had  been  performed  before  assignment. 
See  Wilks  v,  Georgia  Pac.  R.  Co.,  79  Ala.  180,  similar  option  held 

assignable. 
Contract  to  drill  for  commercial  substances  is  not  personal  and  may 

be  assigned,  Anse  La  Butte  Oil  Co.  v.  Babb,  122  La.  415,  47  So.  754. 
So  is  contract  to  raise  and  sell  grapes.  La  Rue  v.  Groezinger,  84  Cal. 

281,  24  P.  42,  18  A.  S.  R.  179. 

8  McQueen  v.  Chouteau's  Heirs,  20  Mo.  222,  64  Am.  Dec.  178,  the  right 

of  choice  held  strictly  personal. 
Right  in  optionee  to  judge  of  sufficiency  of  title  is  assignable,  Simmons 
V.  Zimmerman,  144  Cal.  256,  79  P.  451,  1  Ann.  Cas.  850. 

9Wilkins  V.  Hardaway,  159  Ala.  565,  48  So.  678. 


§  605  LAW  OP  OPTION  CONTRACTS  246 

warranty  of  tlie  optionor  appears  in  the  chain  of 
title.^^ 


Sec.  605.  EXPRESS  WORDS  OF  ASSIGNA- 
BILITY.— In  nearly  all  jurisdictions  the  rights  of 
the  optionee,  under  an  option  supported  by  a 
consideration,  are  assignable  in  the  absence  of  any 
words  of  assignability,  except,  of  course,  where  the 
nature,  or  the  terms,  of  the  option  bring  it  within 
some  recognized  exception  to  the  rule,  for  it  is  said 
*' assignability  is  now  the  rule;  non-assignability 
the  exception."^ 

Express  words  of  assignability,  therefore,  are 
now  important,  if  at  all,  as  they  may  affect  an 
option  contract  which  would  otherwise  be  an  excep- 
tion to  the  rule,  or  covenants  running  with  the 
land.^ 

It  would  seem  that  the  effect  of  their  use  is 
limited  to  those  jurisdictions  which  still  follow  the 
old  common  law  rule  and,  also,  in  some  cases,  as 
bearing  upon  the  interpretation  of  the  contract  as 
falling  within  or  without  the  exceptions  to  the  gen- 
eral rule.^ 

The  authorities,  however,  concur  in  the  general 
rule  that  an  option  made  to  a  person  named  therein 
and  to  "his  heirs  and  assigns"  is  assignable.'* 

10  Big  Ben  L.  Go.  v.  Hutchings,  71  Wash.  345,  128  P.  652. 

1  Simmons  v.  Zimmerman,   144  Cal.   256,  79   P.  451,   1   Ann.   Gas.   850; 

Connor  v.  Withers,  20  Ky,  L.  Eep.  1326,  49  S.  W.  309. 

2  Anse  La  Butte  Oil  Go.  v.  Babb,  122  La.  415,  47  So.  754;  see  Sec.  607. 

3  Fulton  V.  Messenger,  61  W.  Va.  477,  56  S.  E.  830. 

4Landon  v.  Morehead,  34  Okl.  701,  126  P.  1027;  Adams  v.  Peabody 
Coal  Co.,  230  Dl.  469,  82  N.  E.  645;  Fulton  v.  Messenger,  61  W.  Va. 
477,  56  S.  E.  830,  where  supported  by  a  consideration;  Hollander  v. 


247  ASSIGNMENT — SURVIVORSHIP  §  606 

An  option  to  sell  given  to  a  person  ''his  heirs 
and  assigns'^  is,  in  accordance  with  the  general 
rule,  assignable  by  him  but  is  not  assignable  by  the 
assignee  where  the  assignment  does  not  run  to  him 
and  to  his  heirs  and  assigns.^ 

An  option,  not  assignable  in  terms,  given  to  one 
who  represents  himself  to  be  the  agent  and  acting 
for  a  party  known  to  the  owner  and  to  whom  the 
owner  desires  to  sell,  is  not  assignable.  This  was 
put  on  the  ground  that  the  optionee  was  a  promoter 
and  that  the  optionor  was  looking  to  the  solvency 
and  responsibility  of  the  other  party.  The  facts 
show,  however,  that  the  optionor  withdrew  the 
option  before  acceptance  and,  there  being  no  con- 
sideration, the  case  should  have  turned  on  that 
point.^ 

Sec.  606.  DEATH  OR  INSANITY.— As  to 
mere  offers,  the  death  or  insanity  of  either  party 
before  acceptance  causes  the  offer  to  lapse.  ^  Where, 
therefore,  an  ancestor  had  the  privilege  to  accept 
an  offer  of  sale  within  a  year  and  died  within  the 
year  without  accepting,  he  had  no  estate  which 
descended  to  his  heirs  and  they  had  not  the  right 
to  accept  the  same  within  the  time  allowed  their 

Central  Metal  etc.  Co.,  109  Md.  131,  71  Atl.  442,  23  L.  R.  A.  (N.  S.) 
1135;  Ankeny  v.  Richardson,  187  Fed.  550,  109  C.  C.  A.  316,  lease; 
Rease  v.  Kittle,  56  W.  Va.  269,  49  S.  E.  150. 

5  Wheeling  Creek  etc.  Co.  v.  Elder,  170  Fed.  215,  there  was  no  considera- 

tion for  this  option. 

Words  of  assignability  are  not  limited  to  the  first  assignment,  but 
include  every  purchaser  by  voluntary  sale  as  well  as  upon  execution, 
Jackson  v.  Groat,  7  Cow.  (N.  Y.)  285. 

6  Snow  V.  Nelson,  113  Fed.  353. 
1  See  Sec.  709. 


§  606  LAW  OF  OPTION  CONTRACTS  248 

ancestor,  the  offer  being  personal.  This  was  put  on 
the  ground  also  that  thereby  the  heir  would  be 
compelled  to  take  money  from  the  personal  estate 
in  order  to  purchase  for  himself  that  which 
his  ancestor  was  not  bound  to  purchase  and  per- 
haps would  not  have  purchased.^ 

An  option,  however,  stands  upon  the  same  foot- 
ing as  any  other  contract  right.  Thus,  an  option  in 
a  note  giving  the  maker  the  privilege  of  delivering 
certain  shares  of  stock  in  lieu  of  paying  the  prin- 
cipal in  money,  does  not  expire  upon  the  death  of 
*the  maker,  but  survives  to  his  estate,  and  the  execu- 
trix of  his  will  is  authorized,  under  the  laws  of 
California,  to  exercise  the  option  and  pay  the  note 
by  delivering  the  shares,  and  the  fact  that,  upon 
the  death  of  the  maker,  the  title  to  the  shares 
passed  at  once  to  his  legatees,  is  immaterial  since 
they  succeed  thereto  subject  to  the  right  of  the 
executrix  to  exercise  the  option  and  to  make  pay- 
ment of  the  note  therewith.^ 

If  the  option  is  not  personal,  clearly,  since  the 
option  does  not  vest  any  estate  in  the  land,  it  passes 

2  Sutherland  v.  Parkins,  75  HI.  338. 

The  same  conclusion  was  also  reached  in  Newton  v.  Newton,  11  R.  I. 

390,  23  Am.  Rep.  476;  see  also  Cousins  Re  Alexander  v.  Cross,  L.  R. 

30  Ch.  Div.  203. 
Mohn  V.  Mohn,   148  Iowa  288,   126   N.  W.   1127.    This   ease   did  not 

involve  a  strict  option  but  was  a  devise  under  a  will  subject  to  a 

charge. 
But  see  Adams  v.  Kensington  Vestry,  In  re,  54  L.  J.  Ch.  87,  27  Ch. 

Div.  394,  51  L.  T.  Rep.    (N.  S.)    382,  32  Wkly.  Rep.  883,  holding 

administrator  could  exercise  option  for  the  benefit  of  the  next  of  kin. 

8  Vance's  Estate,  In  re,  152  Cal.  760,  93  P.  1010;  see  Ankeny  v.  Rich- 
ardson, 187  Fed.  550,  109  C.  C.  A.  316;  Simmons  v.  Zimmerman,  144 
Cal.  256,  79  P.  451,  1  Ann.  Cas.  850;  Adams  v.  Peabody  Coal  Co., 
230  m.  469,  82  N.  E.  645. 


249  ASSIGNMENT — OPTIONS   IN   LEASES  §  607 

to  the  personal  representative  of  the  deceased 
optionee  as  personal  property.'' 

Land  leased  with  option  to  purchase,  upon  death 
of  the  lessor,  intestate,  passes  to  his  heirs  subject 
to  the  lease  and  option  and  to  the  dower  interest  of 
his  widow  who  did  not  sign,^  and  when  the  agree- 
ment expressly  bound  the  parties,  their  heirs,  etc., 
the  death  of  the  lessor  did  not  affect  the  right  to 
exercise  the  option.^ 

Sec.  607.  LEASES  CONTAINING  OPTIONS. 
COVENANTS   RUNNING  WITH   LAND.— A 

provision  in  a  lease  giving  the  lessee, ' '  his  heirs  and 
assigns,"  the  right  or  option  to  purchase  the  leased 
premises,  is  a  covenant  running  with  the  land  and 
passes  to  an  assignee  of  the  leasehold  term,^  and 
the  same  rule  obtains  with  reference  to  an  option  to 

4  Gustin  V.  School  District,  94  Mich.  502,  54  N.  W.  156,  34  A.  S.  R.  361 ; 

see  McCormick  v.  Stephany,  57  N.  J.  Eq.  257,  41  Atl.  840,  option  to 
renew  unexpired  option  to  purchase;  it  is  otherwise  when  the  privi- 
lege or  option  is  personal,  Newton  v.  Newton,  11  R.  I.  390,  23  Am. 
Rep.  476,  that  is,  not  assignable,  Sims  v.  Cordele  Ice  Co.,  119  Ga. 
597,  46  S.  E.  841. 

5  Eockland-Rockport  Lime  Co.  v.  Leary,  203  N.  Y.  469,  97  N.  E.  43,  Ann. 

Cas.  1913B,  62. 

1  Laffan  v.  Naglee,  9  Cal.  663,  70  Am.  Dec.  678 ;  Hollander  v.  Central 
Metal  etc.  Co.,  109  Md.  131,  71  Atl.  442,  23  L.  R.  A.  (N.  S.)  1135; 
Kadish  v.  Lyon,  2^9  111.  35,  82  N.  E.  194;  Albert  Brick  etc.  Co.  v. 
Nelson,  27  N.  Bruns.  276;  Rockland-Rockport  Lime  Co.  v.  Leary, 
203  N.  Y.  469,  97  N.  E.  43,  Ann.  Cas.  1913B,  62 ;  House  v.  Jackson, 
24  Ore.  89,  32  P.  1027 ;  In  re  Adams,  27  Ch.  Div.  394,  54  L.  J.  Ch.  87, 
51  L.  T.  Rep.  (N.  S.)  382,  32  Wkly.  Rep.  883;  Charles  J.  Smith  Co. 
V.  Anderson,  (N.  J.  Eq.)  95  Atl.  358;  and  binds  the  grantee  of  the 
lessor,  see  Callan  v.  McDaniel,  72  Ala.  96;  Leppla  v.  Mackey,  31 
Minn.  75,  16  N.  W.  470,  unless  otherwise  provided  in  the  lease. 
An  option  in  a  lease  giving  the  lessor  the  right  to  pay  for  improve- 
ments at  appraised  value,  or  continue  the  lease  for  another  year,  is 
binding  on  lessor's  assignee,   Irvin  v.  Simonds,   11  N.  Bruns.   190. 


§  607  LAW  OF  OPTION  CONTRACTS  250 

renew,^  but  a  contract  to  sell  certain  mining  prop- 
erty wliicli  is  personal  and  does  not,  in  terms,  run 
to  the  heirs  and  assigns  of  the  purchaser  and  under 
which,  although  given  possession,  the  purchaser 
could  not  sell  or  assign  without  the  seller's  consent, 
is  not  a  covenant  running  with  the  land.^ 

An  assignment  of  a  lease  as  ** indenture  of  lease" 
carries  with  it  an  option  to  purchase  contained 
therein,*  and  the  assignee  of  the  lease  may  exercise 
the  right  of  option  and  have  specific  performance.^ 
But  the  rule  is  otherwise  if,  by  the  terms  of  the 

2  Blount  V.  Connolly,  110  Mo.  App.  603,  85  S.  W.  605 ;  Eobinson  v.  Perry, 
21  Ga.  183,  68  Am.  Dec.  455;  Bank  of  Greenville  v.  Gornto,  161  N.  C. 
341,  77  S.  E.  222;  Warner  v.  Cochrane,  128  Fed.  553,  63  C.  C.  A. 
207;  McClintock  v.  Joyner,  77  Miss.  678,  27  So.  837,  78  A.  S.  R.  541; 
Cook  V.  Jones,  96  Ky.  283,  28  S.  W.  960,  16  K.  L.  Rep.  469;  Connor 
V.  Withers,  ^  Ky.  L.  Rep.  1326,  49  S.  W.  309,  not  running  to  "heirs 
and  assigns;"  Kolasky  v.  Michels,  120  N.  Y.  635,  24  N.  E.  278; 
Spangler  v.  Spangler,  11  Cal.  App.  321,  104  P.  995;  Lawes  v.  Bennett, 
1  Cox  167,  29  Eng.  Reprint  1111;  Townley  v.  Bedwell,  14  Ves.  Jr. 
591,  33  Eng.  Reprint  648 ;  Daniels  v.  Davison,  16  Ves.  Jr.  249. 

Shelburne  v.  Biddulph,  6  Bro.  P.  C.  356,  2  Eng.  Reprint  1131,  per- 
petual renewal  is  real  covenant  and  goes  with  the  land. 

Buckland  v.  Papillon,  L.  E.  2  Ch.  67,  12  Jur.  (N.  S.)  992,  36  L.  J.  Ch. 
81,  15  L.  T.  Rep.  (N.  S.)  378,  15  Wkly.  Rep.  92,  where  it  is  held 
that  the  leasehold  estate  passed  to  the  assignee  in  bankruptcy  and 
upon  sale  by  him  option  passed  to  purchaser. 

3  Smith  V.  Jones,  21  Utah  270,  60  P.  1104;  see  Sec.  604,  note  2. 

4  Blakeman  v.  Miller,  136  Cal.  138,  68  P.  587,  89  A.  S.  R.  120;  Suther- 

land V.   Goodnow,   108   111.  528,   48   Am.  Rep.  560;   see   Napier  v. 
Darlington,  70  Pa.  64. 
But  there  may  be  an  assignment  of  the  lease  without  an  assignment 
of  the  option,  Doddridge  etc.  Co.  v.  Smith,  154  Fed.  970. 

5  Jackson  etc.  v.  Groat,  7  Cow.   (N.  Y)  285;  see  Kerr  v.  Day,  14  Pa. 

St.   112,   53  Am.  Dee.   526,  agreement   to   give   option;    Napier  v. 
Darlington,  70  Pa.  64. 
Hurley-Tobin  Co.  v.  White,   (N.  J.)  94  Atl.  52,  where  endorsement  on 
lease  to  recognize  H  in  place  of  the  lessee,  gives  H  the  right  of 
renewal  and  option  to  purchase  contained  in  the  lease. 


251  ASSIGNMENT — ESTOPPEL  AND  WAIVER  §  608 

lease,  the  written  consent  of  the  lessor  is  required, 
and  such  consent  has  not  been  obtained.^ 

One  co-tenant  may  assign  the  lease  to  the  other 
co-tenant  and  such  assignment  conveys  the  right  to 
exercise  the  option/ 

The  assignee,  of  course,  stands  in  the  shoes  of  his 
assignor,  and  when  the  option  contains  restrictive 
covenants  as  to  the  use  of  the  land,  he  is  bound  to 
accept  a  deed  containing  such  restrictive  cove- 
nants.® 

The  grantee  of  land  subject  to  a  lease  containing 
an  option  to  lessee  to  purchase,  stands  in  the  place 
of  the  lessor  and  may  enforce  the  terms  of  the 
lease.^ 

A  sub-lessee  is  not  entitled  as  such  to  take  advan- 
tage of  an  option  to  renew  given  by  the  original 
lease,  but  when  he  has  been  substituted  in  the 
lessee's  place  by  him,  and  has  entered  into  posses- 
sion, the  sub-lessee  may  exercise  the  renewal  in  the 
name  of  the  original  tenant  but  not  in  his  own 


Sec.  608.    ESTOPPEL  AND  WAIVER.— 

Though  an  option  is  not  assignable  without  the 
optionor's  consent,  yet  if  the  optionor  accepts  part 

6  Behrens  v.  Cloudy,  50  Wash.  400,  97  P.  450 ;  Andrew  v.  Meyerdirck, 

87  Md.  511,  40  Atl.  173;  Upton  v.  Hosmer,  70  N.  H,  493,  49  Atl.  96. 

7  Pearson  v.  MUlard,  150  N.  C.  303,  63  S.  E.  1053 ;  Spangler  v.  Spangler, 

11  Gal.  App.  321,  104  P.  995,  extension  of  lease. 

8  American  Strawboard  Co.   v.   Holdeinan  Paper  Co.,   83  Fed.   619,   27 

C.  C.  A.  634;  also  Tulk  v.  Moxhay,  2  Ph.  774,  41  Eng.  Reprint  1143, 
15  Eng.  Eul.  Gas.  254. 

9  Millard  v.  Martin,  28  E.  I.  494,  68  Atl.  420. 

10  Cif  elli  V.  Santamaria,  79  N.  J.  L.  354,  75  Atl.  434. 


§  609  LAW  OF  OPTION  CONTRACTS  252 

payment  from  the  assignee,  the  former  will  be 
bound  to  carry  out  the  contract  with  the  latter/  So, 
where  the  optionor  delivers  to  the  assignee  the  cer- 
tificate of  title  to  the  land  required  by  the  option.^ 

The  assignee  of  the  optionee  may  not  raise  the 
question  of  assignability  of  the  option  when  he  has 
entered  into  possession  of  the  lands  and  rented 
them,  and  made  part  payment  on  the  price,'  and  it 
seems  the  same  rule  applies  when  the  optionor 
recognizes  the  assignment  and  negotiates  with  the 
assignee  with  reference  to  ipayment  of  price  and 
sufficiency  of  title/  But,  of  course,  no  estoppel 
could  arise  against  the  optionor  when  the  assignee 
of  the  lessee  (optionee)  was  "plainly  informed" 
by  the  lessor  before  ''anything  was  done  by  the 
assignee  in  reliance  thereon"  that  the  lessee  had  no 
right  to  assign  the  lease,  the  lessor  merely  collecting 
the  rents/ 

A  proviso  in  a  lease  against  assignment  by  the 
lessee  without  the  consent  of  the  lessor,  is  for  the 
benefit  of  the  lessor  and  he  may  waive  a  breach  of 
the  condition/ 

Sec.  609.  EFFECT  OF  ASSIGNMENT. 
EIGHTS  AND  LIABILITIES  OF  PARTIES.— 
As  to  the  rights  of  the  assignee  of  the  optionee,  it 

1  Taylor  v.  Newton,  152  Ala.  459,  44  So.  583. 

2  Simmons  v.  Zimmerman,  144  Cal.  256,  79  P.  451,  1  Ann.  Gas.  850. 
s  Cramer  v.  Mooney,  59  N.  J.  Eq.  164,  44  Atl.  625. 

4  Womack  v.  Coleman,  92  Minn.  328,  100  N.  W.  9. 

5  Myers  v.  J.  J.  Stone  &  Son,  128  Iowa  10,  102  N.  W.  507,  111   A.  S.  E. 

180,  5  Ann.  Cas.   912,  nor  by  placing  an  engine  and  pump   in  the 
mine  so  that  the  assignee  might  better  work  the  mine. 

CWinslow  V.  Dundom,  46  Mont.  71,  125  P.  136. 


253  ASSIGNMENT — EFFECT   OP         '  §  609 

is  held  that  he  is  not  protected  as  a  hona  fide  pur- 
chaser for  value,  as  against  any  defects  which  can 
be  asserted  by  the  optionor  against  his  optionee, 
since  the  rule  extends  only  to  cases  where  the  legal 
title  is  purchased  and  not  to  an  option  though  sup- 
ported by  a  consideration/ 

The  general  rule  is  that,  when  the  option  is 
assignable,  an  assignment  of  it  vests  in  the  assignee 
all  the  rights  which  the  assignor  had  at  the  time  of 
the  assignment  and  no  more.^  Thus,  an  assignment 
of  an  option  on  a  large  tract  of  land  in  relation  to 
which  there  was  an  agreement  to  construct  a  line 
of  railway  to  it,  if  accepted  within  a  certain  time, 
and  providing  that  the  option  should  not  take  effect 
until  such  compliance,  an  assignee  of  the  option 
took  it  subject  to  the  contingency  of  acceptance  of 
the  railway  agreement  though  he  had  no  notice  of 
that  writing.^ 

1  National  Oil  &  P.  L.  Co.  v.  Teel,  95  Tex.  586,  68  S.  W.  979,  this  is 

based  on  the  rale  that  the  purchaser  of  an  equitable  title  takes  it 
with  all  its  imperfections  and  equities;  see  also  Storms  v.  Mundy, 
46  Tex.  Civ.  App.  88,  101  S.  W.  258,  fraud  of  optionor 's  agent; 
Trice  v.  Comstock,  121  Fed.  620,  57  C.  C.  A.  646,  61  L.  R.  A.  176; 
Henry  v.  Black,  213  Pa.  620,  63  Atl.  250;  Seibel  v.  Higham,  216 
Mo.  121,  115  S.  W.  987,  trust. 

2  See   Cameron  v.   Shumway,   149   Mich.   634,   113   N.   W.   287 ;    Gray  v. 

Pelton,  67  Ore.  239,  135  P.  755;  Salisbury  v.  LaFitte,  21  Colo.  App. 

13,  121  P.  952. 
Moyses   v.   Hewitt,   20   Idaho   311,    118   P.   839,   case   where   optionee 

assigned  option  to  Y,  and  Y  then  assigned  to  optionor  after  which 

the  optionee  assigned  the  option  to  M,  who  sought  to  enforce  same, 

and  it  was  held  the  optionor  was  under  no  obligation  to  convey  to  M. 
Stephens  v.  Coryell,  169  Mich.  48,  134  N.  W.  1094,  case  where  contract 

for   sale   of   land   was   reformed   to   constitute   lease   and   option   to 

purchase. 

S  Shuttleworth  v.  Kentucky  Coal  I.  &  D.  Co.,  22  Ky.  L.  Eep.  1341,  60 
S.  W.  534. 


§  609  LAW  OF  OPTION  CONTRACTS  254 

The  effect  of  an  assignment  by  the  optionee  when 
the  option  is  assignable,  is  to  clothe  his  assignee 
with  the  right  to  exercise  the  option  and  upon 
election  and  tender  to  enforce  the  contract  thus 
raised.  But  the  assignment  does  not  enlarge  the 
rights  of  the  optionor.  Thus,  when  an  agent  pro- 
cured an  option  in  his  own  name,  but,  in  fact,  for 
the  benefit  of  his  principal,  to  whom  he  assigned 
the  option  and  who  agreed  to  make  the  deferred 
payments,  the  optionor  could  not  compel  the  prin- 
cipal to  make  the  payments  called  for  by  the 
option.* 

A  clause  in  an  option  giving  the  optionee  the 
right  to  pass  upon  and  reject  the  title  as  insufficient, 
passes  to  the  assignee  of  the  optionee.^ 

The  assignee  of  the  vendee  is  not  subject  to  the 
obligations  of  the  contract  of  sale,  except  on  his 
option  to  enforce  it  by  specific  performance,^  or 
unless  he  has  contracted  to  become  responsible  to 

3  National  Oil  &  P.  L.  Co.  v.  Teel,  95  Tex.  586,  68  S.  W.  979,  assignee 
of  oil  option  not  bound  by  fraud  of  assignor,  on  ground  that  rule 
as  to  honn  fide  purchasers  applies  only  to  cases  where  purchaser  has 
taken  legal  title. 
Measure  of  damages  for  misrepresentations  by  optionee  of  price  paid 
for  option  on  assignment  of  part  interest,  Mayo  v.  Wahlgreen,  9 
Colo.  App.  506,  50  P.  40. 

4Eockwell  V.  Edgcomb,  72  Wash.  694,  131  P.  191;   see  Frye-Bruhn  Co. 

V.  McGowan,  38  Wash.  586,  80  P.  761. 
An   option  taken  by   an   agent  in  his   own  name  but  under  an   oral 

agreement  that  it  was  for  his  principal,  entitles  the  latter  to   the 

benefit  of  the  option  as  against  an  assignee  of  the  agent,  Henry  v. 

Black,  213  Pa.  620,  63  Atl.  250. 
Partial  assignment,  Andrew  v.  Meyerdirck,  87  Md.  511,  40  Atl.  173. 
As  to  bona  fide  purchaser,  notice,  etc.,  see  Sec.  515. 

5  Simmons  v.  Zimmerman,  144  Cal.  256,  79  P.  451,  1  Ann.  Cas.  850. 

6  Couch  V.  Crane,  142  Ga.  22,  82  S.  E.  459. 


255  ASSIGNMENT — MISCELLANEOUS  CASES  §  610 

the  vendor  for  the  promises  of  the  purchaser,^  and 
this  rule  holds,  notwithstanding  the  contract  of  sale 
provides  that  the  conveyance  therein  shall  bind  the 
assigns  of  the  parties.* 

One  holding  an  option  for  the  purchase  of  land 
and  agreeing  to  sell  it  to  another,  can  not,  in  dero- 
gation of  his  purchaser's  rights,  take  a  conveyance 
to  himself  and  wife.^ 

Sec.  610.  MISCELLANEOUS  CASES.— An 
assignment  by  the  optionee  of  his  interest  in  an 
option,  is  a  valid  consideration  for  a  note.^ 

7  South  Texas  Mtge.  Co.  v.  Coe,  (Tex.  Civ.  App.)  166  S.  W.  419. 

SBimrose  v.  Matthews,  78  Wash.  32,  138  P.  319,  also  holding  that  the 
assignee  may  be  required  to  pay  the  price  or  surrender  the  land,  or 
the  land  may  be  sold  to  satisfy  the  debt. 

9  Solomon  v.  Shewitz,  (Mich.)  152  N.  W.  196. 

Case  where  optionee,  after  default  of  his  assignee  attempts  to  carry 
out  option  and  recover  money  from  escrow  bank,  White  v.  Bank  of 
Hanford,  148  Cal.  552,  83  P.  698. 

Granting  of  an  option  does  not  prevent  the  optionor  from  disposing 
of  the  property  subject  to  the  option.  However,  the  grantee,  with 
notice  of  the  option,  stands  in  the  "shoes"  of  the  optionor,  Elliott 
V.  DeLaney,  217  Mo.  14,  116  S,  W.  494. 

Optionor  is  not  relieved  from  liability  on  covenant  for  renewal  of  lease 
by  conveyance  of  the  premises,  Neal  v.  Jefferson,  212  Mass.  517, 
99  N.  E.  334,  Ann.  Cas.  1913D,  205. 

Payment  to  optionee  in  extinguishment  of  his  rights,  does  not  extin- 
guish rights  of  assignee  when  party  making  payment  knew  of  the 
assignment,  Nance  v.  Polk,  (Ark.)   171  S.  W.  1195. 

Case  where  assignee  of  optionee  permits  option  to  lapse  and  optionee 
received  stipulated  amount  for  assignment,  Scott  v.  Hughes,  66 
W.  Va.  573,  66  S.  E.  737. 

An  assignment  by  a  corporation  of  an  undivided  interest  in  option 
contracts,  to  one  stockholder  subject  to  the  control  of  the  other 
stockholders,  does  not  vest  any  title,  Hardinge  v.  Empire  Zinc  Co., 
(Ariz.)  148  P.  306. 

1  Hanna  v.  Ingram,  93  Ala.  482,  9  So.  621. 


§  610  LAW  OF  OPTION  CONTRACTS  256 

Where  an  agent  is  empowered  by  writing  to  sell 
land  under  arrangements  implying  a  cash  sale,  Ms 
assignment  of  the  writing,  without  payment  of  the 
price,  is  not  a  sale.^ 

The  assignee  of  an  option  is  not,  under  the  Texas 
statutes,  protected  as  a  bona  fide  purchaser.^  Where 
the  optionee  is  within  the  rule,  it  seems  that  to 
make  him  a  purchaser  for  value,  it  is  necessary  that 
the  purchase  price  has  been  paid.* 

The  assignee  is  entitled  to  purchase  for  the  same 
price  as  the  assignor.^ 

Upon  acceptance  of  the  option  by  the  assignee 
he  becomes  obligated  to  pay  the  assignor  the  price 
stipulated  in  the  option,  which  was  the  difference 
between  the  price  per  acre  fixed  by  the  assignor's 
option  from  the  owner  of  the  land,  and  the  assign- 
ment price  of  $40  per  acre.^ 

The  fact  that  the  optionee,  during  the  term  of 
his  option,  contracted  to  sell  the  land  to  a  third 
person,  does  not  prevent  him  from  maintaining  suit 

2  Dyer  v.  Duffy,  39  W.  Va.  148,  19  S.  E.  540,  24  L.  E.  A.  339. 

3  National  Oil  etc.  Co.  v.  Teel,  95  Tex.  586,  68  S.  W.  979,  affirming  67 

S.  W.  545. 

4  Tibbs  V.  Zirkle,  55  W.  Va.  49,  46  S.  E.  701,  104  A.  S.  R.  977,  2  Ann. 

Gas.  421 ;  see  Sec.  515. 
When  subject  to  trust  deed,  Kaufman  v.  All  Persons,  16  Gal.  App.  388, 
117  P.  586. 

5  Pollard  V.  Sayre,  45  Colo.  195,  98  P.  816. 

6  Strasser  v.  Steck,  216  Penn.  577,  66  Atl.  87, 

An  assignment  of  an  option  construed  as  obligating  the  assignee  to 
pay  the  balance  of  the  price  for  the  assignment  only  in  the  event 
of  his  election,  Caine  v.  Hagenbarth,  37  Utah  69,  106  P.  945;  see 
Lisenby  v.  Newton,  120  Gal.  571,  52  P.  813,  65  A.  S.  R.  203. 


257  ASSIGNMENT — MISCELLANEOUS   CASES  §  610 

for  specific  performance  on  the  ground  that  he  has 
an  adequate  remedy  at  law.'^ 

An  agreement  of  a  lessor,  endorsed  on  a  lease,  to 
recognize  a  third  person  as  lessee  in  place  of  the 
original  lessee,  and  to  renew  the  agreement  on 
request,  for  another  period  of  six  years,  gives  the 
third  person  not  only  the  optional  right  of  the  orig- 
inal lessee,  under  the  lease,  to  purchase,  but  also  the 
right  to  renewal  for  the  six  years. ^ 

7  Solomon  Mier  Co.  v.  Hadden,   148   Mich.   488,   111   N.   W.    1040,    118 

A.  S.  E.  586,  12  Ann.  Cas.  88. 

But  the  assignor  would  not  be  entitled  to  consideration  for  the  assign- 
ment if  he  was  acting  as  agent  for  the  assignee  or  as  a  broker  for 
the  owner,  see  Graves  v.  Dill,  159  Mass.  74,  34  N.  E.  336. 

Eeceipt  for  money  paid  by  optionee  given  by  him  to  L  to  whom  he  had 
assigned  a  share  in  the  option  on  account  of  an  option-sale  of  the 
option,  held  not  to  show  a  sale  by  L,  Lazier  v.  Cady,  44  Wash.  339, 
87  P.  344. 

8  Hurley-Tobin  Co.  v.  White,  (N.  J.)  94  Atl.  52. 


17 — Option  Contracts. 


CHAPTER  VII. 


DISCHAEGE  OF  OPTION  CONTRACT. 

Sec.  701.  Generally. 

Sec.  702.  Breach  by  optionor  prior  to  election. 

Sec.  703.  Withdrawal  or  revocation.     Offer  and  option  distinguished. 

Sec.  704.  Withdrawal  or  revocation.     Communication  of  notice  neces- 
sary. 

Sec.  705.  What  constitutes  revocation.    Notice  thereof. 

Sec.  706.  Same.  Cases. 

Sec.  707.  Expiration  of  time  limit. 

See.  708.  Reservation  of  right  to  terminate. 

See.  709.  Death  or  insanity.    Bankruptcy. 

See.  710.  Abandonment.    Surrender. 

See.  711.  Renunciation. 

Sec.  712.  Rescission. 

Sec.  713.  Substitution  of  new  contract  or  of  new  term. 

Sec.  714.  Breach  by  optionee  prior  to  election. 

Sec.  715.  Same.     Failure  to  pay  rent  as  discharge  of  option  in  lease. 

Sec.  716.  Same.     Miscellaneous  covenants  and  agreements. 

See.  717.  Same.     Waiver  of  optionee's  breach. 

See.  718.  Conditional  election. 

Sec.  719.  Election. 

(259) 


§§  701,  702  LAW  OF  OPTION   CONTRACTS  260 

Section  701.  GENERALLY.— Having  treated 
of  the  characteristics,  formation,  consideration, 
validity  and  assignment  of  the  option  contract  as 
well  as  of  the  interest  or  estate  of  the  optionee 
under  such  contract,  the  next  inquiry  is  concerning 
the  different  methods  of  discharging  the  contract. 
The  common  forms  are:  (a)  withdrawal,  abandon- 
ment, renunciation,  repudiation  and  rescission; 
(b)  expiration  of  the  option  time  limit,  that  is, 
lapse  of  time,  without  election;  (c)  death  or  insan- 
ity; (d)  performance,  that  is,  election;  (e)  breach 
by  the  optionee  prior  to  election ;  and  (f )  breach  by 
the  optionor  prior  to  election. 

Sec.  702.  BREACH  BY  OPTIONOR  PRIOR 
TO  ELECTION.— Breach  of  the  option  contract 
by  the  optionor  prior  to  election,  in  virtue  of  the 
nature  of  the  option  contract,  must  be  with  refer- 
ence to  the  covenant  to  convey  upon  proper  and 
seasonable  election,  for,  in  the  common  option,  this 
is  the  only  covenant  on  the  part  of  the  optionor. 

As  a  general  statement,  the  breach  may  consist 
of  an  attempted,  but  unauthorized,  withdrawal  of 
the  option  privilege,  the  repudiation  of  the  con- 
tract, or  any  other  positive  and  unequivocal  act 
which  discloses  a  present  fixed  intention  on  the  part 
of  the  optionor  not  to  keep  and  perform  his  cove- 
nant to  convey.^   These  are  classed  as  withdrawal 

1  An  option  in  a  lease  giving  the  lessee  the  "first  refusal"  of  buying 
the  premises,  under  the  reserved  right  of  the  lessor  to  sell  during 
the  term,  is  not  breached  by  a  conveyance  to  a  third  person,  the 
deed  of  the  optionor  reserving  the  use  of  the  premises  for  the 
full  term  of  the  lease,  Blanchard  v.  Ames,  60  N.  H.  404;  also  Cal- 
laghan  v.  Hawkes,  121  Mass.  298;  Raymer  v.  Hobbs,  (Cal.  App.)  146 
P.  906;  also  Collinson  v.  Lettson,  6  Taunt.  224,  2  Marsh  1,  128  Eng. 


261  DISCHARGE  BY  BREACH  §  702 

or  revocation,  and  repudiation  or  renunciation,  and 
upon  taking  place  before  the  expiration  of  the 
option  time  limit,  the  optionee  has  the  right  to 
treat  the  option  as  discharged.  But  it  is  optional 
with  the  optionee  so  to  treat  it,  or  to  hold  the 
optionor  to  performance,  in  accordance  with  the 
rule  that  each  party  to  a  contract  has  the  right  to 
maintain  the  contract  relation  up  to  the  time  per- 
formance is  due,  and  that,  consequently,  the 
optionor,  in  the  case  noted,  can  not  anticipate  a 
breach  which  will  bind  the  optionee  unless  the 
latter  elects  to  treat  it  as  a  breach. 

Breach  of  the  option  contract  by  the  optionor 
during  its  time  limit  does  not,  therefore,  affect  the 
right  of  the  optionee  to  elect  after  the  breach  and 
during  its  time  limit.  ^  However,  if  the  optionee 
treats  the  act  as  a  breach  he  is,  according  to  what 
seems  to  be  the  prevailing  rule,  entitled  to  sue 
immediately  for  damages  and  is  not  required  to 
wait  until  after  the  expiration  of  the  option  time 
limit.^ 

Keprint   1020,  sale  of  the  optioned  property  as  part  of  an  entire 
estate,  for  one  entire  price. 

1  It  is  not  a  breach  by  the   optionor  when   he   bargains   the   property 

during    the    option    time    only    contingently    upon    failure    of    the 
optionee  to  elect,  Smith  v.  Lawrence,  98  Me.  92,  56  Atl.  455. 

Bankruptcy  of  optionor,  see  In  re  Neff,  157  Fed.  57,  84  C.  C.  A.  561, 
28  L.  K.  A.  (N.  S.)  349. 

2  See  Solomon  Mier  Co.  v.  Hadden,  148  Mich.  488,  111  N.  W.  1040,  118 

A.  S.  B.  586,  12  Ann.  Gas.  88. 

8  Boehm  v.  Horst,  178  U.  S.  1,  44  L.  Ed.  953,  20  S.  Ct.  780,  following 
Rochester  v.  De  La  Tour,  2  El.  &  Bl.  678.  See  In  re  Neff,  supra, 
(bankruptcy),  and  Sec.  1104. 

On  principle  it  would  seem  the  rule  of  anticipatory  breach  applies  to 
an  executory  bilateral  contract  and  not  to  an  act  like  election  under 
a  one-sided  contract  or  an  option,  see  Sees.  711,  801. 


§  702  LAW  OF  OPTION  CONTRACTS  262 

The  subject  of  anticipatory  breach  is  involved  in 
some  conflict  of  authority.  While  its  presentation 
is  not  necessary  to  the  subject  in  hand,  reference  is 
made,  in  the  notes,  to  some  leading  and  interesting 
decisions  on  the  subject/ 

If  the  optionee  does  not  treat  the  act  as  a  breach, 
but  stands  upon  his  option  rights,  it  will,  it  seems, 
be  necessary  for  him  properly  and  seasonably  to 
exercise  the  option  privilege,  for  while  repudiation, 
for  instance,  will,  in  certain  cases,  excuse  timely 
tender  and  delay  in  payment  of  the  price  which 
have  to  do  with  the  performance  of  the  contract,  it 
does  not  dispense  with  election  by  the  optionee, 
since  such  act  is  necessary  to  turn  the  option  agree- 
ment into  a  binding  promise  on  the  part  of  the 
optionor  to  convey,  and  a  mere  repudiation,  or 
breach,  does  not  work  this  result.^ 

3  It  is  held  in  Harle  v.  Haggin,  116  N.  Y.  S.  51,  131  App.  Div.  742,  that 

an  option  to  purchase  extending  over  several  years  is  not  breached 
by  the  optionor  until  there  is  an  election  and  tender  of  performance. 
Under  an  option  to  repurchase  land  the  exercise  of  the  option  and 
tender  of  a  deed  of  re-conveyance  by  the  grantee,  are  not  excused 
because  the  grantor  informed  the  grantee  that  he  did  not  then  have 
the  money  to  repurchase,  Curtis  v.  Sexton,  142  Mo.  App.  179,  125 
S.  W.  806;  but  a  statement  by  the  seller  to  the  purchaser,  at  the 
time  the  latter  demanded  to  repurchase,  that  he  "could  not  do  it" 
is  an  "  offer  and  refusal ' '  under  the  California  statute,  and  demand 
and  offer  need  not  be  made  at  the  exact  expiration  of  the  fixed 
time,  Howard  v.  Galbraith,  13  Cal.  App.  373,  109  P.  889. 

4  See  Stanford  v.  McGill,  6  N.  D.  536,  72  N.  W.  938,  28  L.  R.  A.  760, 

where  the  conflicting  cases  are  reviewed.  Also  The  McCall  Co.  v. 
Icks,  107  Wis.  232,  83  N.  W.  300;  Anderson  v.  Kirby,  125  Ga.  62, 
54  S.  E.  197,  114  A.  S.  B.  185,  5  Ann.  Gas.  103;  Payne  v.  Melton,  67 
S.  C.  233,  45  S.  E.  154;  see  cases  in  note  3,  supra. 
Sullivan  v.  McMillan,  26  Fla.  543,  8  So.  450,  457,  noting  the  distinction 
sometimes  made  between  the  right  to  sue  before  the  time  fixed  and 
waiver  of  performance  merely. 

6  See  Sec.  868,  waiver. 

See  Thomson  v.  Kyle,  39  Fla.  582,  23  So.  12,  17,  62  A.  S.  R.  193,  condi- 
tion precedent. 


263  WITHDRAWAL  OR  REVOCATION  §  703 

Sec.  703.  WITHDRAWAL  OR  REVOCA- 
TION. OFFER  AND  OPTION  DISTIN- 
GUISHED.— An  offer  may  be  withdrawn  by  tbe 
party  making  it  at  any  time  before  its  unconditional 
acceptance  by  the  party  to  whom  it  is  made,^  and 

5  The  text  is  here  treating  of  the  bilateral  contract  and  its  enforcement. 
As  to  the  option  contract,  see  Sec.  1104. 

iBorst  V.  Simpson,  90  Ala.  373,  7  So.  814;  Eskridge  v.  Glover,  (Ala.) 
5  Stew.  &  P.  264,  26  Am.  Dec.  344;  Jones  v.  Lewis,  89  Ark.  368, 
117  S.  W.  561;  Brown  v.  San  Francisco  Sav.  Union,  134  Cal.  448, 
66  P.  592;  Mitchel  v.  Gray,  8  Cal.  App.  423,  97  P.  160;  Leuschner 
V.  Dufe,  7  Cal.  App.  721,  95  P.  914;  Canty  v.  Brown,  11  Cal.  App. 
487,  105  P.  428;  Gordon  v.  Darnell,  5  Colo.  302;  Davis  v.  Riddle, 
25  Colo.  App.  162,  136  P.  551,  mining  option;  Smith  v.  Bateman, 
8  Colo.  App.  336,  46  P.  213;  Black  v.  Maddox,  104  Ga.  157,  30  S.  E. 
723;  Goodman  v.  Spurlin,  131  Ga.  588,  62  S.  E.  1029;  Prior  v. 
Hilton  &  D.  Lumber  Co.,  141  Ga.  117,  80  S.  E.  559;  Larmon  v. 
Jordan,  56  lU.  204;  Corbett  v.  Cronkhite,  239  HI.  9,  87  N.  E.  874; 
Carter  v.  Love,  206  111.  310,  69  N.  E.  85;  O'Connor  v.  Harrison, 
132  HI.  App.  264;  Cortelyou  v.  Barnsdall,  236  HI.  138,  86  N.  E.  200, 
B.  c.  140  HI.  App.  163,  oil  lease — offer  withdrawn  before  work 
commenced;  Murphy  T.  &  Co.  v.  Eeid,  125  Ky.  585,  101  S.  W.  964, 
31  Ky.  L.  Rep.  176,  10  L.  R.  A.  (N.  S.)  195;  Coleman  v.  Apple- 
garth,  68  Md.  21,  11  Atl.  284,  6  A.  S.  R.  417;  Wilcox  v.  Cline, 
70  Mich.  517,  38  N.  W.  555;  Weiden  v.  Woodruff,  38  Mich.  130; 
Ward  v.  Davis,  154  Mich.  413,  117  N.  W.  897;  Ellsworth  v.  R.  Ex. 
Co.,  31  Minn.  543,  18  N.  W.  822 ;  Moise  v.  Company,  79  Neb.  124, 
112  N.  W.  372;  Houghwout  v.  Boisaubin,  18  N.  J.  Eq.  315;  Quick  v. 
Wheeler,  78  N.  Y.  300;  Hochster  v.  Baruch,  5  Daly  (N.  Y.)  440, 
employment;  Bryant  Timber  Co.  v.  Wilson,  151  K  C.  154,  65  S.  E. 
932;  Mossie  v.  Cyrus,  61  Ore.  17,  119  P.  485;  Bosshardt  &  Wilson  Co. 
V.  Crescent  Oil  Co.,  171  Pa.  109,  32  Atl.  1120;  Connor  v.  Renneker, 
25  S.  C.  514;  Tucker  v.  Lawrence,  56  Vt.  467;  Weaver  v.  Burr,  31 
W.  Va.  736,  8  S.  E.  743,  3  L.  R.  A.  94;  Nelson  v.  Stephens,  107  Wis. 
136,  82  N.  W.  163;  Cram  v.  Long,  154  Wis.  13,  142  N.  W.  267; 
Mueller  v.  Nortmann,  116  Wis.  468,  93  N.  W.  538,  96  A.  S.  R.  997 ; 
Frank  v.  Stanford-Handcock,  13  Wyo.  37,  77  P.  134,  110  A.  S.  R. 
963,  67  L.  R.  A.  571;  Dickinson  v.  Dodds,  L.  R.  2  Ch.  Div.  463,  34 
L.  T.  (N.  S.)  607;  Stitt  v.  Huidekopers,  17  Wall.  384,  21  L.  Ed.  644, 
option  and  agency;  Davis  v.  Shaw,  21  Ont.  L.  Rep.  474,  15  Ont. 
Wkly.  Rep.  134,  16  id.  273;  Routledge  v.  Grant,  4  Bing.  653,  15 
E.  C.  L.  678,  130  Eng.  Reprint  920;  Wheeling  Creek  etc.  Co.  v.  Elder, 
170  Fed.  215;  Snow  v.  Nelson,  113  Fed.  353;  Couch  v.  McCoy,  138 
Fed.  696,  rule  applies  to  option  to  purchase  as  well  as  option  to  sell. 


§  703  LAW  OP  OPTION  CONTRACTS  264 

notwithstanding  a  time  is  fixed  within  which  the 
offer  may  be  accepted,^  and  notwithstanding  an 
express  stipulation  in  the  offer  that  it  should  not 
be  withdrawn  during  that  time.^ 

It  is  otherwise  with  an  option  contract.  Such 
contract,  as  we  have  seen,  is  supported  by  a  con- 
sideration and,  by  virtue  of  this  fact,  the  optionor 
may  not  withdraw  or  revoke  the  option  contract 
during  its  time  limit.^  And  the  same  rule  applies 

2  Brown  v.  San  Francisco  Savings  Union,  supra;  Walter  G.  Reese  Co. 
V.  House,  162  Cal.  740,  124  P.  442 ;  Gordon  v.  Darnell,  5  Colo.  302 ; 
Black  V.  Maddox,  104  Ga.  157,  30  S.  E.  723,  724;  Larmon  v.  Jordan, 
56  HI.  204;  Ide  v.  Leiser,  10  Mont.  5,  24  P.  695,  24  A.  S.  R.  17; 
Boston  etc.  R.  Co.  v.  Bartlett,  3  Gush.  (Mass.)  224;  Head  v.  Diggon, 
3  M.  &  Ry.  97,  7  L.  J.  (O.  S.)  K.  B.  36. 

8  An  option  not  supported  by  a  consideration  may  be  withdrawn  at  any 
time  before  acceptance,  notwithstanding  it  expressly  stipulates  it  is 
"irrevocable,"  Carton  v.  Wilson,  13  Ont.  L.  Rep.  412;  Weaver  v. 
Burr,  supra;  see  Peck  v.  Freese,  101  Mich.  321,  59  N.  W.  600; 
National  Refining  Co.  v.  Miller,  1  S.  D.  548,  47  N.  W.  962. 
The  motive  of  the  optionor  for  withdrawing  is  immaterial,  Noble  v. 
Mann,  32  Ky.  L.  Rep.  30,  105  S.  W.  152. 

4  Hanna  v.  Ingram,  93  Ala.  482,  9  So.  621 ;  Taylor  v.  Newton,  152  Ala. 
459,  44  So.  583;  Ross  v.  Parks,  93  Ala.  153,  8  So.  368,  30  A.  S.  R.  47, 
11  L.  R.  A.  148;  Linn  v.  McLean,  80  Ala.  360;  Marsh  v.  Lott,  8 
Cal.  App.  384,  97  P.  163;  Walter  G.  Reese  Co.  v.  House,  162  Cal. 
740,  124  P.  442;  Copple  v.  Aigeltinger,  167  Cal.  706,  140  P.  1073; 
Simpson  v.  Sanders,  130  Ga.  265,  60  S.  E.  541;  Larned  v.  Wentworth, 
114  Ga.  208,  39  S.  E.  855;  Black  v.  Maddox,  104  Ga.  157,  30  S.  E. 
723;  Prior  v.  Hilton  &  D.  L.  Co.,  141  Ga.  117,  80  S.  E.  559;  Larmon 
V.  Jordan,  56  HI.  204 ;  Seyferth  v.  Groves  etc.  R.  R.  Co.,  217  HI.  483, 
75  N.  E.  522,  affirming  119  HI.  App.  275;  Souffrain  v.  McDonald, 
27  Ind.  269;  Herman  v.  Babcock,  103  Ind.  461,  3  N.  E.  142;  Murphy 
Thompson  Co.  v.  Reed,  supra,  contra;  Grabenhorst  v.  Nicodemus, 
42  Md.  236;  Solomon  Mier  ,&  Co.  v.  Hadden,  148  Mich.  488,  111 
N.  W.  1040,  118  A.  S.  R.  586,  12  Ann.  Cas.  88;  New  England  Box 
Co.  V.  Prentiss,  75  N.  H.  246,  72  Atl.  826;  Myers  v.  Metzger,  61 
N.  J.  Eq.  522,  48  Atl.  1113;  Gaylord  v.  McCoy,  161  N.  C.  685,  77 
S.  E.  959;  Winders  v.  Kenan,  161  N.  C.  628,  77  S.  E.  687;  Bradford 
V.  Foster,  87  Tenn.  4,  9  S.  W.  195;  Walker  v.  Bamberger,  17  Utah 
239,  54  P.  108 ;  Cummins  v.  Beavers,  103  Va.  230,  48  S.  E.  891,  106 
A.  S.  R.  881 ;  Baker  v.  Shaw,  68  Wash.  99,  122  P.  611 ;  Watkins  v. 


265  WITHDRAWAL  OR  REVOCATION  §  703 

in  those  jurisdictions  where  a  seal  imports  a  con- 
sideration.^ But  to  have  this  effect  the  considera- 
tion to  support  the  option  must  be  one  separate 
and  apart  from  that  which  upon  election  becomes 
the  consideration  for  the  agreement  of  sale.®  In 
accordance  with  the  rule,  an  option  to  purchase 
contained  in  a  lease  of  the  premises,  or  in  any 
other  contract  which  supplies  a  consideration  for 
the  option,  is  irrevocable  during  the  time  limit,  on 
the  theory  that  the  consideration  of  the  lease,  or 
the  other  contract,  supplies  the  consideration  for 
the  option.'^ 

The  rule  with  reference  to  option  contracts  is 
that,  upon  payment  of  the  consideration  for  the 
option  and  the  signing  of  the  option  contract,  it 
becomes  an  executed  contract  for  the  sale  of  an 

Eobertson,  105  Va.  269,  54  S.  E.  33,  115  A.  S.  E.  880,  5  L.  R.  A. 
(N.  S.)  1194,  1  Ann.  Gas.  986;  Tibbs  v.  Zirkle,  55  W.  Va.  49,  46  S.  E. 
701,  104  A.  S.  E.  977,  2  Ann.  Gas.  421;  Rease  v.  Kittle,  56  W.  Va. 
269,  49  S.  E.  150 ;  Weaver  v.  Burr,  supra. 

4  When   the   consideration   consists    of   acts    to   be   performed    by    the 

optionee,  the  optionor  may  withdraw  at  any  time  before  performance, 
Corbett  v.  Cronkhite,  239  HI.  9,  87  N.  E.  874. 

5  McMillan  v.  Ames,  33  Minn.  257,  22  N.  W.  612 ;  Larmon  v.  Jordan, 

56  111.  204;  O'Brien  v.  Boland,  166  Mass.  481,  44  N.  E.  602;  Fuller 
V.  Artman,  69  Hun.  (N.  Y.)  546,  2  N.  Y.  S.  13;  see  Sees.  332-333. 

6  Williams  v.  Graves,  7  Tex.  Giv.  App.  356,  26  S.  W.  334;   Tidball  v. 

Challburg,  67  Neb.  524,  93  N.  W.  679;  see  Sees.  322-323. 

7  Stanwood  v.  Kuhn,  132  111.  466,  lease ;   Tilton  v.  Sterling  C.  Co.,  28 

Utah  173,  77  P.  758,  107  A.  S.  E.  689;  Pearson  v.  Millard,  150  N.  G. 
303,  63  S.  E.  1053,  lease;  Harper  v.  Eunner,  85  Neb.  343,  123  N.  W. 
313,  lease;  Hall  v.  Abraham,  44  Ore.  477,  75  P.  882,  licensee  in 
possession  of  mine  with  option  to  purchase;  Frank  v.  Stratford- 
Handcock,  13  Wyo.  37,  77  P.  134,  110  A.  S.  R.  963,  67  L,  E.  A. 
571,  lease;  SoufCrain  v.  McDonald,  27  Ind.  269;  Tidball  v.  Chall- 
burg, 67  Neb.  524,  93  N.  W.  679;  Chas.  J.  Smith  Go.  v.  Anderson, 
(N.  J.  Eq.)  95  Atl.  358;  see  Sec.  321. 


§  704  LAW  OF  OPTION  CONTRACTS  266 

option  to  purchase  and  thus  is  irrevocable  by  the 
optionor  during  the  time  limit.  ^ 

Of  course,  the  option  can  not  be  withdrawn  after 
a  timely  and  proper  election,^  and  the  same  rule 
obtains  with  reference  to  offers/*^ 

Where  the  offer  is  made  in  writing  to  several 
persons  as  co-contractors  and  is  without  considera- 
tion, the  person  making  the  offer  may  withdraw  it 
at  any  time  before  it  has  been  accepted  by  all  those 
to  whom  it  was  made/^ 

The  rule  applicable  to  the  original  offer  or  option 
also  governs  extensions/^ 

Sec.  704.  WITHDRAWAL  OR  REVOCA- 
TION. COMMUNICATION  OF  NOTICE 
NECESSARY.— To  make  effective  a  withdrawal 
or  revocation  of  an  offer  by  the  optionor,  it  is 

8  Pollock  V.  Brookover,  60  W.  Va.  75,  53  S.  E.  795,  6  L.  K.  A.  (N.  S.) 

403 ;  Black  v.  Maddox,  104  Ga.  157,  30  S.  E.  728. 
Possession  and  improvements  by  optionee  do  not  make  option  irrev- 
ocable by  optionor,  when  possession  not  given  by   option,   Gordon 

V.  Darnell,  5  Colo.  302. 
Lease  and  option  to  purchase  separate  and  independent  agreements ; 

therefore,  notice  terminating  lease  does  not  defeat  option,  Mathews 

Slate  Co.  V.  New  Empire  Slate  Co.,  122  Fed.  972. 
Voting  pool  on  shares  and  option  to  purchase  as  power  coupled  with 

interest   and   irrevocable,    see    Boyer   v.    Nesbitt,   227    Pa.    398,    76 

Atl.  103. 

9  Baker  v.  Shaw,  68  Wash.  99,  122  P.  611;  Donahue  v.  Potter  &  George 

Co.,  63  Neb.  128,  88  N.  W.  171;  see  Sec.  871. 

10  Prior  v.  Hilton  &  D.  L.  Co.,  141  Ga.  117,  80  S.  E.  559. 

The  rule  does  not  apply  to  bilateral  contracts,  Thompson  v.  Wilkin- 
son, (Okl.)   148  P.  177. 

11  Burton  v.  Shotwell,  76  Ky,  (13  Bush.)  271;  see  Sec.  805. 

12  Cummins  v.  Beavers,  103  W.  Va.  230,  48  S.  E.  891,  106  A.  S.  R.  881, 

1  Ann.  Cas.  986 ;  Ganss  v.  Company,  110  N.  Y.  S.  176,  125  App.  Div. 
760;  Coleman  v.  Applegarth,  68  Md.  21,  11  Atl.  284,  6  A,  S.  E.  417; 
Bee  Sees.  409,  859,  861. 


267  WITHDRAWAL NOTICE   OP  §  704 

necessary  that  notice  thereof  be  communicated  to 
the  other  party  before  acceptance  by  him/  and 
where  the  offer  is  made  by  mail,  or  telegraph,  or 
by  other  carrier,  the  withdrawal  takes  effect,  not 
from  the  moment  of  its  dispatch,  as  in  case  of 
communication  of  acceptance  of  an  offer,  but  from 
the  moment  of  its  receipt  by  the  party  to  whom 
the  offer  is  made.^  Thus,  a  person  who  has  received 
an  offer  by  post,  or  telegraph,  and  has  posted  or 
telegraphed  his  acceptance,  has  thereby  created  a 
binding  contract,  though  notice  of  the  revocation 
of  the  offer  had  been  posted,  or  the  wire  filed  for 
transmission  to  him,  before  his  acceptance.^ 

There  are  decisions  holding  that  notice  of  with- 
drawal is  unnecessary,  but  these  decisions  stand 
opposed  to  the  weight  of  judicial  authority.  Thus, 
Cooke  V.  Oxley^  is  often  cited  to  the  proposition 

1  Smith  V.  Eussell,   20  Colo.  App.   554,  80  P.  474;   see  Brown  v.  San 

Francisco  Sav.  Union,  134  Gal.  448,  66  P.  592;   Clark  v.  Harmer, 

5  App.  D.  C.  114,  option  to  redeliver. 

2  Byrne  v.  Van  Tienhoven,  5  C.  P.  Div.  344,  49  L.  E.  C.  P.  316,  42  L.  T. 

(N.  S.)  371,  44  J.  P.  667;  Wheat  v.  Cross,  31  Md.  99,  1  Am.  Eep.  28, 
letters  crossing  in  mail;  unless,  of  course,  the  option  provides  other- 
wise, or  where  the  answer  is  required  by  return  post,  Maclay  v. 
Harvey,  90  Ul.  525,  32  Am.  Dee.  35;  Bernard  v.  Torrance,  5  Gill. 

6  J.  (Md.)  383;  Taylor  v.  Eennie,  35  Barb.  272,  22  How.  Pr.  101; 
Kempner  v.  Cohn,  47  Ark.  519,  1  S.  W.  869,  58  Am.  Dec.  775. 

3  Patrick  v.  Bowman,  149  U.  S.  411,  37  L.  Ed.  790,  13  Sup.  Ct.  811; 

Kempner  v.  Cohn,  supra;  Trevor  v.  Wood,  36  N.  Y.  307,  93  Am.  Dec. 
511. 
See  Linn  v.  McLean,  80  Ala.  360,  acceptance  can  not  be  retracted  after 
deposit  in  mail.   The  acceptance  is  good  though  the  letter  not  received 
by  the  proposer,  Washburn  v.  Fletcher,  42  Wis.  152;  see  Sec.  818-819. 

4  Cooke  V.  Oxley,  3  Term.  Eep.  653,  100  Eng.  Eeprint  785. 

In  Boston  etc.  E.  Co.  v.  Bartlett,  3  Cush.  (Mass.)  224,  it  is  said  the 
Cooke  case  is  inaccurately  reported  and  that,  in  fact,  there  was  no 
acceptance.  The  Cooke  decision  was  not  followed.  See,  also,  Ide  v. 
Leiser,  10  Mont.  5,  24  P.  695,  24  A.  S.  E.  17;  Cooper  v.  Lansing 
Wheel  Co.,  94  Mich.  272,  54  N.  W.  39,  34  A.  S.  E.  341. 


§  704  LAW  OF  OPTION  CONTRACTS  268 

that  notice  of  withdrawal  is  unnecessary.  It  is 
doubtful,  however,  if  the  decision  goes  that  far,  but 
if  it  does,  it  is  not  in  accord  with  the  law  either  in 
England  or  America  at  the  present  time.^  All  this 
case  holds  is  that  a  party  who  gives  time  to  another 
to  accept  or  reject  a  proposal,  is  not  bound  to  wait 
until  the  time  expires,  but  in  the  absence  of  a  pre- 
vious acceptance,  may  withdraw  the  proposal 
before  the  expiration  of  the  time.^ 

Where  the  option  is  supported  by  a  consideration 
but  does  not  expressly  fix  a  definite  time  limit,  the 
option  may  not  be  revoked  by  the  optionor  during 

5  Smith  V.  Russell,  20  Colo.  App.  554,  80  P.  474 ;   Frank  v.  Stratf  ord- 

Handcock,  13  Wyo.  37,  77  P.  134,  110  A.  S.  E.  963,  67  L.  R.  A.  571. 

In  Noble  v.  Mann,  32  Ky.  L.  Rep.  30,  105  S.  W.  152,  it  was  said  a 
sale  and  conveyance  by  the  optionor  was  a  withdrawal,  although  the 
optionee  had  no  notice  of  its  ' '  terms. ' '  See  Collison  v.  Lettsom, 
6  Taunt.  224,  2  Marsh  1,  128  Eng.  Reprint  1020. 

Recording  deed  of  conveyance  of  optioned  property  is  not  notice  to 
optionee  of  revocation.  Smith  v.  Russell,  20  Colo.  App.  554,  80  P.  474. 

In  McCauley  v.  Coe,  150  El.  311,  37  N.  E.  232,  the  deed  of  the  prem- 
ises, their  subdivision,  and  suit  to  remove  cloud,  were  after  the 
expiration  of  the  fixed  time  limit. 

Sprague  v.  Schotte,  48  Ore.  609,  87  P.  1046,  turned  on  the  point  that 
the  defendant  was  a  purchaser  with  notice  of  the  option  and  that, 
therefore,  a  sale  to  him  was  a  revocation  in  law,  although  the 
optionee  had  not  actual  notice  of  the  sale  or  of  the  revocation. 

6  Stevenson  v.  McLean,  5  Q.  B.  D.  346,  and  holding  ' '  that  an  uncom- 

municated  revocation  is  for  all  practical  purposes  and  in  point  of 
law,  no  revocation  at  all."  See,  also,  Kempner  v.  Cohn,  47  Ark.  519, 
1  S.  W.  869,  58  Am.  Rep.  775. 
The  decisions  cited  involved  pure  offers,  not  option  contracts.  The 
latter  may  not  be  withdrawn  during  the  time  limit.  The  rule  of 
revocation  has  no  application.  Acceptance  of  offers  as  constituting 
a  contract  is  founded  on  the  presumption  that  the  offeree  renews 
his  offer  every  moment  of  the  time  limit,  or,  if  no  time  be  limited, 
then  for  a  reasonable  time,  and  that  the  offeree  may  accept  at  any 
of  the  "moments"  unless  prior  to  the  expiration  of  the  time  the 
offerer  does  some  act  inconsistent  wdth  the  presumption  of  ' '  re- 
newals."  Where  this  occurs,  the  aggregatio  memtium  necessary  to 
a  contract  cannot  arise,  see  Larmon  v.  Jordan,  56  111.  204. 


269  WITHDRAWAL — NOTICE   OF  §  704 

what  would  be  considered,  upon  all  of  the  facts,  a 
reasonable  time  for  its  duration,  in  accordance  with 
the  rule  that  where  the  time  limit  is  not  prescribed 
by  the  option  the  law  fixes  a  reasonable  time/  It 
is  said,  however,  in  one  case^  that  it  is  only  when 
the  limitation  is  fixed  and  definite  that  the  right  of 
revocation  is  suspended,  but  in  the  case  referred 
to  there  was  a  fixed  time  limit  and  the  question 
before  the  court  was  concerning  the  right  of  a 
lessor  to  revoke  an  option  in  a  lease  after  the 
expiration  of  the  term  of  the  lease,  a  right  which 
the  lessor  undoubtedly  had,  not,  however  because 
the  time  limit  was  or  was  not  fixed,  but  because  the 
express  time  limit  had  expired. 

When  acceptance  and  withdrawal  under  an  offer 
are  simultaneous,  it  seems  the  withdrawal  will  be 
given  precedence  over  the  acceptance  and,  conse- 
quently, no  contract  will  be  raised  by  such  an 
acceptance.^  This  rule,  however,  does  not  apply  to 

7  See  Larmon  v.  Jordan,  56  HI.  204;  Bowen  v.  McCarthy,  85  Mich.  26, 
48  N.  W.  155.  But  notice  of  withdrawal  is  not  necessary  in  such 
cases  either  as  to  offers  or  options.  The  option  expires  by  efilux  of 
a  reasonable  time,  see  Mossie  v.  Cyrus,  61  Ore.  17,  119  P.  485,  624. 
It  would  seem  to  be  otherwise  where  the  option  is  indeterminate  as 
to  time  and  takes  the  form  of  an  escrow,  in  which  case  reasonable 
notice  is  necessary,  Stone  v.  Snell,  77  Neb.  441,  109  N.  W.  750;  and 
probably  in  all  cases  of  indeterminate  time  when  the  optionor  desires 
to  foreclose  the  question  of  reasonable  time. 
Commencement  of  action  by  optionor  to  recover  the  optioned  property 
is  suflScient  notice  of  termination  of  option  when  an  indefinite  exten- 
sion has  been  given,  Montgomery  v.  Waldeck,  2  Alaska  581. 

sMcCauley  v.  Coe,  150  111.  311,  37  N.  E.  232. 
In  Minn.  etc.  Ey.  Co.  v.  Columbus  etc.  Co.,  119  U.  S.  149,  30  L.  Ed.  376, 
7  Sup.  Ct.  168,  there  was  no  consideration  to  support  the  offer.    The 
acceptance   varied   from   the   offer   and   was   withdrawn   before   the 
expiration  of  the  time  limit. 

9  Head  v.  Diggon,  3  M.  &  Ey.  97,  7  L.  J.  (O.  S.)  K.  B.  36;  see  Storch 
V.  Duhnke,  76  Minn.  521,  79  N.  W.  533. 


§  705  LAW  OP  OPTION  CONTRACTS  270 

an  option  supported  by  a  consideration,  since, 
under  the  option,  the  right  of  withdrawal  does  not 
arise  at  all.  The  option  expires  by  lapse  of  the 
stipulated  time,  if  there  is  no  seasonable  and  proper 
election/^ 

Sec.  705.  WHAT  CONSTITUTES  REVOCA- 
TION. NOTICE  THEREOF.— If  the  option  is 
without  consideration,  that  is,  a  mere  offer,  any 
overt  act  on  the  part  of  the  optionor  clearly  show- 
ing his  intention  to  revoke,  is  sufficient  to  work  a 
revocation,  if  the  optionee  has  knowledge  of  such 
act  prior  to  his  acceptance.^ 

What  acts  are  sufficient  to  constitute  notice  is 
one  of  fact  and,  of  course,  will  depend  upon  the 
particular  case.  Where  a  deed  was  deposited  with 
a  bank  on  an  understanding  that  it  was  to  be  deliv- 
ered to  the  grantee  on  his  payment  of  the  considera- 
tion within  a  specified  time,  notice  to  the  bank 
withdrawing  the  offer  did  not  amount  to  notice  to 
the  grantee.^  Neither  is  the  record  of  a  deed  under 
the  recording  acts  constructive  notice  to  the  offeree 
of  a  revocation.^ 

10  See  Sec.  707. 

1  See  Coleman  v.  Applegarth,  68  Md.  21,  11  Atl.  284,  6  A.  S.  R.  417; 

Connor  v.  Eenneker,  25  S.  C.  514;   Ellsworth  v.  Minn.  R.  Ex.  Co., 

31  Minn.  543,  18  N.  W.  882 ;  Eclipse  Oil  Co.  v.  South  Penn   Oil  Co., 

47   W.   Va.   84,  34   S.   E.   923,   giving   second   lease   and   possession 

thereunder. 
But  making  a  similar   offer  to  a   third   person  is  not  a  withdrawal, 

Prior  V.  Hilton  &  D.  L.  Co.,  141  Ga.  117,  80  S.  E.  559,  560. 
Where  the  alleged  purchaser  knew  nothing  of  the  oflfer  to  convey  land, 

a  withdrawal  is  effective  without  notice  to  him,  Brown  v.  Farmers 

&  M.  Nat'l  Bank,  (Kan.)  147  P.  537. 

2  Smith  V.  Russell,  20  Colo.  App.  554,  80  P.  474. 


271  WITHDRAWAL — NOTICE   OP  §  705 

In  an  Illinois  case,^  it  is  held  the  sale  and  con- 
veyance of  the  premises,  the  subdivision  thereof, 
and  the  institution  of  a  suit  to  remove  the  option 
as  a  cloud,  evidenced  an  intention  on  the  part  of 
the  offerer  to  revoke  and,  in  effect,  that  such  acts 
did  constitute  a  revocation.  This  statement  of  the 
rule  is  undoubtedly  correct  if  such  facts  are 
brought  to  the  knowledge  of  the  offeree.  In  the 
cited  case  the  option  was  contained  in  a  lease  of 
the  premises.  The  lessee  mortgaged  his  interest  in 
the  lease,  but  neither  the  lessee  nor  the  mortgagee 
elected  to  purchase  during  the  term.  The  lessor, 
about  two  months  after  the  expiration  of  the  term, 
conveyed  the  property  to  another  and  subsequently 
repurchased  and  subdivided  it,  and  then  brought 
suit  against  the  mortgagee  to  remove  the  cloud  on 
his  title.  The  court  held  that  if  the  right  to  exercise 
the  option  continued  after  the  expiration  of  the 
term,  it  could  be  withdrawn  by  the  lessor  at  any 
time,  and  that  the  above  acts  on  his  part  were  a 
revocation  and  cut  off  the  rights  of  the  lessee  and 
mortgagee. 

The  decisions  are  not  always  clear  on  the  point 
whether  there  is  a  revocation,  if  the  sale  and  con- 
veyance, or  other  act,  was  not  brought  to  the  knowl- 
edge of  the  offeree  ;^  but  what  we  believe  to  be  the 

3  McCauley  v.  Coe,  150  Ul.  311,  37  N.  E.  232,  the  option  was  withdrawn 
by  expiration  of  the  time  liniit;  Sec.  707. 

*  See  Larmon  v.  Jordan,  56  lU.  204;  Sprague  v.  Sehotte,  48  Ore.  609, 
87  P.  1046. 

Noble  V.  Mann,  32  Ky.  L.  Rep.  30,  105  S.  W.  152,  is  not  clear  on  the 
facts  reported,  but  it  is  implied  that  offeree  had  knowledge  of  the 
sale  if  not  of  its  ' '  terms, ' '  besides  there  was  no  actual  consideration. 

Beckman  v.  Waters,  3  Cal.  App.  734,  86  P.  997,  holds  that  suit  to  quiet 
title  against  optionee  is  sufficient  notice  of  teniiination  of  an  indef- 
inite extension  of  option. 


§  706  LAW  OF  OPTION  CONTRACTS  272 

established  rule  as  to  sales  and  conveyance  is  tliat 
a  sale  and  conveyance  of  the  premises,  by  the 
offerer,  amounts  to  a  revocation  only  where  the  sale 
is  made  in  good  faith  and  for  a  valuable  considera- 
tion, and  such  sale  is  brought  to  the  knowledge  of 
the  offeree  prior  to  his  acceptance.^  It  is  not  meant, 
however,  by  the  above  statement,  that  a  revocation 
can  be  made  only  by  a  sale  and  conveyance.  The 
general  rule,  as  first  above  stated,  is  that  a  revoca- 
tion can  be  worked  by  any  act  of  the  offerer  show- 
ing his  intention  to  revoke,  of  which  act  the  offeree 
has  notice,  before  acceptance. 

Sec.  706.  SAME.  CASES.— Refusal  to  deliver 
books  is  a  retraction  of  the  offer  to  sell  them.^  A 
statement  by  the  optionor  that  the  "deal  is  off," 

4  The  apparent  conflict  in  some  of  the  decisions  as  to  the  necessity  of 
notice  to  the  offeree  may  be  removed,  at  least  partially,  by  keeping 
in  mind  that  the  revocation,  unless  otherwise  provided  by  the  offer, 
may  be  a  formal  withdrawal  or  one  implied  from  acts. 

It  should  be  observed,  also,  that  the  right  of  withdrawal  or  of  revo- 
cation is  peculiar  to  offers,  or  so-called  options  unsupported  by 
consideration  or  not  under  seal.  There  is  no  such  thing  as  with- 
drawal or  revocation  of  a  real  option  contract.  The  subject  is  con- 
fused to  some  extent  by  the  use  of  the  word  "option"  in  the  sense 
of  "offer,"  or  vice  versa. 

6  Dickinson  v.  Dodds,  L.  E.,  2  Ch.  Div.  463,  34  L.  T.  (N.  S.)  607;  Frank 
V.  Stratford-Handcock,  13  Wyo.  37,  77  P.  134,  110  A.  S.  R.  963, 
67  L.  R.  A.  571;  Coleman  v.  Applegarth,  68  Md.  21,  11  Atl.  284, 
6  A.  S.  R.  417;  Davis  v.  Shaw,  21  Ont.  L.  Rep.  474,  15  Ont.  Wkly. 
Rep.  134,  16  Wkly.  Rep.  273. 

Giving  second  option  is  not  revocation  of  first  option,  Ward  v.  Davis, 
154  Mich.  413,  117  N.  W.  897. 

1  Craig  v.  Harper,  3  Cush.  (Mass.)  158.  The  word  "option"  in  the 
text  is  taken  from  the  decisions  cited,  and  means  an  offer,  or  a 
so-called  option,  without  consideration,  unless  the  context  shows 
otherwise. 


273  WITHDRAWAL NOTICE   OP  §  706 

and  his  refusal  to  sign  the  deed,  is  a  revocation.^ 
A  contract  reciting  that  on  paj^nent  of  two  notes 
at  maturity,  the  maker  shall  have  the  exclusive 
option  to  purchase  land  at  a  fixed  price,  was 
rescinded  by  the  payee  notifying  the  maker  that 
his  right  to  the  option  was  terminated  by  his 
failure  to  pay  the  second  note.* 

Where  the  option  to  purchase  is  contained  in  a 
lease,  the  mere  sending  of  a  letter  by  the  lessor 
stating  that  the  balance  of  the  rent  in  arrears  must 
be  paid  by  a  certain  date,  and  asking  concerning 
the  lessee's  desire  to  continue,  is  not  a  forfeiture 
of  the  lease  or  of  the  option  to  purchase.* 

Demand  of  possession  by  a  vendor  made  pursu- 
ant to  a  provision  in  the  contract  of  sale,  is  equiva- 
lent to  the  exercise  by  him  of  the  option  to  forfeit 
the  contract.^ 

Refusal  of  the  optionor  to  perform,  before  any 
demand  is  made  on  him  by  the  optionee,  is  not  a 
renunciation  of  the  option  so  as  to  determine  the 
optionee's  rights  where  the  option  is  based  on  a 
valid  consideration.^ 

In  accordance  with  the  rule  that  the  withdrawal 
of  the  offer  must  be  brought  to  the  laiowledge  of 
the  offeree,  it  is  not  sufficient  to  leave  a  written 
notice  with  an  employee  of  the  offeree  who  had  no 
authority  to  receive  it.'^ 

2  Hay  V.  Mason,  141  Cal.  722,  75  P.  300. 

3  Title  Ins.  &  T.  Co.  v.  King  L.  &  L  Co.,  19  Cal.  App.  458,  126  P.  372. 

4  Gradle  v.  Warner,  140  HI.  123,  29  N.  E.  1118. 
6  Thiry  v.  Edson,  129  111.  App.  128, 

6  Solomon  Mier   Co.   v.   Hadden,   148   Mich.   488,   111   N.   W.   1040,   118 

A.  S.  R.  586,  12  Ann.  Cas.  88. 

7  Gross  V.  Arnold,  177  lU.  575,  52  N.  E.  867. 
18 — Option  Contracts. 


§  707  LAW  OF  OPTION  CONTRACTS  274 

Sec.  707.  EXPIRATION  OF  TIME  LIMIT. 
— The  right  of  the  optionee  to  elect  terminates 
upon  expiration  of  the  time  limit  where  that  is 
expressly  fixed  by  the  contract,  or  upon  the  expira- 
tion of  a  reasonable  time,  where  no  time  is  expressly 
specified.^  This  rule  applies  also  to  a  mere  offer, 
that  is,  an  offer  not  supported  by  a  consideration. 
The  rule  is  stated  by  the  Supreme  Court  of  the 
United  States  as  follows :  When  an  offer  is  made 
for  a  time  limited  in  the  offer  itself,  no  acceptance 
afterwards  will  make  it  binding ;  any  offer  without 
consideration  may  be  withdrawn,  at  any  time 
before  acceptance,  and  an  offer  which,  in  its  terms, 
limits  the  time  of  acceptance  is  withdrawn  by 
expiration  of  the  time.^ 

Where  the  time  limit  is  expressly  fixed  by  the 
terms  of  the  option  contract  no  formal  notice  of 
withdrawal  is  necessary.^  The  offer  or  option 
lapses  by  efflux  of  time,  and,  in  the  absence  of  a 

1  See  Sees.  856  et  seq. ;  Eees  v.  Fellow,  97  Fed.  167,  38  C.  C.  A.  94; 

Stewart  v.  Gardner,  152  Ky.  120,  153  S.  W.  3;  Mossie  v.  Cyrus,  61 
Ore.  17,  119  P.  485,  without  notice;  Standard  Box  Co.  v.  Mut.  Bis- 
cuit Co.,  10  Gal.  App.  746,  103  P.  938. 
.     Bowen  v.  McCarthy,  85  Mich.  26,  48  N.  W.  155,  cash  payment  after 
expiration  of  reasonable  time,  insufficient,  though  offer  not  withdrawn. 

2  Waterman  v.  Banks,  144  U.  S.  394,  36  L.  Ed.  479,  12  S.  Gt.  646;  also 

Minn.  etc.  Ry.  Go.  v.  Columbus  etc.  Co.,  119  U.  S.  149,  30  L.  Ed.  376, 
7  S.  Ct.  168 ;  Richardson  v.  Hardwick,  106  U.  S.  252,  27  L.  Ed.  145, 
1  S.  Ct.  213. 

3  Barney  v.  Yazoo  Delta  L.  Co.,  179  Ind.  337,  101  N.  E.  96;  Cummings 

V.  Town  etc.  Co.,  86  Wis.  382,  57  N.  W.  43 ;  Nelson  v.  Stephens,  107 
Wis.  136,  82  N.  W.  163;  Womaek  v.  Coleman,  92  Minn.  328,  100 
N.  W.  9;  Dyer  v.  Duffy,  39  W.  Va.  148,  19  S.  E.  540,  24  L.  R.  A.  339; 
Commercial  Bank  v.  Weldon,  148  Gal.  601,  84  P.  171;  Paterson  v. 
Houghton,  49  Manitoba  168. 


275  OPTION  TO  TERMINATE  §  708 

timely  election,  the  rights  of  the  optionee  are  at 
an  end.* 


Sec.  708.  RESERVATION  OF  RIGHT  TO 
TERMINATE. — Where  an  option  in  a  lease  con- 
tains a  clause  giving  the  optionee  the  right  to 
terminate  the  lease,  and  provides  that  the  ter- 
mination of  the  lease  shall  end  the  option  right, 
failure  to  pay  the  rentals  under  the  lease  cuts  off 
all  rights  of  the  optionee  under  the  option.^  So, 
where  the  option  gives  the  optionee  the  right  to 
investigate  and  determine  the  sufficiency  and  prac- 
ticability of  a  water  supply,  notice  to  the  optionor 
that  the  optionee  has  determined  that  the  water 
supply  is  insufficient  and  not  practicable,  ends  the 
option  agreement.^ 

Leases  frequently  contain  a  provision  giving  the 
lessor  the  right  to  terminate  the  lease  and  the 
option  contained  therein,  in  case  of  sale  of  the 
premises  by  the  lessor.  To  entitle  the  lessor  to  such 
right  the  sale  must  be  bona  fide.  Accordingly,  a 
gift  of  the  property  by  the  lessor  to  her  son  does 
not  terminate  the  rights  of  the  lessee.^    And  it 

4  Spaflford  v.  Hedges,  231  111.  140,  83  N.  E.  129,  acceptance  fifteen  years 
after  expiration  of  time  limit;  Moore  v.  Allen.  109  Minn.  139,  123 
N.  W.  292;  Hay  v.  Mason,  141  Cal.  722,  75  P.  300;  Canty  v.  Brown, 
11  Cal.  App.  487,  105  P.  428. 

1  Ober  V.  Brooks,  162  Mass.  102,  38  N.  E.  429. 

2  Gard  v.  Thompson,  21  Idaho  485,  123  P.  497. 

3  Knowles  v.   Hull,   97   Mass.   206;   note   1,   Sec.   834;    Ogle  v.   Hubbel, 

1  Cal.  App.  357,  82  P.  217. 
See,  however,  Elston  v.  Schilling,  42  N.  Y.  79,  lease  with  option  to 
renew,  holding  a  conveyance  by  way  of  advancement  was  a  ' '  dis- 
posal" and  therefore  a  termination  of  the  option  right.  Also,  Ewing 
V.  Miles,  12  Tex.  Civ.  App.  19,  33  S.  W.  235,  holding  sale  by  one  of 
several  lessees  did  not  defeat  right  of  renewal. 


§  709  LAW  OF  OPTION   CONTRACTS  276 

seems  the  lessor  may  exercise  the  right  to  cancel  a 
lease  notwithstanding  he  no  longer  has  the  title,  it 
having  been  conveyed  to  the  purchaser.^ 

Where  a  lease  reserves  to  the  lessor  the  right  to 
sell  the  leased  lands  and  to  terminate  the  lease,  at 
the  end  of  any  rental  year,  on  six  months'  notice, 
and  gives  the  lessee  the  privilege  of  buying  at  a 
price  to  be  set  by  the  lessor,  and  which  might  be 
offered  for  the  land  by  a  third  party,  the  lessee  is 
given  the  option  to  purchase  only  in  case  the  lessor 
elects  to  terminate  the  lease  by  making  a  sale.^  If, 
after  notice  of  sale,  or  of  an  offer  by  a  third  person, 
the  optionee  makes  no  election  to  purchase,  his 
right  to  do  so  is  at  an  end,*^  and  this  is  true  even 
where  the  term  of  the  lease  had  not  expired,  the 
circumstances  showing  the  refusal  was  absolute 
and  definite/ 

Sec.  709.  DEATH  OR  INSANITY.  BANK- 
RUPTCY.— The  rule  of  law  with  reference  to 
mere  offers  is  that  the  death  or  insanity  of  either 
party  before  acceptance  causes  the  offer  to  lapse.^ 

4  Lewis  V.  Agoure,  8  Cal.  App.  146,  96  P.  327. 

5  Devitt  V.  Kaufman  County,  27  Tex.  Civ.  App.  332,  66  S.  W.  224. 
-  6  Harding  v.  Gibbs,  125  HI.  85,  17  N.  E.  60,  8  A.  S.  E.  345. 

Clause  in  oil  and  mining  lease  permitting  either  party  to  terminate 
and  providing  that  thereafter  lease  shall  be  null  and  void,  etc., 
Eclipse  Oil  Co.  v.  South  Penn  Oil  Co.,  47  W.  Va.  84,  34  S.  E.  923. 

7  Weber  v.  Grand  Lodge,  169  Fed.  522,  95  C.  C.  A.  20,  171  Fed.  839, 
96  C.  C.  A.  410,  in  this  case  the  lessee  sought  to  take  advantage  of 
the  lessor 's  immediate  renting  of  the  premises  to  third  parties. 

1  Wallace  v.  Townsend,  43  Ohio  St.  537,  3  N.  E.  601 ;  Coleman  v.  Apple- 
garth,  68  Md.  21,  11  Atl.  284,  6  A.  S.  E.  417;  see  Newton  v.  Newton, 
11  E.  I.  390,  23  Am.  Rep.  476;  Sutherland  v.  Parkins,  75  111.  338; 
Dickinson  v.  Dodds,  L.  R.,  2  Ch.  Div.  463,  34  L.  T.  (N.  S.)  607; 
Einer  v.  Husted  's  Estate,  13  Colo.  App.  523,  58  P.  793. 


277  DISCHARGE  BY  DEATH  OR  INSANITY         §  709 

This  rule,  however,  does  not  apply  to  a  real  option 
contract.  The  distinction  is  placed  on  the  ground 
that  if  the  intestate  (optionor)  could  not  have 
revoked  the  option  during  his  life  time,  his  heirs 
or  legal  representatives  have  no  greater  right,  and 
where  an  option  is  supported  by  a  consideration 
and,  therefore,  not  revocable  during  its  time  limit, 
it  is  not  revoked  by  the  death  of  the  optionor.^  The 
death  of  the  optionee  does  not  discharge  an  option 
supported  by  a  consideration,  unless,  of  course, 
under  the  rule  of  assignability,  the  option  right 
does  not  survive.^ 

The  bankruptcy,  before  the  time  arrives,  of  one 
who  has  promised  to  return  the  amount  paid  for 
corporate  stock,  if  it  is  surrendered  within  a  cer- 
tain time,  does  not  prevent  the  claim  upon  the 
contract  from  being  a  fixed  liability,  absolutely 
owing,  at  the  time  of  the  bankruptcy,  and  is  prov- 
able imder  the  bankruptcy  act,  since  the  promisee 
may  treat  the  bankruptcy  as  a   repudiation  of 

2  Mueller  v.  Nortmann,  116  Wis.  468,  93  N.  W.  538,  96  A.  S.  E.  997; 
Rockland  etc,  Co.  v.  Leary,  203  N.  Y.  469,  97  N.  E.  43,  Ann.  Gas. 
1913B,  62,  lease,  bound  heirs,  etc.,  of  parties. 
See  Prince  v.  Eobinson,  14  Fed.  631;  State  v.  Worthington,  7  Ohio  171, 
alternation  of  contract;  Buckwalter  v.  Klein,  5  Ohio  Dee.  55,  lease 
and  option;  Ripley  v.  Waterworth,  7  Ves.  Jr.  425,  32  Eng.  Reprint 
172. 
Case  where  optionee  became  insane  after  notice  by  optionor  to  him 
under  agreement  by  which  one  partner  gave  the  other  the  right  of 
"pre-emption"  on  his  share,  Rowlands  v.  Evans,  31  L.  J.  Ch.  265, 
30  Beav.  302,  8  Jur.  (N.  S.)  88,  54  Eng.  Reprint  905. 

8  See  Sees.  604  et  seq.;  see  Parker  v.  Seeley,  56  N.  J.  Eq.  110,  38  Atl. 
280,  devisee  and  optionee  under  will  died  and  it  was  held  that  as  the 
trustee  under  the  will  knew  it  was  his  intention  to  elect,  there  was 
an  election,  though  never  formally  made. 


§  710  LAW  OP  OPTION  CONTRACTS  278 

liability  and  immediately  bring  an  action  for  dam- 
ages.* 

Sec.  710.  ABANDONMENT.  SURRENDER. 
— Where  the  optionee,  before  the  expiration  of  the 
time  limit,  surrenders  or  abandons  his  rights  under 
the  option,  the  optionor  undoubtedly  has  the  right 
to  consider  the  option  contract  at  an  end,^  and  it 
follows  that  thereafter  the  optionee  may  not  exer- 
cise his  right  to  purchase,^  and  has  no  claim  for 
damages  arising  out  of  the  option,^  and  is  estopped 

4  In  re  Neff,  157  Fed.  57,  84  C.  C.  A.  561,  28  L.  E.  A.  (N.  S.)  349,  citing 
In  re  Swift,  112  Fed.  315,  50  C.  C.  A.  264;  In  re  Pettingill,  137  Fed. 
147. 
The  trustee  in  bankruptcy  is  bound  by  the  contracts  of  the  bankrupt  in 
the  form  of  sale  and  return  and  as  to  purchases  on  approval,  In  re 
Miller  v.  Brown,  135  Fed.  868 ;  In  re  Nicholas,  122  Fed.  299 ;  In  re 
Paper  Co.,  147  Fed.  858. 

iHopwood  V.  McCausland,  120  Iowa  218,  94  N.  W.  469;  Sandberg  v. 
Light,  55  Wash.  189,  104  P.  205;  Meidling  v.  Trefz,  48  N.  J.  Eq. 
638,  23  Atl.  824,  optionor  was  led  to  believe  optionee  had  aban- 
doned ;  Eace  v.  Groves,  43  N.  J.  Eq.  284,  7  Atl.  667,  estopped ;  Weber 
V.  Lodge,  169  Fed.  522,  95  C.  C.  A.  20,  s.  c.  171  Fed.  839,  96  C.  C.  A. 
410;  Kruegel  v.  Berry,  75  Tex.  230,  9  S.  W.  863;  Williams  v. 
Williams,  17  Beav.  213,  51  Eng.  Eeprint  1015,  9  Eng.  Eul.  Gas.  493 ; 
Gathright  v.  H.  M.  Byllesby  &  Co.,  154  Ky.  106,  157  S.  W.  45,  by 
ordinance  before  expiration. 

Waiver  or  abandonment  may  be  manifested  by  words  or  acts,  but  all 
the  attending  facts  must  show  an  intentional  relinquishment,  Boyden 
V.  Hill,  198  Mass.  477,  85  N.  E.  413. 

What  amounts  to  assent  to  surrender  of  leased  premises,  Hayes  v, 
Goldman,  71  Ark.  251,  72  S.  W.  563. 

Eefusal  by  optionor  to  sell  may  be  treated  as  an  abandonment,  Mont- 
gomery Gas  Light  Co.  v.  City,  87  Ala.  245,  6  So.  113,  4  L.  E.  A.  616. 

2  Sandberg  v.  Light,  55  Wash.  189,  104  P.  205;  see  Davis  v.  Petty,  147 
Mo.  374,  48  S.  W.  944;  Eagle  v.  Pettus,  109  Ark.  310,  159  S.  W.  1116. 

8  Darragh  v.  Vicknair,  126  La.  171,  52  So.  264,  for  failure  to  make  title. 


279  ABANDONMENT — SURRENDER  §  710 

to  ask  for  specific  performance/  Just  what  acts 
have  such  effect  are  relative  to  each  case  and  often 
afford  sufficient  grounds  to  invoke  the  rule  of 
estoppel.  Thus,  an  optionee  told  the  optionor  some 
days  before  the  expiration  of  the  time  limit,  that 
he  could  not  raise  the  money  to  pay  the  price,  and 
that  unless  the  optionor  should  grant  an  extension, 
the  option  would  be  abandoned.  The  optionor 
refused  to  grant  the  extension  and,  in  reliance  on 
the  statement,  made  valuable  improvements  and 
leased  the  land,  and  it  was  held  the  optionee  was 
estopped.^  Where  the  holder  of  an  option  to  pur- 
chase land  upon  as  low  terms  as  should  be  offered 
by  any  other  person,  refused  to  purchase  at  the 
price  offered  by  another,  he  could  not,  after  a  sale 
was  made  upon  such  offer,  maintain  a  bill  for 
specific  performance  and  cancellation  of  the  deed 
to  the  purchaser.^ 

Payment  of  rent  by  a  tenant  after  exercising  his 
option,  where  the  payment  is  compulsory  under 
the  terms  of  the  agreement,  does  not  work  an 
abandonment  of  the  option.^ 

There  is  a  surrender  of  the  option  to  purchase  a 
mine  where  the  optionee  signifies  his  intention  to 
surrender  it  and  to  forfeit  his  rights,  and  the 
optionor  thereupon  takes  and  continues  to  hold 
possession.'^  But  an  option  in  a  lease  is  not  surren- 

4  Milmoe  v.  Murphy,  65  N.  J.  Eq.  767,  56  Atl.  292 ;  Kentucky  Iron  etc. 

Co.  V.  Adams,  32  Ky.  L.  Kep.  823,  106  S.  W.  1198;   May  v.  Getty, 
140  N.  C.  310,  53  S.  E.  75;  see  Sec.  1248,  note  8. 

5  Cummings  v.  Nielson,  42  Utah  157,  129  P.  619. 

6  Walshe  v.  Endom,  129  La.  148,  55  So.  744. 

7K.   P.   Min.   Co.   V.   Jacobson,   30   Utah   115,   83   P.   728,   4   L.   R.   A. 
(N.  S.)  755. 


§  710  LAW  OF  OPTION  CONTRACTS  280 

dered  by  the  fact  that  the  optionee  takes  a  new 
lease  before  the  expiration  of  the  term  of  the  old 
one,  which  he  still  retains,  even  though  the  new 
lease  did  not  contain  the  option  clause,  the  purpose 
of  the  new  lease  being,  as  it  would  seem,  merely  to 
add  some  additional  restrictive  clauses.^ 

The  question  of  abandonment  is  one  of  fact,®  but 
what  facts  amount  to  abandonment  is  a  question  of 
law/®  Proof  of  conduct  constituting  abandonment 
must  be  positive,  unequivocal,  and  inconsistent 
with  the  option  contract/^  The  burden  of  proof  is 
on  the  optionor.^^ 

8  Lester  Agricultural  Works  v.  Selby,  68  N.  J.  Eq.  271,  59  Atl.  247; 

also  Wade  v.  So.  Penn  Oil  Co.,  45  W.  Va.  380,  32  S.  E.  169. 
See  Conner  v.  Clapp,   37  Wash.   299,   79   P.  929,   holding   option  not 
surrendered   by  arrangement   to   make   option   subject   to   mortgage 
given  by  optionor. 

Riee  v.  Lincoln  etc.  R.  Co.,  88  Neb.  307,  129  N.  W.  425,  holding  option 
on  additional  land  not  surrendered  by  completing  purchase  for  other 
land,  though  option  and  agreement  of  purchase  were  in  same 
instrument. 

9  Cambria  Iron  Co.  v.  Leidy,  226  Pa.  122,  75  Atl.  186 ;  Boyden  v.  Hill, 

198  Mass.  477,  85  N.  E.  413;  Eagle  v.  Pettus,  109  Ark.  310,  159  S.  W. 
1116. 

10  Sitterding  v.  Grizzard,  114  N.  C.  108,  19  S.  E.  92. 

11  Sitterding  v.  Grizzard,  114  N.  C.  108,  19  S.  E.  92;  see  McCormick  v. 

Stephany,  61  N.  J.  Eq.  208,  48  Atl.  25;  Victor  Safe  Co.  v.  O'Neil, 
48  Wash.  176,  93  P.  214. 

12  Boyden  v.  Hill,  198  Mass.  477,  85  N.  E.  413. 

Abandonment  of  oil  and  mineral  lease  by  failure  to  develop  and 
operate  so  as  to  yield  royalty.  Berry  v.  Frisbie,  120  Ky.  337,  86  S.  W. 
558,  27  Ky.  L.  Rep.  724;  Clark  v.  Gordon,  35  W.  Va.  735,  14  S.  E. 
255,  authority  of  agent  to  abandon. 

A  rescission  by  express  words  is  called  '  *  surrender  in  fact ' '  and  when 
by  acts  a  "surrender  in  law."  Parol  surrender  of  oil  lease  before 
possession  is  taken  is  not  within  the  Statute  of  Frauds,  Hooks  v. 
Forst,  165  Pa.  238,  30  Atl.  846;  power  of  president  of  corporation 
lessee  to  surrender  lease  and  option,  Lester  Agi-icultural  Chemical 
Works  V.  Selby,  supra. 


281  DISCHARGE — RENUNCIATION  §  711 

Sec.  711.  RENUNCIATION.— It  is  elementary 
that  renunciation  of  a  contract  by  one  party  before 
time  of  performance  has  arrived,  does  not  dis- 
charge the  contract  unless  the  other  party  elects 
to  deem  it  such.^  The  renunciation  must  be  posi- 
tive and  unqualified,  and  have  reference  to  matters 
the  non-performance  of  which,  at  the  time  called 
for,  would  operate  as  a  discharge.^ 

Refusal  of  the  optionor  to  perform  before  any 
demand  is  made  on  him  by  the  optionee,  is  not  a 
renunciation  of  the  option,  nor  does  it  determine 
the  rights  of  the  optionee  where  the  option  is  based 
on  a  valid  consideration  moving  to  the  optionor.^ 
An  offer  of  a  lesser  price  for  land  by  the  optionee, 
is  not  a  refusal  to  take  at  the  option  price  so  as  to 
terminate  the  option.* 

1  And,  of  course,  the  party  renouncing  will  not  be  discharged  without 

the  consent  of  the  other  party,  Main  St.  &  A.  P.  E.  Co.  v.  Los  Angeles 
Traction  Co.,  129  Cal.  301,  61  P.  937. 

2  An  unqualified  and  positive  refusal  to  perform  a  contract,  though  the 

performance  thereof  is  not  yet  due,  may,  if  the  renunciation  goes 
to  the  whole  contract,  be  treated  as  a  complete  breach,  which  will 
entitle  the  injured  party  to  bring  his  action  at  once,  Roehm  v. 
Horst,  178  U.  8.  1,  44  L.  Ed.  953,  20  S.  Ct.  780,  following  Rochester 
V.  De  La  Tour,  2  El.  &  Bl.  678,  6  Eng.  Rul.  Cases  576 ;  see  Sec.  702. 

The  effect  of  a  renunciation  is  to  dispense  with  an  offer  to  perform  if 
the  renunciation  is  not  retracted  before  the  time  of  performance 
arrives,  Stanford  v.  McGill,  6  N.  D.  536,  72  N.  W.  938,  38  L.  R.  A. 
760,  (conflicting  decisions  reviewed). 

But  it  is  held  the  rule  does  not  apply  to  conditions  precedent,  Thomson  v. 
Kyle,  39  Fla.  582,  23  So.  12,  63  A.  S.  R.  193,  and  it  is  believed  the 
renunciation  by  an  optionor  does  not  dispense  with  election  by  the 
optionee  desiring  to  enforce  the  option.   See  Sees.  868  et  seq. 

8  Solomon   Mier  Co.  v.   Hadden,   148   Mich.   488,   111   N.  W.   1040,   118 
A.  S.  R.  586,  12  Ann.  Gas.  88. 

4  Baxter  v.  Calhoun,  222  Fed.  111. 


§  712  LAW  OF  OPTION  CONTRACTS  282 

Sec.  712.  RESCISSION.— A  contract  may  be 
rescinded  by  mutual  agreement  of  the  parties,  and 
it  may  also  be  rescinded  by  one  of  the  parties  where 
his  assent  thereto  was  not  free,  and  also,  in  certain 
other  cases,  where  the  consideration  becomes 
entirely  void  or  partly  or  wholly  fails. 

Technically  speaking,  rescission  is  the  unmaking 
of  a  contract,  and  its  legal  effect  is  to  restore  each 
party  to  the  condition  in  which  he  was  before  the 
contract  was  made,  so  far  as  that  is  possible,  and 
to  leave  the  parties  without  any  rights  growing  out 
of  the  contract  itself.  But  there  are  certain  acts 
on  the  part  of  one  of  the  parties  which  give  the 
other  the  right  to  terminate  and  end  the  contract, 
and  still  leave  the  contract  alive  for  the  purpose 
of  fixing  the  rights  and  liabilities  of  the  respective 
parties.^  Abandonment,  surrender,  and  breach  of 
contract  are  such  acts.  The  law  on  this  branch  of 
the  subject  has  already  been  considered.  The 
decisions  of  the  court  involving  rescission  follow. 

A  mere  request  by  one  of  the  parties  to  the 
option,  for  an  alteration  or  modification  of  an 
accepted  option,  is  not  a  breach  thereof  giving  a 
right  of  rescission  thereof  or  an  action  thereon.^ 

Where  defendants  have  only  an  option  to  pur- 
chase certain  land,  and  agree  to  convey  to  plaintiff 
on  February  1,  1903,  under  a  contract  of  which 
time  was  the  essence,  and  defendants'  vendors 
were  not  bound  to  convey  to  them  or  surrender 
until  March  1,  1903,  defendants  having  no  title  to 
the  property  on  February  1, 1903,  and  being  unable 

1  Clark  V.  American  Developing  &  M.  Co.,  28  Mont.  468,  72  P.  978,  980. 

2  Turner  v.  McCormick,  56  W.  Va.  161,  49  S.  E.  28,  107  A.  S.  K.  904, 

67  L.  R.  A.  853. 


283  RESCISSION  §  712 

to  convey  on  tliat  date,  their  breacli  of  tlie  contract 
entitled  the  plaintiff  to  rescission.^ 

The  fact  that  after  the  optionee  gave  notice  of 
its  intention  to  purchase  water  works  the  source 
of  water  went  dry,  did  not  entitle  the  optionee  to 
rescind/ 

Where  an  agreement  for  the  sale  of  coal  provides 
that  the  option  should  last  only  for  nine  mouths, 
and,  on  the  last  day  of  the  nine  months,  the  optionor 
tenders  a  deed  and  demands  the  purchase  money, 
the  delay  of  the  optionee  in  paying  the  price  will 
not  enable  the  optionor  to  rescind  when  the 
optionee  objects  on  the  claim  that  there  are  defects 
in  the  title.^  But  the  optionee  is  not  entitled  to 
rescind  on  the  ground  that  the  title  to  the  property 
was  unmarketable  prior  to  the  expiration  of  the 
option  time,  without  offering  to  make  a  cash  pay- 
ment of  the  price  as  required  by  the  option,  to 
complete  the  purchase.® 

Where  both  parties  treat  the  option  as  in  force 
after  the  expiration  of  the  time  limit,  before  either 
party  can  declare  the  contract  at  an  end  and  put 
the  other  party  in  default,  he  must  have  performed 
and  notified  the  other  party  to  perform  or  that  the 

3  Primm  v.  Wise,  126  Iowa  528,  102  N.  W.  427. 

Burks  V.  Davies,  85  Cal.  110,  24  P.  613,  20  A.  S.  R.  213,  purchaser  may 
rescind  on  learning  of  default  in  title  (owner  had  option  only) 
when  purchaser  fails  to  perform. 

4  Cherryvale  Water  Co.  v.  City,  65  Kan.  219,  69  P.  176,  the  court  held 

the  city  was  estopped  on  the  facts. 

sPenn.  Min.  Co.  v.  Smith,  210  Pa.  49,  59  Atl.  316;  there  were  encum- 
brances on  this  property. 

«  Winter  v.  Bostwick,  172  Fed.  285. 


§  712  LAW  OF  OPTION  CONTRACTS  284 

contract  would  be  rescinded/  Mere  failure  to  pay 
the  purchase  money  according  to  the  terms  of  the 
agreement  will  not  authorize  a  suit  by  the  vendor 
to  rescind/ 

When,  after  the  price  of  the  land  became  due 
and  before  it  was  paid,  the  land  advanced  greatly 
in  value,  the  vendors  can  not  rescind  the  contract 
without  notice  of  their  intention  to  do  so,  if  pay- 
ment is  delayed,  nor  without  returning  payments 
which  have  been  advanced.* 

A  contract  giving  the  option  to  purchase  mining 
property,  can  not  be  rescinded  for  fraud  because 
of  erroneous  statements  made  by  the  seller  as  to 
the  quantity  of  ore  in  the  property  or  concerning 
the  title,  when  the  purchasers  were  to  take  posses- 
sion of  and  operate  the  property  for  several  months 
before  the  option  expired,  where  the  statements 
were  made  in  good  faith  and  expressed  the  honest 
opinion  of  the  optionors,  who  were  not  lawyers  and 
had  little  knowledge  of  practical  mining/ 

That  a  seller,  in  a  contract  containing  an  option 
to  purchase  personal  property,  failed  to  object  to 
conveying  until  advised  of  his  rights  under  the 
contract,  did  not  prevent  him  from  cancelling  the 

7  Kessler  v.  Pruitt,  14  Idaho  175,  93  P.  965;  Vance  v.  Newman,  72  Ark. 

359,  80  S.  W.  574,  105  A.  S.  E.  42,  without  notice  and  return  of 
payments  made. 

8  Vance  v.  Newman,  72  Ark.  359,  80  S.  W.  574,  105  A.  S.  E.  42 ;  see 

Keesler  v.  Pruitt,  14  Idaho  175,  93  P.  965. 

9  Winter  v.  Bostwick,   172   Fed.   285 ;   see  Morgan  County  Coal  Co.  v. 

Halderman,  254  Mo.  596,  163  S.  W.  828. 
Smith  V.  Detroit  etc.  Gold  Mining  Co.,   17  S.  D.  413,  97   N.   W.   17, 
holding   optionee   not   entitled   to   rescind    after   demonstrating    the 
unproductiveness   of   the   mine,   though   there   were   mistakes   as   to 
title  and  boundary  lines. 


285  RESCISSION  §  712 

contract  for  failure  of  the  buyer  to  exercise  the 
option  within  the  time  stipulated/*^  Delay  of  the 
optionee  for  two  and  one-half  years  to  exercise  the 
option,  entitles  the  optionor  to  cancellation, 
although  deed  was  to  be  made  on  fifty  days'  notice, 
and  first  payment  was  to  be  made  fifty  days  there- 
after/i 

Where  an  option  was  taken  on  a  parcel  of  land 
which  both  parties  believed  contained  four  hun- 
di^ed  acres,  when  in  fact  it  contained  only  two 
hundred  twenty-four  acres,  the  optionee  was 
entitled  to  rescind  for  mutual  mistake.  ^^ 

10  Neill  V.  Hitchman,  201  Pa.  207,  50  Atl.  987. 

11  Swank  v.  Fretts,  209  Pa.  625,  59  Atl.  264. 

12  McCrea  v.  Hinkson,  65  Ore.  132,  131  P.  1025. 

Facts  necessary  to  be  alleged,  Swanston  v.  Clark,  153  Cal.  300,  95  P. 

1117. 
Notice  held  not  to  amount  to  rescission,  Moore  v.  Beiseker,  147  Fed. 

367,  77  C.  C.  A.  545. 
When  seller  of  stock  agrees  to  repurchase,  within  a  certain  time,  at  a 

specified  price,  purchaser  is  given  the  right  to  rescind,   Hudson  v. 

Seeley,  19  Cal.  App,  213,  124  P.  1051. 

Agreement  to  rescind  option  without  consideration,  Jarvis  v.  Sutton, 
3  Ind.  289. 

Not  necessary  to  put  other  party  in  default  to  be  entitled  to  rescind, 
Jennings  etc.  Syndicate  v.  Oil  Company,  119  La.  793,  44  So.  481. 

Option  rescinded  on  notice  by  failure  to  pay  last  of  two  notes,  the 
contract  providing  that  optionee  should  have  option  to  purchase  land 
if  both  notes  were  paid.  Title  Ins.  &  T.  Co.  v.  King  L.  &  I.  Co.,  19 
Cal.  App.  458,  126  P.  372. 

Not  necessary  to  return  carcass  of  pony  optioned,  Lyons  v.  Stills,  97 
Tenn.  514,  37  S.  W.  280,  or  tender  identical  shares  of  stock,  Schultz 
V.  O'Eourke,  18  Mont.  418,  45  P.  634. 

The  fact  that  the  purchaser  of  stock  gave  the  seller  a  written  option 
on  the  stock  for  four  months  does  not  show,  as  a  matter  of  law, 
that  the  former  oral  agreement  to  repurchase  was  rescinded  or 
merged  in  the  new  bargain,  Corey  v.  Woodin,  195  Mass.  464,  81 
N.  E.  260. 


§  713  LAW  OF  OPTION  CONTRACTS  286 

Sec.  713.  SUBSTITUTION  OF  NEW  CON- 
TRACT OR  OF  NEW  TERM.— The  parties  to  an 
option  contract  may,  by  agreement  between  them, 
substitute  a  new  contract,  or  insert  a  new  stipula- 
tion in  the  old  contract.  In  the  former  case,  an 
entirely  new  contract  is  made.  In  the  latter,  a  new 
term  or  stipulation  is  introduced  into  the  old  con- 
tract. Extension  of  time  expressly  fixed  by  the 
original  option  contract  within  which  to  elect  is, 
according  to  some  cases,  the  substitution  of  a  new 
term.^  A  Michigan  case  furnishes  an  example  of 
the  substitution  of  a  new  contract.  An  option  for 
the  purchase  of  land  was  made  by  correspondence 
between  parties  residing  at  different  places.  The 
option  was  accepted  by  the  optionees  and  due 
notice  given  that  they  were  ready  to  take  a  deed 
of  conveyance.  The  optionors  prepared  the  deed 
and  one  of  them  took  it  to  the  place  of  residence  of 
the  optionees  to  consummate  the  agreement.  The 
optionees  then  asked  for  10  days'  further  time 
within  which  to  procure  the  money.  By  arrange- 
ment between  them  the  deed  was  left  in  escrow  with 
a  third  party  to  be  delivered  upon  payment  of  the 
money,  and  no  further  steps  were  taken  until  the 
last  day  provided  by  the  original  option,  and  it  was 
held  the  original  option  was  superseded  by  the 
subsequent  agreement,  and  that  the  optionees  lost 
their  right  to  purchase  by  their  failure  to  comply 
with  that  agreement.^ 

1  See,  as  to  extension,  Sees.  334,  412-413,  859-861. 

New   contract   held   to  be   an   extension   only   of   the   original   option, 
Standiford  v.  Kloman,  234  Pa.  443,  83  Atl,  311. 

2  Cleaves  v.  Walsh,  125  Mich.  638,  84  N.  W.  1108. 


287  DISCHARGE   BY   SUBSTITUTION  §§  714,  715 

An  option  to  assign  certain  judgments  was  held 
superseded  by  a  subsequent  contract  entered  into 
by  the  parties  after  the  time  for  the  performance 
of  the  option  had  expired  without  election,  the 
latter  contract  giving  the  optionee  the  right  to  pur- 
chase the  property  bought  in  by  the  judgment 
creditors  at  an  execution  sale.* 

Sec.  714.  BREACH  BY  OPTIONEE  PRIOR 
TO  ELECTION.— In  addition  to  election  and 
notice,  and  tender  when  necessary,  it  frequently 
happens  that  the  option  contract  contains  provi- 
sions requiring  the  optionee  to  do  some  other  act 
during  the  time  limit  of  the  option  contract.  If 
the  option  makes  the  performance  of  the  act  a 
condition  precedent  to  the  right  of  the  optionee  to 
elect,  his  failure  to  perform,  is  a  discharge  of  the 
option  contract  and  a  bar  to  the  enforcement  by 
him  of  the  option  right.  It  is  otherwise  when  the 
act  is  not  made  a  condition  precedent  or  the  breach 
is  waived  by  the  optionor. 

These  rules  are  illustrated  and  supported  by  the 
cases  cited  in  the  next  following  sections  of  this 
chapter. 

Sec.  715.  SAME.  FAILURE  TO  PAY  RENT 
AS  DISCHARGE  OF  OPTION  IN  LEASE.— 
A  lease  for  5  years  granted  the  tenant  the  privilege 
of  purchasing  the  leased  property  at  any  time  dur- 
ing the  lease,  provided  he  paid  the  annual  rent  at 

3  Peterson  v.  Eankin,  161  Iowa  431,  143  N.  W.  418. 


§  715  LAW  OF  OPTION  CONTRACTS  288 

maturity  and  fiirtlier  provided  that  if  he  failed 
to  do  so,  in  any  year,  he  would  forfeit  his  option 
right.  The  tenant  failed  to  pay  the  annual  rent  at 
maturity,  and  it  was  held  the  contract  of  renting 
with  the  option,  because  of  such  failure,  was 
forfeited/ 

Under  a  clause  in  a  lease  with  option  to  renew 
and  to  purchase,  giving  the  lessor,  at  her  election, 
the  right  to  distrain  for  non-payment  of  rent,  or 
to  declare  the  lease  at  an  end  and  recover  posses- 
sion, the  lessee  waiving  notice  of  such  election  and 
demand  for  possession,  it  was  held  that  the  lease 
and  option  were  not  ipso  facto  forfeited  by  failure 
to  pay  the  final  installment  of  the  rent  at  the 
expiration  of  the  time  when  it  was  due,  and  that  a 
tender  and  notice  before  any  forfeiture  had  been 
declared  by  any  overt  act  of  the  lessor,  was  suf- 
ficient to  entitle  the  lessee  to  specific  performance, 
on  the  theory  that  since  the  right  to  forfeit  was 
optional  with  the  lessor,  the  lease  and  option  rights 
continued  until  the  lessor  manifested  her  intention 
to  forfeit  by  some  clear  and  unequivocal  act,  and 
this,  notwithstanding  the  lessee's  express  waiver 
of  notice  in  the  lease.^ 

1  Brown  v.  Larry,  153  Ala.  452,  44  So.  841 ;  see  Clifford  v.  Gressinger, 
96  Ga.  789,  22  S.  E.  399;  Carpenter  v.  Thornburn,  76  Ark.  578,  89 
S.  W.  1047;  Chadbourne  v.  Stockton  Sav.  Bk.,  88  Cal.  636,  26  P.  529; 
Ober  V.  Brooks,  162  Mass.  102,  38  N.  E.  429. 

2Keene  v.  Zindorf,  81  Wash.  152,  142  P.  484;  also  Gradle  v.  Warner, 
140  HI.  123,  29  N.  E.  1118 ;  Ackerman  v.  Maddux,  26  N.  D.  50,  143 
N.  W.  147;  Bell  v.  Wright,  31  Kan.  236,  1  P.  595. 

Eent  tendered  and  refused  need  not  be  again  tendered,  Paddell  v.  Janes, 
145  N.  Y.  S.  868. 


289  DISCHARGE  BY  BREACH  §  716 

Sec.  716.  SAME.  MISCELLANEOUS  COVE- 
NANTS AND  AGREE^IENTS.— The  rule  with 
reference  to  the  non-pa}Tiient  of  rent  under  a  lease 
containing  an  option  to  purchase,  would  seem  to 
be  applicable  to  any  other  covenant  the  perform- 
ance of  which  is  made  a  condition  precedent  to  the 
exercise  of  the  option  privilege.  Thus,  it  is  held, 
the  failure  of  the  lessee-optionee  to  keep  and  per- 
form the  following  covenants  works  a  discharge 
of  his  option  rights:  to  paint  and  repair;^  to  pay 
the  purchase  money  f  to  furnish  security  f  to  pay 
taxes  f  not  to  cut  timber  f  to  sink  a  shaft  f  to  pay 
a  certain  percentage  of  ''clean-up";^  to  build  a 
dam  f  to  insure  the  property  for  the  benefit  of  the 

1  Bastin  v.  Bidwell,  L.  E.  18  Ch.  Div.  238,  renewal;  Finch  v.  Underwood, 

L.  E.  2  Ch.  Div.  310,  16  Eng.  Eul.  Gas.  15. 

2  Weston  V.  ColUns,  11  Jur.  (N.  S.)  190,  34  L.  J.  Ch.  353,  13  Wkly.  E. 

510;  Barnes  v.  Hustead,  219  Pa.  287,  68  Atl.  839;  Jennings-Heywood 
Oil  Synd.  v.  Oil  Co.,  119  La.  793,  44  So.  481. 

3  McFadden  v.  McCann,  25  Iowa  252. 

4  Forbes  v.  Connolly,  5  Grant  Ch.    (U.   C.)    657;   Ball  v.   Canada  Co., 

24  Grant  Ch.  (U.  C.)  281,  holding  offer  to  make  good  does  not  cure 
default;  Bell  v.  Wright,  31  Kan.  236,  1  P.  595. 

Default  by  mistake  in  paying  taxes  and  assessments  for  a  particular 
year  does  not  prevent  the  exercise  of  the  option  to  purchase  by  the 
optionee,  no  demand  having  been  made  and  the  same  having  been 
paid  by  him  as  soon  as  discovered,  Ankeny  v.  Eichardson,  187  Fed. 
550,  109  C.  C.  A.  316,  the  lessor  had  refused  tender  for  renewal;  id. 

Payment  of  taxes  is  not  a  condition  precedent  to  election  under  an 
option  for  a  year,  where  the  option  is  exercised  during  the  year,  it 
being  sufficient  to  pay  the  taxes  before  the  expiration  of  the  option 
period.  Brink  v.  Mitchell,  135  Wis.  416,  116  N.  W.  16. 

5  BaU  V.  Canada  Co.,  24  Grant  Ch.  (U.  C.)  281. 

6  Davis  V.  Fames,  (Cal.)  35  P.  566. 

7  Champion  G.  M.  C.  v.  Champion  Mines,  164  Cal.  205,  128  P.  315. 

sBriles  v.  Paulson,  (Cal.)  149  P.  169;  Briles  v.  Paulson,  (Cal.)  149 
P.  804. 

19 — Option  Contracts. 


§  717  LAW  OF  OPTION  CONTRACTS  290 

optionor;^  to  make  a  deposit  for  the  faithful  per- 
formance of  the  covenants  of  the  lease/" 

The  failure  of  plaintiff,  an  attorney  at  law,  to 
render  services  stipulated  to  be  rendered  by  him 
in  locating  certain  land  warrants,  was  a  condition 
precedent  to  his  right  to  demand  a  return  of  the 
warrants  from  defendant  under  an  agreement  by 
which  the  land  warrants  were  delivered  to  defen- 
dant at  a  certain  price  and  on  condition  that  plain- 
tiff, if  he  should  so  elect,  should  be  entitled  to 
receive  them  back,  at  the  same  price,  in  the  event 
the  applications  should  be  refused  by  the  proper 
authorities.^^ 

Under  an  option  to  return  goods  remaining 
unused  at  the  end  of  the  year,  it  was  held  the 
optionee  did  not  forfeit  his  right  to  return  the 
goods  because  of  his  failure  to  pay  the  full  price 
for  them/^ 

Sec.  717.  SAME.  WAIVER  OF  OPTIONEE'S 
BREACH. — The  time  for  payment  of  rent  under 
a  lease  containing  an  option  to  purchase  the 
premises,  is  for  the  benefit  of  the  lessor  and  may 
be  waived  by  him.^  The  receipt  by  the  lessor  of 
rent  after  it  is  due  is  a  waiver  by  the  lessor  of  the 

9  Chadbourne  v.  Stockton  etc.  Soc,  88  Cal.  636,  26  P.  529. 

10  Frank  v.  Stratford-Handcock,  13  Wyo.  37,  77  P.  134,  110  A.  S.  R.  963, 

67  L.  R.  A.  571,  the  deposit  fell  with  the  lease,  as  it  was  a  condition 
to  its  taking  effect. 

There  is  no  breach  where  performance  is  prevented  by  the  optionor, 
Jones  V.  Brown,  171  Mass.  318,  50  N.  E.  648. 

11  Hill  V.  Mathews,  78  Mich.  377,  44  N.  W.  286. 

12  Ramsey  v.  West,  31  Mo.  App.  676. 

1  See  Sec.  715. 


291  DISCHARGE CONDITIONAL  ELECTION  §  718 

strict  performance  of  the  terms  of  the  option  privi- 
lege.^ The  failure  of  the  lessor  to  object  to  the 
erection  of  the  building  strictly  in  accordance  with 
the  provisions  of  the  lease,  or  to  make  any  inquiry 
as  to  the  intention  of  the  lessee  during  its  con- 
struction, constitutes  a  waiver  of  the  right  to 
declare  a  forfeiture  for  violation  of  the  covenant 
requiring  the  construction  of  the  building.^  And 
so,  where  the  lessor  permits  large  expenditures  of 
money  in  developing  oil  property;"'  or  prevents 
performance  by  the  optionee;^  and  where  he 
refuses  a  tender  for  renewal,  he  thereby  waives 
default  of  the  lessee  in  the  payment  of  taxes  and 
assessments  for  a  particular  year.^  Failure  of  the 
lessor  to  tender  a  deed  is  no  excuse  for  the  lessee's 
failure  to  pay  the  last  rental  note.'^ 

Sec.  718.    CONDITIONAL   ELECTION.— As 
we  have  seen,  if  the  offeree,  before  the  expiration 

2  Mack  V.  Dailey,  67  Vt.  90,  30  Atl.  686;   also  Crystal  Lake  Cemetery 

Ass'n  V.  Farnham,  129  Minn.  1,  151  N.  W.  418;  also  Raddatz  v. 
Florence  Inv.  Co.,  147  Wis.  636,  133  N.  W.  1100 ;  also  Green  v.  Low, 
22  Beav.  625,  2  Jur.  (N.  S.)  848,  4  Wkly.  Rep.  669,  52  Eng.  Reprint 
1249,  insurance;  Raffety  v.  Schofiekl,  L.  R.  1  Ch.  937,  66  L.  J.  Ch. 
448,  76  L.  T.  Rep.  (N.  S.)  648,  45  Wkly.  Rep.  640. 
Brown  v.  Larry,  153  Ala.  452,  44  So.  841,  holds  to  the  contrary  on  the 
theory  that  the  lease  and  option  are  separate  agreements,  and  receipt 
of  rent  was  under  the  lease  and  not  under  the  option,  and  stating 
also  the  rule  for  application  of  payments.  On  the  other  hand, 
Mathews  Slate  Co.  v.  New  Empire  Slate  Co.,  122  Fed.  972,  holds 
that  default  in  payment  of  rent  does  not  affect  option  in  the  lease 
because  they  are  separate  agreements. 

3  Hawes  v.  Favor,  161  HI.  440,  43  N.  E.  1076. 

4  Owens  V.  Petroleum  Co.,  (Tex.  Civ.  App.)  169  S.  W.  192. 

5  Jones  V.  Brown,  171  Mass.  318,  50  N.  E.  648. 

6  Ankeny  v.  Richardson,  187  Fed.  550,  109  C.  C.  A.  316. 
T  Carpenter  v.  Thornburn,  76  Ark.  578,  89  S.  W.  1047, 


§  719  LAW  OF  OPTION   CONTRACTS  292 

of  the  time  limit,  rejects  the  offer,  or  otherwise 
communicates  to  the  offerer  that  he  will  not 
accept,  the  offer  is  at  an  end,^  and  the  same  conse- 
quences follow  an  acceptance,  which  is  not  in 
accordance  with  the  terms  of  the  offer.^  This  is 
the  rule  governing  mere  offers  but  it  is  believed 
that  where  the  offer  is  supported  by  a  considera- 
tion, that  is,  is  a  real  option,  a  mere  conditional 
election,  for  instance,  prior  to  the  expiration  of  the 
time  limit,  does  not  ipso  facto  terminate  the  option, 
and  if,  thereafter  and  within  the  time  limit,  the 
optionee  elects  unconditionally  and  in  accordance 
with  its  terms,  he  does  not  lose  his  right  there- 
under, to  make  a  new  and  proper  election  within 
the  time  limit,  where,  for  instance,  an  unauthorized 
condition  is  inadvertently  annexed,  or  by  mistake, 
the  tender  is  made  at  the  wrong  place. ^ 

Sec.  719.  ELECTION.— An  election  is  the  act 
which  converts  the  option  into  a  bilateral  contract. 
By  election  the  option  contract  is  discharged  in 
the  sense  that  thereafter  the  rights  and  liabilities 
of  the  parties  are  measured  by  rules  applicable  to 
bilateral  contracts  and  not  by  the  rules  peculiar  to 
options  or  offers.  The  judicial  development  of  the 
subject  is  of  unusual  interest.  It  is  one  of  the  most 
important  in  the  law  of  options.  It  will  be  found 
presented  in  the  next  chapter. 

iSec.  710. 

2  See.  838. 

3  See  Sec.  838. 


CHAPTER  VIII. 

ELECTION  AND  NOTICE. 

Sec.  801.     Generally. 

Sec.  802.     By  whom  election  must  be  made. 

Sec.  803.     Same.     Agent. 

Sec.  804.     Same.     Assignee. 

Sec.  805.     Joint  or  several  optionees. 

Sec.  806.     Same,  continued.    Decisions. 

Sec.  806a.  Same.     Partners. 

Sec.  807.     Same.     Partners. 

Sec.  808.     Same.     Eepresentative  of  deceased  optionee. 

Sec.  809.     To  whom  notice  must  be  given.    Optionor.    Agent. 

Sec.  810.     Same.     Grantee  of  optionor. 

Sec.  811.     Same.     Joint  or  several  optionors. 

Sec.  812.     Same.     Representative  of  deceased  optionor.    Minorai 

Sec.  813.     Elements  of  election. 

Sec.  814.     The  election  must  be  communicated. 

Sec.  815.     Terms  of  option  control  mode  of  election. 

Sec.  816.     Written  or  oral  election  or  acceptance. 

Sec.  817.     Commimication  of  election  by  act. 

Sec.  818.     Communication  of  election  by  post  or  telegraph. 

Sec.  819.     Same.    Continued. 

See.  820.     Place  of  election  or  acceptance. 

Sec.  821.     Election  must  be  definite. 

Sec.  822.     Election  as  to  part  of  property. 

Sec.  823.     Particular  act  as  election  or  acceptance.    Grenerally. 

Sec.  824.     Particular  act  as  election  or  acceptance.    Statements  and  con- 
versations. 

Sec.  825.     Particular  act  as  election  or  acceptance.     Letters  and  other 
writings. 

Sec.  826.     Particular    act    as    election    or    acceptance.      Ordinances    by 
municipalities,  etc. 

Sec.  827.     Particular  act  as  election  or  acceptance.    Possession  and  im- 
provements. 

(293) 


LAW  OP  OPTION  CONTRACTS  294 

Sec.  828.  Particular  act  as  election  or  acceptance.  Sale  and  return. 
Sale  on  trial  or  approval.    Bailment.    Generally. 

Sec.  829.  Particular  act  as  election  or  acceptance.  Agreements  to  re- 
purchase. Agreements  and  options  involving  shares  of 
stock  and  bonds. 

Sec.  830.  Particular  act  as  election  or  acceptance.  Sale  on  trial  or 
approval.    Bailment. 

See.  831.  Particular  act  as  election  or  acceptance.  Kenewal  or  exten- 
sion of  lease. 

Sec.  832.  Particular  act  as  election  or  acceptance.  Rule  where  lessee 
holds  over  and  pays  higher  or  different  rental. 

Sec.  833.  Particular  act  as  election  or  acceptance.  Rule  where  same 
rental  is  paid.     Renewals. 

Sec.  834.  Particular  act  as  election  or  acceptance.  Ride  where  same 
rental  is  paid.     Extensions. 

Sec.  835.  Particular  act  as  election  or  acceptance.  Rule  where  written 
or  formal  notice  is  provided  for  or  implied  or  the  mode 
of  communication  is  prescribed. 

Sec.  836.  Particular  act  as  election  or  acceptance.  Failure  of  lessee 
to  give  notice  to  terminate  the  lease.    Also  lessor's  option. 

Sec.  837.     Election  varying  terms  of  offer  or  option.     Generally. 

Sec.  838.  Effect  of  conditional  acceptance  or  election.  Distinction  be- 
tween acceptance  of  offer  and  election  under  option. 

Sec.  839.     Election  and  performance  distinguished. 

Sec.  840.     Election  varying  terms  of  option.     Cases. 

Sec.  841.     Conditional  elections.     Cases. 

Sec.  842.     Same.    Continued. 

See.  843.     Unconditional  election.     Turner  v.  McCormiek. 

Sec.  844.     Unconditional  election.     Kreutzer  v.  Lynch. 

Sfic.  845.     Unconditional  election.     Horgan  v.  Russell. 

Sec.  846.     Unconditional  election.     McCormiek  v.  Stephany. 

Sec.  847.     Unconditional  election.     Other  cases. 

Sec.  848.     Time  of  election.    Generally. 

Sec.  849.     Specified  time.     Generally. 

See.  850.     Specified  time.     Construction.    Generally. 

Sec.  851.     Specified  time.     Construction.     "Expiration"  clauses. 

See.  852.     Same.     Leases  and  renewals. 

Sec.  853.     Same.     Option  to  sell  or  repurchase. 

Sec.  854.     Alternative  stipulations. 

Sec.  855.     Same.     Clause  reserving  to  optionor  right  to  sell. 

Sec.  856.     Reasonable  time.     Generally. 


295  ELECTION 

Sec.  857.  Eeasonable  time.     Construction. 

Sec.  858.  Reasonable  time.     Construction,  continued. 

Sec.  859.  Extension  of  time  to  elect.     Generally. 

Sec.  860.  Extension  of  time  to  elect.     Agreeuient  for. 

Sec.  861.  The  same.     Cases. 

Sec.  862.  Time  as  essence  of  election. 

Sec.  863.  Election.     Equitable  relief  to  optionee.     Generally. 

Sec.  864.  Election.     Equitable  relief.     Accident  and  act  of  God, 

Sec.  865.  Election.     Equitable  relief.     Mistake. 

Sec.  866.  Election.     Equitable  relief.     Miscellaneous  cases  granting  re- 
lief. 

Sec.  867.  Election.      Equitable    relief.      Miscellaneous    cases    denying 
relief. 

Sec.  868.  Election.     Waiver  and  estoppel. 

Sec.  869.  Waiver  and  estoppel.    Cases  holding  acts  constitute  waiver. 

Sec.  870.  Waiver  and  estoppel.    Cases  holding  acts  not  waiver. 

Sec.  871.     Effect  of  sufficient  or  insufficient  election. 

Sec.  872.     Same.     Miscellaneous  cases. 


§  801  LAW  OF  OPTION   CONTRACTS  296 

Section  801.  GENERALLY.— Election  is  the 
act  of  the  optionee  which  converts  the  option  con- 
tract into  a  binding  promise  on  the  part  of  the 
optionor  to  sell.^  If  an  election  be  likened  to  a 
condition  precedent"  then  it  may  be  said  that 
election  is  the  performance  of  the  condition  by  the 
optionee. 

The  particular  act  or  acts  which  constitute  an 
election  may  be  fixed  by  the  terms  of  the  option,  as 
also  the  time  when,  the  place  where,^  and  the  person 
to  whom  it  shall  be  made.'*  As  we  shall  see,  an 
election,  other  than  by  performance  of  an  act,^ 

1  Watson  V.  Coast,  35  W.  Va.  463,  14  S.  E.  249. 
If  no  condition  precedent  is  imposed,  such  as  payment  of  the  price, 
the  exercise  of  the  option  consists  merely  of  notice  of  election  by 
the  optionee  to  purchase,  Winders  v.  Kenan,  151  N.  C.  628,  77  S.  E. 

687. 

2Bluthenthal  v.  Atkinson,  93  Ark.  252,  124  S.  W.  510;  Rogers  v.  Burr, 
105  Ga.  432,  31  S.  E.  438,  70  A.  S.  R.  50. 
Election  is  not  the  making  of  the  bilateral  contract  in  the  sense  that  the 
minds  of  the  parties  must  then  meet  in  common  or  mutual  agree- 
ment. If  it  were  so,  then  the  refusal  of  the  optionor  to  concur  in  or 
accept  the  election  would  end  the  rights  of  the  optionee.  An  elec- 
tion is  the  exercise  of  a  right  growing  out  of  a  previously  existing 
contract,  a  right  which  permits  the  optionee  to  raise  a  bilateral  con- 
tract without  the  assent  of  the  optionor.  It  is  a  condition  precedent, 
but  when  the  option  right  is  exercised,  the  option  is  turned  into  a 
.  bilateral  contract  by  virtue  of  the  condition  and  not  by  virtue  of  any 
mutual  assent  or  agreement  of  the  parties  at  that  time.  See  Corson 
V.  Mulvany,  49  Pa.  88,  88  Am.  Dec.  485.  This  explains  why  it  is  not 
a  "legal  paradox  that  a  contract  for  the  sale  of  land,  mutual  and 
enforceable,  can  be  made  when  at  the  time  it  is  claimed  to  have 
been  made,  one  party  to  it  is  openly  protesting  that  he  will  make 
no  such  contract,"  quoting  Justice  Ostrander,  concurring  in  Solo- 
mon Mier  Co.  v.  Hadden,  148  Mich.  488,  111  N.  W.  1040,  118  A.  S.  R. 
586,  12  Ann.  Gas.  88. 

8  Mueller  v.  Nortmann,  116  Wis.  468,  93  N.  W.  538,  96  A.  S.  R.  997. 

4  Breen  v.  Mayne,  141  Iowa  399,  118  N.  W.  441. 

6  See  Sec.  817;  Goldberg  v.  Drake,  145  Mich.  50,  108  N.  W.  367;  Mc- 
Carty  v.  Helbing,  (Ore.)  144  P.  499. 


297  ELECTION GENERALLY  §  801 

involves  the  notion  of  notice  and  this  implies  a 
communication  to  the  optionor.^  These  also  are 
matters  clearly  within  the  contract  powers  of  the 
parties  and  consequently  the  kind  of  notice  and  the 
mode  of  communicating  it,  may  also  be  fixed  by 
the  terms  of  the  option  contract.  In  the  absence  of 
express  provisions  in  the  option,  the  election  must 
be  made  in  accordance  with  the  terms  implied  by 
law.'^ 

An  offer  is  turned  into  a  real  contract  by  "accep- 
tance" of  the  offer.  The  word  "acceptance"  is 
frequently  applied  to  option  contracts  but  when 
so  applied  it  must  be  understood  as  meaning- 
selection."  An  offer  is  not  "elected,"  nor  strictly 
speaking,  is  an  option  "accepted".  An  option  con- 
tract is  performed,  the  performance  consisting  of 
election.  An  offer  is  not  performed  as  there  is 
nothing  to  perform  until  after  acceptance.  An 
option  is  a  contract  from  its  inception,  that  is  to 
say,  it  is  a  conditional  contract  which  is  turned  into 
a  binding  promise  by  performance  of  the  condi- 
tion.* An  offer  is  not  a  contract  until  accepted. 

The  effect  of  a  timely  and  proper  election  under 
an  option  contract,  and  of  a  timely  and  proper 
acceptance  of  an  offer,  is  the  same,  in  that  the 
option  contract,  on  the  one  hand,  and  the  offer  on 
the  other,  are  turned  into  bilateral  contracts.^  The 
process,  however,  is  one  of  transformation,  for  the 

6  Breen  v.  Mayne,  141  Iowa  399,  118  N.  W,  441. 

7  See  Sees.  815,  856. 

8  Corson  v.  Mulvany,  49  Pa.  88,  88  Am.  Dec.  485. 

9  Watson  V.  Coast,  35  W.  Va.  463,  14  S.  E.  249;  Johnston  v.  Trippe,  33 

Fed.  530. 


§  802  LAW  OF  OPTION  CONTRACTS  298 

terms  of  the  option,  or  of  the  offer,  remain  as  the 
terms  of  the  contract  thus  raised.  ^° 

Failure  timely  and  unconditionally  to  elect  dis- 
charges the  option  contract  and  releases  the 
optionor  from  all  liability  thereunder/^  An  offer 
may  be  withdrawn  by  the  proposer  at  any  time 
before  its  accex)tance,  and  it  lapses  if  not  timely 
accepted,  ^^  An  option  may  not  be  withdrawn  by 
the  optionor  during  its  time  limit/^ 

Sec.  802.  BY  WHOM  ELECTION  MUST  BE 
MADE. — An  option  privilege  must  necessarily  be 
exercised  by  the  owner  of  the  privilege.  It  may 
not  be  exercised  b}^  a  stranger  to  the  contract.^  The 

10  Copp  V.  Longstreet,  5  Colo.  App.  282,  38  P.  601. 

11  See  Sec.  707. 

12  See  Sec.  703, 

13  See  Sec.  703. 

1  Breen  v.  Mayne,  141  Towa  399,  118  N.  W.  441;  Emery  v.  Hill,  67  N.  H. 

380,  39  Atl.  266,  notice  to  renew  lease  signed  by  third  person  is  not 

notice  by  lessees. 
Optionee  may  not  substitute  a  third  person,  Vanderlip  v.  Peterson,  16 

Manitoba  341. 
Not  by  owner  of  equitable  interest   (mortgagee)    under  English   rule 

as  to  mortgage  of  personal  property,  Friary  H.  &  H.  Breweries  v. 

Singleton,  28  L.  J.  Ch.  622,  2  Ch.  261,  81  L.  T.  (N.  S.)  101,  47  Wkly. 

Eep.  662. 

Lewis  V.  Agoure,  8  Cal.  App.  146,  96  P.  327,  case  where  lessee  under 
option  to  cancel  lease,  in  event  of  sale  of  premises,  held  to  have 
authority  to  exercise  option  though  he  had  conveyed  title.  Another 
case  holds  that  it  is  otherwise  under  a  mere  stipulation  to  terminate 
the  tenancy.  Griffin  v.  Barton,  22  Misc.  E.  228,  49  N.  Y.  S.   1021. 

Sub-lessee  is  not  entitled  as  such  to  renewal  of  lease,  Cifelli  v.  Santa- 
maria,  79  N.  J.  L.  354,  75  Atl.  434;  Audubon  Hotel  Co.  v.  Braunnig, 
120  La.  1089,  46  So.  33;  Marino  v.  Williams,  30  Nev.  360,  96  P.  1073. 

Case  where  optionee  was  alien  and  prohibited  by  constitution  of  state 
from  owning  land,  Keene  v.  Zindorf,  81  Wash.  352,  142  P.  484. 


299  ELECTION — NOTICE  BY  WHOM  §  802 

optionee  may,  of  course,  delegate  authority  to 
exercise  the  option  to  his  agent,  in  which  case  the 
act  of  the  agent  is,  in  law,  his  act.^ 

In  those  jurisdictions  where  the  option  is  assign- 
able, the  assignee  of  the  option  privilege  is  author- 
ized to  exercise  it.^  Again,  upon  his  death,  or  in 
case  of  his  incompetency  subsequently  arising,  the 
representative  of  the  optionee  appointed  by  law, 
is  authorized  to  exercise  the  option  privilege/ 

Where  the  option  is  taken  in  the  name  of  the 
agent  either  in  fraud  of  the  rights  of  the  principal 
or  by  his  direction,  the  principal  undoubtedly  has 
the  right  to  exercise  the  option  privilege  where  the 
fact  is  known  to  the  optionor  at  the  time,  and 
perhaps  also  where  the  fact  of  the  agency  was 
unknown  to  him  at  the  time,  unless  the  optionor 
was  induced  to  give  the  option  to  the  agent  by 
reason  of  some  fact  which  would  make  the  option 
right  strictly  personal  to  the  optionee.^ 

2  Breen  v.  Mayne,  141  Iowa  399,  118  N.  W.  441. 

3  Tyler  v.  Barrows,  29  N.  Y.  Sup.  Ct.  104;  Perry  v.  Paschal,  103  Ga.  134, 

29  S.  E.  703 ;  Gustin  v.  Union  School  Dist.,  94  Mich.  502,  54  N.  W. 
156,  34  A.  S.  R.  361,  lease;  but  not  where  option  privilege  is 
restricted  to  optionee,  Myers  v.  J.  J.  Stone  &  Son,  128  Iowa  10, 
102  N.  W.  507,  111  A.  S.  R.  180,  5  Ann.  Gas.  912. 
The  assignee  must,  of  course,  liave  succeeded  to  the  entire  option  inter- 
est of  the  original  optionee,  see  Wheeling  Creek  etc.  Co.  v.  Elder, 
170  Fed.  215. 

4  See  Sec.  808. 

5  See  Daniels  v.  Straw,  53   Fed.  327;    Shields  v.  Coyne,   148  Iowa  313, 

127  N.  W.  63 ;  Lenman  v.  Jones,  33  App.  D.  C.  7 ;  Henry  v.  Black, 
213  Pa.  620,  63  Atl.  250. 
Where  option  is  under  seal  the  party  named  and  not  the  principal  is 
entitled  to  maintain  suit  for  damages,  Boyden  v.  Hill,  198  Mass.  477, 
85  N.  E.  413 ;  and  so  in  any  case  where  the  principal  is  not  objecting, 
Pearson  v.  Home,  139  Ga.  453,  77  S.  E.  387. 


§  803  LAW  OP  OPTION  CONTRACTS  300 

The  assignee  of  an  option  privilege  gave  notice 
of  election  reciting  acceptance  of  the  offer,  made  a 
small  pajonent,  and  took  a  receipt  running  to  him 
as  treasurer  of  a  certain  coal  company,  not  then 
incorporated.  The  company  was  subsequently 
organized,  but  after  the  expiration  of  the  option 
time,  when  the  option  was  assigned  to  it.  It  was 
held  there  was  no  election  by  the  assignee  nor  by 
any  party  bound  to  perform.^ 

Sec.  803.  SAME.  AGENT.— A  lease  gave  the 
tenant,  a  married  woman,  an  option  to  renew. 
Notice  of  her  election  to  renew  was  signed  by  her 
husband  alone,  but  the  notice  showed  that  she  was 
the  lessee.  The  husband  was  her  general  manager. 
The  notice  was  held  sufficient.^ 

Where  an  attorney  employed  by  a  vendor  was 
authorized  by  him  to  do  whatever  was  necessary 
to  procure  a  reconveyance  of  the  land  under  an 

5  Under  an  election  to  renew  lease  by  one  standing  in  fiduciary  relation 

to  lessee,  the  latter  holds  in  trust  for  lessee,  McCourt  v.  Singers- 
Bigger,  145  Fed.  103,  76  C.  C.  A.  73,  7  Ann.  Gas.  287. 
Generally,  see  Lawyer  v.  Post,  109  Fed.  512,  47  C.  C.  A.  491 ;  Kelley  v. 
Thuey,  143  Mo.  422,  45  S.  W.  300,  undisclosed  principal. 

6  Wheeling  Creek  etc.  Co.  v.  Elder,  170  Fed.  215,  in  this  case  the  orig- 

inal option  ran  to  the  optionee,  his  heirs,  etc.  The  optionee  assigned 
but  without  express  words  of  further  assignment  and  the  decision 
seems  to  be  influenced  by  this  fact.  The  effect  of  the  decision  is  that 
the  election  must  be  made  by  such  person  that  thereby  an  obliga- 
tion will  be  raised  which  will  be  enforceable  by  the  optionor.  This 
statement,  however,  must  be  considered  in  connection  with  the  rule 
under  the  Statute  of  Frauds,  touching  written  and  oral  election.  See 
Sees.  416,  417. 

1  Coy  V.  Title  G.  &  T.  Co.,  198  Fed.  275. 


301  ELECTION — BY  ASSIGNEB  §  804 

option  to  the  vendor  to  repurchase,  lie  is  authorized 
to  give  notice  of  election  to  repurchase.^ 

Sec.  804.  SAME.  ASSIGNEE.— The  assign- 
ability of  an  option  privilege  is  presented  in  a 
preceding  chapter/  and  while,  as  there  shown, 
there  are  a  few  well  established  exceptions,  the 
general  rule  is  that  an  option  privilege  is  assign- 
able. Assuming  the  option  privilege  is  assignable, 
the  assignee  becomes  its  owner,  and  is  clothed  with 
the  authority  of  the  original  optionee,  at  least  so 
far  as  the  right  to  exercise  the  option  privilege  and 
communication  of  that  fact  are  concerned.  Accord- 
ingly it  is  held  an  assignee  is  the  proper  party  to 
exercise  the  option  privilege  and  give  notice.^ 

2  Eohling  V.  Thole,  256  Dl.  425,  100  N.  E.  138. 

As  to  right  of  undisclosed  principal,  see  Shields  v.  Coyne,  148  Iowa 
313,  127  N.  W.  63;  Lenman  v.  Jones,  33  App.  D.  C.  7;  Sec.  802. 

Election  by  an  unauthorized  agent  does  not  bind  the  principal  and  the 
principal  cannot,  when  he  finds  the  contract  advantageous  to  him, 
affirm  it  and  recover  damages  from  the  vendor  for  his  failure  to  make 
title,  Athe  v.  Bartholemew,  69  Wis.  43,  33  N.  W.  110,  5  A.  S.  E.  103. 

1  See  Chapter  VI. 

Of  course  if  the  option  is  not  assignable,  an  election  by  an  assignee  does 
not  convert  the  option  into  a  promise  to  sell,  Eease  v.  Kittle,  56 
W.  Va.  269,  49  S.  E.  150 ;  see  See.  604. 

2  Napier  v.  Darlington,  70  Pa.  64 ;  Blair  v.  Hamilton,  48  Ind.  32 ;  Adams 

V.  Peabody  Coal  Co.,  230  El.  469,  82  N.  E.  645;  Perkins  v.  HadseU, 
50  HI.  216. 
Warner  v.  Cochrane,  128  Fed.  553,  63  C.  C.  A.  207,  case  where  lessee 
was  held  estopped  to  challenge  election  by  assignee  where  assign- 
ment was  made  without  her  written  consent  as  required  by  lease. 
But  it  would  be  otherwise  where  there  was  no  estoppel  and  no  con- 
sent, Upton  V.  Hosmer,  70  N.  H.  493,  49  Atl.  96 ;  Connor  v.  Withers, 
20  Ky.  Law  Eep.  1326,  49  S.  W.  309,  renewal  of  lease;  Cook  v.  Jones, 
96  Ky.  283,  28  S.  W.  960,  16  Ky.  L.  Eep.  469,  renewal  of  lease; 
McClintoek  v.  Joyner,  77  Miss.  678,  27  So.  837,  78  A.  S.  E.  541. 


§  805  LAW   OF  OPTION   CONTRACTS  302 

An  option  privilege  contained  in  a  lease,  either 
to  purehase,  to  renew,  or  extend  the  term,  is,  as  a 
rule,  construed  to  be  assignable,  or  as  passing  with 
the  lease,  and  to  vest  in  the  assignee  the  power  to 
exercise  the  option  privilege,^  and,  since  the  con- 
sideration for  the  option  is  furnished  by  the  lease 
itself,  it  seems  to  be  immaterial  whether  the  assign- 
ment is  made  before  or  after  the  exercise  of  the 
option  by  the  original  lessee.'* 

Sec.  805.  JOINT  OR  SEVERAL  OPTIONEES. 
— The  law  seems  to  be  well  settled  that  neither  a 
tenant  in  common  nor  a  joint  tenant  can  grant  an 
option  privilege  that  will  be  binding  upon  his 
co-tenant,  without  previous  authority,  express  or 
implied,  or  subsequent  ratification  by  the  latter.^ 

2  Case  where  optionee  elected  and  assignee  intervened  and  specific  per- 

formance was  denied  to  assignee,  SchsefPer  v.  Herman,  237  Pa.  86,  85 

Atl.  94. 
Eight  of  mortgagee  of  leasehold  to  exercise  option,  see  Conn  v.  Tonner, 

86  Iowa  577,  53  N.  W.  320;   Halsted  v.  Colvin,  51  N.  J.  Eq.  387, 

26  Atl.  928. 
Eight  of  equitable  assignee  to  exercise  option,  see  Holroyd  etc.  Breweries 

V.  Singleton,  2  Ch.  261,  60  L.  J.  Ch.  622,  81  L.  T.  Eep.  (N.  S.)   101, 

47  Wkly.  Eep.  662. 
It  is  said  a  court  of  equity  will  not  specifically  enforce  contract  at  suit 

of  assignee  of  vendee,  if  the  assignee  has  not  assumed  any  personal 

liability  for  the  performance  of  the  contract,  since  there  would  be 

no  mutuality  between  the  vendor  and  the  assignee;   see  Genevetz  v. 

Feiering,  121  N.  Y.  S.  392,  136  App.  Div.  736;  Wheeling  Creek  G.  C. 

&  C.  Co.  V.  Elder,  170  Fed.  215. 

3  Sutherland  v.  Goodnow,  108  111.  528,  48  Am.  Eep.  560 ;  Guffey  v.  Clever, 

146  Pa.  548,  23  Atl.  161;  Blackmore  v.  Boardman,  28  Mo.  420, 
execution  sale  of  lessee's  interest;  Probst  v.  Eochester  S.  L.  Co., 
171  N.  Y.  584,  64  N.  E.  504,  making  assignee  liable  for  unexpired 
portion  of  time;  Spangler  v.  Spangler,  11  Cal.  App.  321,  104  P.  995. 

4  House  V.  Jackson,  24  Ore.  89,  32  P.  1027. 
1  Sec.  206. 


303  NOTICE  BY  JOINT  OR   SEVERAL   OPTIONEES  §  805 

This  lack  of  authority  necessarily  arises  from  the 
nature  of  the  respective  estates  of  the  tenants.- 

Where  several  persons  join  in  purchasing  an 
option  privilege  by  one  and  the  same  instrument, 
the  right  of  one  or  of  less  than  all  of  the  optionees 
to  exercise  the  option  right  and  give  notice,  must 
be  ascertained  from  the  instrument  itself  as  cloth- 
ing them  with  several  or  with  joint  rights  and 
interests.^ 

If,  for  instance,  the  instrument  is  so  dra^vn  as 
to  grant  to  each  person  a  several  estate,  then  there 
are  as  many  separate  contracts  as  there  are 
optionees,  notwithstanding  they  are  all  embraced 
in  one  writing,  and  the  right  of  each  optionee  is 
the  same  as  if  he  was  the  sole  optionee,  and  hence 
he  alone  is  the  person  to  exercise  the  option  privi- 
lege for  himself  but  not  for  the  other  optionees/ 

On  the  other  hand,  if  the  option  runs  to  several 
optionees  jointly,  then,  as  a  general  rule,  all  of  the 
optionees  must  join  in  the  exercise  of  the  option 

2  Tenants  in  common  of  land  are  not  bound  by  the  acts  of  a  co-tenant  in 

accepting  a  balance  of  the  purchase  money  and  promising  a  deed 
after  the  right  thereto  had  been  forfeited,  Pearis  v.  Covillaud, 
6  Cal.  617,  65  Am.  Dec.  543. 

3  Hooks  V.  Forst,  165  Pa.  238,  30  Atl.  846,  847. 

The  contract  can  not  be  treated  as  joint  or  several  at  the  option  of 
the  optionees,  Eveleth  v.  Sawyer,  96  Me.  227,  52  Atl.  639. 

4  See  Nott  v.  Owen,  86  Me.  98,  29  Atl.  943,  41  A.  S.  E.  525;  also  In  re 

Walbridge,  198  N.  Y.  234,  91  N.  E.  590,  involving  an  option  in  a 
will  to  several  legatees  to  purchase  property  of  the  estate  where  it 
was  held  the  rights  of  the  legatees  were  equal  until  one  of  them 
first  elected;  but  a  tender  by  one  tenant  in  common  on  behalf  of  aU 
is  good,  Gentry  v.  Gentry,  33  Tenu.  87,  60  Am.  Dec.  137. 


§  805  LAW  OF  OPTION  CONTRACTS  304 

and  in  giving  notice.^  The  theory  is  that  one  joint 
optionee  may  not  exercise  the  option  privilege  and 
thus  fasten  a  liability  upon  the  other  joint 
optionees,  without  their  authority,  but  particular 
cases  show  that  a  like  authority  is  sometimes 
implied,^  and  in  others,  where  equity  requires  it, 
the  courts  have  not  always  observed  the  strict  letter 
of  the  rule.'^ 

5  As  said  in  Eogers  v.  Burr,  105  Ga.  432,  31  S.  E.  438,  70  A.  S.  R.  50,  a 

joint  contract  between  persons  not  partners  can  have  no  inception  and 

can  not  be  changed  in  time,  amount,  subject,  form,  or  substance, 

without  the  several  act  of  each  of  the  joint  contractors.    See  Clark  v. 

Harmer,  5  App.  D.  C.  114;  Davis  v.  Pfeiffer,  213  HI.  249,  72  N.  E. 

718,  suit  by  one  joint  vendee. 
The  optionor  is  not  obliged  to  accept  the  note  of  one  joint  optionee 

alone,  even  when  the  other  has  assigned  to  the  one  electing,  Hamble- 

ton  V.  Jameson,  (Iowa)  143  N.  W.  1010. 
The  erasure  by  one  of  six  optionees  of  his  name  from  the  written 

notice  of  election  signed  by  all^  vnthout  the  consent  of  the  others, 

does  not  affect  the  validity  of  the  election,  Burton  v.  Shotwell,  76  Ky. 

(13  Bush.)   271. 

6  As  where  the  relation  of  principal  and  agent  arises  by  virtue  of  some 

transactions  of  the  tenants,  see  Neff  v.  Elder,  84  Ark.  277,  105 
S.  W.  260,  or  where  the  tenants  jointly  pursue  the  common  purpose 
of  acquiring  title  to  land  (notice  concerning  condition  of  title  to 
one  being  notice  to  all),  Steele  v.  Robertson,  75  Ark.  228,  87  S.  W. 
117;  see,  also,  Clifford  v.  Meyer,  6  Ind.  App.  633,  34  N.  E.  23, 
employment  of  broker  to  sell;  Barton  v.  Gray,  48  Mich.  164,  12 
N.  W.  30,  agreement  to  cut  timber. 

7  Schaeffer  v.  Herman,  237  Pa.  86,  85  Atl.  94,  where  one  optionee  repu- 

diated the  option  and  the  other  tendered  the  entire  purchase  price 
and  his  election  alone  was  held  good. 
Holt  V.  Silver,  169  Mass.  435,  48  jST.  E.  837,  holding  that  where  one 
who,  after  making  a  contract  with  two  persons  providing  for  written 
notice  to  terminate  it,  procures  the  interest  of  one  of  such  persons 
by  assignment,  can  not  complain  that  the  other  alone  gave  notice  of 
termination;  Pearson  v.  Millard,  150  N.  C.  303,  63  S.  E.  1053,  holding 
optionor  estopped  on  facts;  Poehler  v.  Reese,  78  Minn.  71,  80  N.  W. 
847,  case  where  tender  by  one  tenant  in  common  was  held  sufficient, 
on  facts,  for  all. 


305  NOTICE  BY  JOINT  OR  SEVERAL  OPTIONEES  §  806 

Sec.  806.  SAME  CONTINUED.  DECISIONS. 
— Howell  leased  jointly  to  Behler  and  five  others, 
certain  premises  for  the  term  of  five  years  with  the 
privilege  of  continuing  the  lease  five  years  more 
upon  gi\dng  60  days'  notice  prior  to  the  end  of  the 
term.  Behler  died  and  at  an  administrator's  sale, 
the  lease,  with  the  option  to  continue,  was  sold  to 
Julia  Behler  and  she  gave  the  required  notice  to 
Howell  to  continue  the  lease  for  the  further  term 
of  five  years,  the  other  lessees  not  joining  or  con- 
curring. It  was  held  the  lease  was  executed  jointly 
to  the  six  lessees;  that  they  were  all  jointly  bound 
by  the  covenants  therein  and  that  no  one  of  the 
lessees  was  authorized  to  extend  the  term  or  to 
make  the  extension  binding  upon  the  others  with- 
out their  concurrence.^ 

In  a  Minnesota  case,^  certain  premises  were 
leased  to  two  tenants  as  joint  lessees,  with  the 
privilege  of  an  additional  term.  The  rule  was  laid 
down  that  in  order  to  continue  the  lease  it  was 
necessary  for  both  tenants  to  exercise  the  option; 
that  such  intention  may  be  expressed  jointly  or 
independently,  or  by  remaining  in  possession,  but 
that  when  one  of  the  tenants  expressly  informed 
the  owner  that  he  refused  to  extend  the  lease  jointly 

1  Howell  T.  Behler,  41  W.  Va.  610,  24  S.  E.  646,  also  holding  that  upon 

entry  hj  one  of  the  lessees,  his  occupancy  is  the  occupancy  of  all, 
whatever  might  be  the  relation  between  themselves,  and,  further,  that 
parol  evidence  was  not  admissible  to  prove  that  the  other  five  lessees 
were  merely  sureties  for  Behler, 
Clark  V.  Harmer,  5  App.  D.  C.  114,  also  holds  that  possession  taken  by 
one  joint  optionee  is  presumably  on  joint  act  and  for  joint  benefit. 

2  Tweedie  v.  P.  E.  Olson  H.  &  F.  Co.,  96  Minn.  238,  104  N.  W.  895,  1089, 

s.  c.  98  Minn.  11,  107  N.  W.  557;  also  Finch  v.  Underwood,  L.  R. 
2  Ch.  Div.  310,  16  Eng,  Eul.  Gas.  15;  Bastin  v.  Bidwell,  L.  R.  18 
Ch.  Div.  238. 
20 — Option  Contracts. 


§  806a  LAW  OF  OPTION  CONTRACTS  306 

with  a  co-tenant  notice  b}^  the  latter  that  he  would 
remain  under  the  terms  of  the  lease  did  not  have 
the  effect  to  continue  the  term. 

In  an  Iowa  case,^  a  stockholder  agreed  to  sell, 
to  two  other  stockholders,  a  certain  amount  of 
stock,  delivering  the  number  of  shares  to  each 
that  they  might  agree  upon.  It  was  held  an  elec- 
tion by  one  of  the  optionees,  ^vithout  the  consent  of 
the  other,  did  nut  bind  the  optionor. 

Sec.  806a.  SAME.  PARTNERS.— In  an  ordi- 
nary partnership,  each  partner  is  the  agent  of  the 
firm  and  of  the  other  partners,  for  the  transaction 
of  the  business  of  the  partnership.^  If  the  business 
of  the  partnership  is  the  buying  and  selling  of 
property  as  a  method  of  carrying  on  its  business, 
it  would  seem  that  each  partner,  acting  for  himself 
as  principal,  and  as  agent  for  the  other  partners, 
has  authority  to  take  an  option  in  the  name  of  the 
partners,  and  consequently  has  the  right  to  exer- 
cise the  option  privilege  and  give  notice  for  himself 
and  also  as  agent  for  the  other  partners.^    The 

3  Pratt  V.  Prouty,  104  Iowa  419,  73  N.  W.  1035,  65  A.  S.  K.  472. 

1  See  Deakin  v.  Underwood,  37  Minn.  98.  33  N.  W.  318,  5  A.  S.  R.  827; 

Midland  Xat'l  Bank  v.  Schoen,  123  Mo.  650,  27  S.  W.  547;  George 
on  Partnership,  p.  212. 

2  Draper  v.  Moore,  2  Cin.  R.    (Ohio)    167;   Copp  v.  Longstreet,  5  Colo. 

App.  282,  38  P.  601. 

Where  the  firm  is  engaged  in  the  real  estate  business  its  lamls  will  be 
considered  as  personalty  and  a  bond  for  title  executed  in  the  firm 
name  by  one  partner,  without  the  others'  consent,  binds  the  firm, 
and  win  be  enforced  against  both,  Eovelsky  v.  Brown,  92  Ala.  522, 
9  So.  182,  25  A.  S.  R.  83;  Paton  v.  Baker,  62  Iowa  704,  15  N.  W, 
586;  Kreutzer  v.  Lynch,  122  Wis.  474,  100  N.  W.  887,  Statute  of 
Frauds. 


307  ELECTION  BY  PARTNERS  §  807 

option,  however,  must  be  exercised  and  notice 
given  on  behalf  of  all  the  partners,  since  the  option 
right  runs  to  them  and  not  to  any  individual 
partner.'  If  an  option  is  taken  by  the  members  of 
a  partnership  on  property  outside  of  its  partner- 
ship business,  then,  as  to  that  particular  transac- 
tion, the  partnership  relation  of  principal  and 
agent  above  noted,  does  not  exist,  and  the  right  of 
the  indi^-idual  members  to  elect  and  give  notice 
must  be  determined  in  accordance  with  the  rule 
relating  to  joint  or  co-contractors.^ 

Sec.  807.  SAME.  PARTNERS.  CHANGE  IN 
MEMBERSHIP.— In  a  suit  for  specific  perform- 
ance of  a  covenant  to  renew  a  five  year  lease,  it  is 
immaterial  that  at  a  certain  time  during  the  first 
term  of  the  lease,  another  person  held  an  interest 
by  assignment  of  one  of  the  partners  in  the  part- 
nership, where  the  persons  who  constituted  the 
partnership  at  the  time  of  the  election  to  renew, 
were  the  same  persons  who  were  members  of  the 
firm  at  the  time  of  the  execution  of  the  lease  to 
them.^ 

Defendant  leased  to  plaintiffs,   co-partners,   a 
newspaper,  the  agreement  providing  for  a  renewal 

2  The  general  rule,  however,  is  that  a  partner,  by  his  deed  alone,  can  not, 

without  proper  ^^Titten  authority  from  the  other  partners,  convey  the 
joint  interest  of  the  firm  in  the  land,  Kovelsky  v.  Brown,  supra. 

3  See  Pearson  v.  Millard,  150  X.  C,  303,  63  S.  E,  1035,  where  one  part- 

ner for  himself  elected  and  this  was  held  good,  the  optionor  not 
objecting  to  the  election  and  the  other  partner  having  assigned  to 
the  one  electing. 

4  See  Sees.  805,  811 ;  also  WiswaU  v.  McGowan.  2  Barb.  (X.  Y.)  270. 

1  Fred  Gorder  &  Son  v.  Pankonin,  83  Xeb.  204,  119  X.  W.  449. 


§  807  LAW  OF  OPTION  CONTRACTS  308 

for  a  further  term  and  containing  a  provision  that, 
in  case  of  the  termination  of  the  partnership,  the 
partner  succeeding  to  the  business  might  continue 
by  himself  alone  or  by  a  new  partnership  satisfac- 
tory to  defendant.  The  old  partnership  was  dis- 
solved and  a  new  one  was  formed  in  which  one  of 
the  partners  held  only  a  nominal  interest.  The 
other  partner  was  held  to  be  entitled  to  specific 
enforcement  of  the  covenant  for  renewal.^ 

Where  a  lease  to  a  partnership  for  three  years 
gave  an  unrestricted  privilege  of  renewal  for  three 
years  more,  at  the  option  of  the  partners,  the 
assignment  by  one  member  of  all  his  interest 
therein  to  the  other,  transferred  to  the  remaining 
member  the  right  to  a  renewal  of  the  lease. ^  In 
another  case,  it  was  held  that  a  lease  to  a  partner- 
ship firm  with  option  to  renew,  was  not  a  mere 
joint  option  to  the  four  partners  which  would  be 
revoked  by  the  death  of  one  of  them  before  the 
option  was  exercised,  but  was  an  absolute  right  of 
the  firm  which  could  be  exercised  by  a  new  firm, 
composed  of  the  surviving  partners  which  suc- 
ceeded the  original  lessee  and  which  had  an  assign- 
ment of  the  interest  of  the  deceased  partner,  as 
provided  by  the  partnership  agreement.* 

2  rioyd  V.  Storrs,  144  Mass.  56,  10  N.  E.  743. 

Power  of  partner  to  surrender  lease,  see  Bergland  v.  Frawley,  72  Wis. 

559,  40  N.  W.  372 ;  James  v.  Pope,  19  N.  Y.  324. 
Eights  as  between  partners  on  renewal  of  lease  made  by  one,  Knapp  v, 

Eeed,  88  Neb.  754,  130  N.  W.  430,  Ann.  Gas.  1912B,  1095. 

8  Barbee  v.  Greenberg,  144  N.  C.  430,  57  S.  E.  125,  12  Ann.  Gas.  967. 
4  Liggett  V.  Kaufman,  231  Pa.  398,  80  Atl.  871. 


309  ELECTION  BY  REPRESENTATIVE  §  808 

Sec.  808.  SAME.  REPRESENTATIVE  OF 
DECEASED  OPTIONEE.— The  purchaser  of 
shares  of  stock  at  a  pledge  sale  agreed  with  the 
pledgor  to  return  the  shares  upon  payment  of  a 
certain  sum.  The  pledgor  died  and  his  administra- 
tor made  timely  tender  of  payment,  and  the 
purchaser  refused  to  return  the  shares,  and  it  was 
held  the  administrator  had  cause  of  action  to  com- 
pel the  transfer  of  the  shares.^ 

A  lease  with  option  to  purchase  running  to  the 
lessee,  his  heirs,  etc.,  inures  to  the  benefit  of  the 
heirs  of  the  lessee  and  they  can  exercise  the  option.- 
It  is  otherwise  where,  as  construed  by  the  court, 
the  option  privilege  is  personal  to  the  optionee.  In 
such  case,  according  to  the  Illinois  rule,  where  the 
optionee  dies  during  the  time  limit  without  elect- 
ing, he  has  no  estate  in  the  property  which  descends 
to  the  heirs.'  There  does  not  seem  to  be  uniformity 
of  decision  on  this  point.  In  New  York  it  is  held 
that  under  a  covenant  in  a  lease  for  renewal  which 
does  not  run  to  the  heirs,  etc.,  of  the  lessee,  upon 
the  death  of  the  lessee,  those  who  succeed  to  his 
rights  may  compel  a  renewal.^ 

1  Sayward  v.  Houghton,  119  Cal.  545,  51  P.  853,  52  P.  44. 

2  Ankeny  v.  Eichardson,  187  Fed.  550,  109  C.  C.  A.  316. 

By  administrator  for  benefit  of  next  of  kin,  Adams  v.  Kensington 
Vestry,  In  re,  54  L.  J.  Ch.  87,  27  Ch.  Div.  394,  51  L.  T.  Rep.  382, 
32  Wkly.  E.  883. 

3  Sutherland  v.  Goodnow,  108  HI.  528,  48  Am.  Rep.  560. 

Sutherland  v.  Parkins,  75  El.  338,  the  theory  was  that  the  heir  could 
not  take  money  from  the  personal  estate  to  purchase  for  himself 
property  which  his  ancestor  was  not  bound  to  purchase  and  perhaps 
would  not  have  purchased.  The  same  conclusions  seem  to  have  been 
reached  on  similar  facts  in  Newton  v.  Newton,  11  E.  I.  390,  23 
Am.  Eep.  476. 

4  Kolasky  v.  Michels,  120  N.  Y.  635,  24  N.  E.  278. 


§  809  LAW  OF  OPTION  CONTRACTS  310 

Sec.  809.  TO  WHOM  NOTICE  MUST  BE 
GIVEN.  OPTIONOR.  AGENT.— The  rules  laid 
down  in  preceding  sections  with  reference  to  the 
person  authorized  to  exercise  the  option  privilege 
and  give  notice,  apply,  in  a  general  way,  to  the 
person  to  whom  notice  of  the  exercise  of  the 
option  must  be  given.  Unless  the  option  otherwise 
provides,  and  it  may  legally  provide  that  notice 
may  be  given  to  a  person  other  than  the  optionor, 
notice  of  the  fact  that  the  option  is  exercised  must 
be  given  to  the  optionor.^  In  law,  this  means  notice 
may  be  given  to  the  agent  of  the  optionor.-  Of 
course,  the  agent  must  be  one  authorized  to  receive 
the  notice.  Leaving  the  notice  with  a  mere  employee 
of  the  optionor  is  not  sufficient.^ 

1  Breen  v.  Mayne,  141  Iowa  399,  118   N.  W.  441;   Weaver  v.  Burr,  31 

W.  Va.  736,  8  S.  E.  743,  3  L,  E.  A.  94. 

2  Smith  V.  Gibson,  25  Neb.  511,  41  N.  W.  360,  notice  was  given  to  the 

person  who  as  lessor's  agent  executed  the  lease  containing  the  option 
and  this  was  held  good;  see  Broadway  &  S.  A.  R.  Co.  v.  Metzger, 
15  N.  Y.  S.  662,  27  Abb.  N.  C.  160 ;  see  Hayes  v.  Goldman,  71  Ark. 
251,  72  S.  W.  563,  notice  to  clerk  not  good,  but  holding  over  was 
election  to  renew. 

Notice  addressed  to  the  secretary  of  the  optionor — corporation,  with- 
out adding  designation  of  his  office,  is  good.  Carton  v.  Wilson,  13 
Ont.  L.  Rep.  412. 

Vote  of  school  board  to  purchase  construed  as  acceptance  of  offer  there- 
tofore made  by  a  particular  person,  though  not  named,  McManus  v. 
City  of  Boston,  171  Mass.  152,  50  N.  E.  607. 

3  Gross  V.  Arnold,  177  HI.  575,  52  N.  E.  867 ;  see  Sizer  v.  Clark,  116  Wis. 

534,  93  N.  W.  539,  note  tendered  at  office  of  attorney  for  optionor. 

Service  of  notice  of  election  to  sell  stock  back  to  promoters  of  cor- 
poration under  subscription  agreement  of  guarantee,  etc.,  is  not  good 
when  served  upon  the  person  who  acted  as  agent  in  securing  the 
subscription,  Rogers  v.  Burr,  105  Ga.  432,  31  S.  E,  438,  70  A.  S. 
R.  50. 

As  to  partners,  see  Sec.  806a. 


311  ELECTION — NOTICE   TO   WHOM  §  810 

Sec.  810.  SAME.  GRANTEE  OF  OPTIONOR. 
— Where  the  optionor  conveys  the  optioned  prop- 
erty to  a  third  person  who  has  no  notice  of  a  prior 
option  given  by  the  optionor  to  another  person,  and 
who  is  a  bona  fide  purchaser  within  the  rule  on 
that  subject,  the  third  person  takes  the  title  to  the 
property  free  from  the  option  privilege.^  In  such 
case,  notice  by  the  optionee  of  the  exercise  of  the 
option,  given  to  the  bona  fide  purchaser  would  not 
be  sufficient  either  to  raise  a  binding  contract  or 
to  bind  the  grantee  to  convey.  Where,  however, 
the  grantee  has  notice,  it  is  held  in  California,  that 
notice  of  election  is  properly  given  to  the  grantee.''' 
And  in  other  jurisdictions  it  is  held  that  notice  is 
properly  given  to  the  original  optionor-grantor.^ 

It  is  believed  the  equitable  rule  of  notice  of 
outstanding  rights  in  third  persons  in  the  property 
conveyed,  does  not  go  so  far  as  to  compel  the 
grantee  with  notice  to  perform  the  obligations  of 
the  grantor,  in  the  absence  of  an  agreement  on  his 
part  amounting  in  effect  to  a  novation,  except, 
perhaps,  in  those  cases  where,  as  in  leases  contain- 
ing options  to  purchase  and  the  like,  it  is  held  the 

1  See  Sec.  515. 

2  Walter  G.  Reese  Co.  v.  House,  162  Cal.  740,  124  P.  442 ;  see,  however, 

Parkside  Realty  Co.  v.  MacDonald,  166  Cal.  426,  137  P.  21. 
McLaughlin  v.  Royce,  108  Iowa  254,  78  N.  W.  1105,  holds,  on  the  facts, 

that  election  must  be  made  to  grantee  of  optionor. 
See  Burt  v.  Henry,  10  Ala.  874,  holding  tender  by  obligee  under  bond 

for  title  on  condition  that  a  certain  note  was  paid,  should  be  made 

to  assignee  of  note. 

3Sizer  v.  Clark,  116  Wis.  534,  93  N.  W.  539;  Frank  v.  Stratford- 
Handcock,  13  Wyo.  37,  77  P.  134,  110  A.  S.  R.  963,  67  L.  R.  A.  571; 
Horgan  v.  Russell,  24  N.  D.  490,  140  N.  W.  99,  43  L.  R.  A.  (N.  S.) 
1150. 


§  810  LAW  OP  OPTION  CONTRACTS  312 

covenant  runs  with  tlie  land,''  or  where,  perhaps, 
the  grantee  obligates  himself  to  perform  the  option 
agreement.^  The  rule,  as  we  understand  it,  not- 
withstanding the  transfer,  permits  the  optionee  to 
enforce  the  option  contract  against  the  original 
optionor^  and,  also,  against  his  grantee  in  the  sense 
only  that  the  rights  of  the  latter  are  subject  to  the 
enforcement  of  the  option  contract  and  whose  title 
as  grantee  may  be  divested  where  he  is  made  a 
party  to  the  suit/ 

The  difficulty  here  is  that  an  option  contract  can 
be  raised  to  a  bilateral  contract  only  by  an  election 
and,  in  the  absence  of  what  in  effect  amounts  to 
a  novation,  it  is  not  at  all  clear  how  an  option 
contract  can  be  turned  into  a  bilateral  contract  by 
an  election  given  to  a  grantee  who  is  not  a  party 
to  the  contract.  However,  there  may  be  equitable 

4  See  Callan  v.  McDaniel,  72  Ala.  96,  lease ;  Piggot  v.  Mason,  1  Paige 

(N.  Y.)  412,  lease;  Laffan  v.  Naglee,  9  Cal.  663,  70  Am.  Dec.  678, 
renewal  of  lease;  Blackmore  v.  Boardman,  28  Mo.  420,  renewal  of 
lease;  Wilkinson  v.  Pettit,  47  Barb.  (N.  Y.)  230,  to  continue  lease; 
McClung  V.  McPherson,  47  Ore.  73,  81  P.  567,  option  to  lessor  to 
terminate  lease;  Blount  v.  Connolly,  110  Mo.  App.  603,  85  S.  W. 
605,  lease. 

5  See  Springer  v.  De  Wolf,  194  HI.  218,  62  N.  E.  542,  56  L.  R,  A.  465, 

88  A.  S.  R.  155,  affirming  93  111.  App.  260. 

6  See  Neal  v.  Jefferson,  212  Mass.  517,  99  N.  E.  334,  Ann.  Gas.  1913D  205; 

Harrington  v.  Barnes,  10  Gush.  106  (Mass.)  ;  Parkside  Realty  Co.  v. 
MacDonald,  166  Cal.  426,  137  P.  21. 

7  See  Veith  v.  McMurtry,  26  Neb.  341,  42  N.  W.  6 ;  Frank  v.  Stratf  ord- 

Handcock,  J3  Wyo.  37,  77  P.  134,  136,  67  L.  R.  A.  571,  110  A.  S.  R. 
963;  Sizer  v.  Clark,  116  Wis.  534,  93  N.  W.  539;  Harper  v.  Runner, 
85  Neb.  343,  123  N.  W.  313;  Bentley  v.  Barnes,  162  Ala.  524,  50 
So.  361,  grantee  is  trustee  for  vendor;  Horgan  v.  Russell,  24  N.  D. 
490,  140  N.  W.  99,  104,  43  L.  R.  A.  (N.  S.)  1150. 
The  grantor  would  not  be  a  necessary  party  where  his  grantee  had 
succeeded  to  the  estate  covered  by  the  purchase  when  the  purchaser 
has  a  contract  of  sale  and  purchase,  Vermont  Marble  Go.  v.  Mead, 
(Vt.)  80  Atl.  852. 


313  •  NOTICE  TO  JOINT  OR  SEVERAL  OPTIONORS  §  SH 

circumstances  which  would  justify  a  court  of 
equity  in  holding  that  notice  of  election  given  to 
a  grantee  is  sufficient.* 

Sec.  811.     SAME.     JOINT  OR  SEVERAL 
OPTIONORS.— The  mere  fact  that  the  optionors 
are  the  owners  of  the  optioned  property  as  tenants 
in  common,  or  as  joint  tenants,  does  not,  as  we 
have  seen,  clothe  any  of  the  tenants  with  power  or 
authority  to  give  an  option  upon  the  common  prop- 
erty that  wm  be  binding  upon  any  interest  except 
his  own.  The  relation  of  principal  and  agent  does 
not  exist  between  tenants  so  far  at  least  as  the 
right  to  dispose  of  the  common  property  is  con- 
cerned. Nor  are  they  partners.'  With  reference  to 
the  subject  matter  under  consideration,  the  relation 
between  them  is  not  different  from  that  existing 
between  owners  of  separate  and  distinct  parcels  of 
land,  with  the  consequence  that  the  power  of  one 
to  seU  or  dispose  of  the  interest  of  the  other  as  well 
as  to  accept  or  receive  notice  of  election,  must  rest 
upon    authority    either    impliedly    or    expressly 
granted. 

The  form  of  the  option  contract  may  be  such 
that,  while  all  of  the  optionors  join  in  the  same 
instrument,  still  the  contract  of  each  is  several, 
that  is,  each  agrees  separately  to  grant  an  option 
privilege  on  his  interest  or  estate  in  the  property. 

8  See  Noyes  v.  Clark,  7  Paige  (N.  Y.)  179,  32  Am.  Dec.  620,  where  tender 
of  interest  on  debt  to  original  creditor  was  held  good  though  the 
debt  had  been  assigned  and  the  debtor  had  notice. 

1  Pearls  v  Covillaud,  6  Cal.  617,  65  Am.  Dee.  543;  Wiswall  v.  McGowan, 
2  Barb  (N.  Y.)  270;  Hungerford  v.  Gushing,  8  Wis.  332;  Kreutzer 
V   Lynch,  122  Wis.  474,  100  N.  W.  887,  notice  to  managing  partner. 


§  811  LAW  OF  OPTION   CONTRACTS  314 

In  such  case  there  are  as  many  separate  contracts 
as  there  are  optionors,  and  consequently,  notice  of 
election  must  be  given  to  each.^ 

On  the  other  hand,  if,  as  is  usually  the  case,  all 
the  optionors  join  in  the  same  instrument  in  grant- 
ing an  option  privilege  from  which  all  receive  a 
benefit,  the  contract,  so  far  as  the  optionee  is  con- 
cerned, in  the  absence  of  anything  in  the  instru- 
ment to  indicate  a  contrary  intention,  is  deemed  to 
be  joint,^  that  is,  the  contract  imposes  upon  them, 
as  joint  contractors,  a  joint  obligation,  in  favor  of 
the  optionee  and,  according  to  some  decisions,  while 
as  between  themselves  they  still  sustain  the  relation 
of  tenants,  that  status  is  a  negligible  quantity  so 
far  as  the  optionee  is  concerned.  According  to  this 
view,  notice  to  one  of  the  co-contractors  is  notice  to 
all.^  Other  decisions  hold  that,  with  reference  to 
the  exercise  of  the  option  privilege  and  giving 

2Watkins  v.  Youll,  70  Neb.  81,  96  N.  W.  1042;  see  Nott  v.  Owen,  86 
Me.  98,  29  Atl.  943,  41  A.  S.  K.  525;  James  v.  Darby,  100  Fed.  224, 
40  C.  C.  A.  341. 

3  Eveleth  v.  Sayer,  96  Me.  227,  52  Atl.  639,  also  holding  that  the  contract 

can  not  be  treated  as  joint  or  several  at  the  option  of  the  promisees; 
Glimmer  v.  Mairs,  140  Cal.  535,  74  P.  26,  joint  and  several;  see 
Walter  v.  Eafalsky,  186  N.  Y.  543,  79  N.  E.  1118,  affirming  98  N.  Y. 
S.  915,  113  App.  Div.  223. 

4  Wright  V.  Kayner,  150  Mich.  7,  113  N.  W.  779.   In  this  case  the  minority 

opinion  holds  that  notice  to  one  of  the  lessors  of  the  exercise  of  the 
option  to  renew  was  not  sufficient  because  not  given  to  the  other 
lessor.  The  majority  opinion  holds  that  the  lessors  were  joint  con- 
tractors, notwithstanding,  they  were  tenants  in  common  and  that 
consequently  notice  of  the  election  to  one  of  the  joint  contractors, 
was  sufficient,  citing  Blood  v.  Goodrich,  9  Wend.  (N.  Y.)  68,  24  Am. 
Dec.  121  and  Detlor  v.  Holland,  57  Ohio  St.  492,  49  N.  E.  690,  40 
L.  E.  A.  266;  Blood  v.  Goodrich,  supra,  was  followed  in  Eockland- 
Kockport  L.  Co.  v.  Leary,  203  N.  Y.  469,  97  N.  E.  43,  Ann.  Gas. 
1913B,  62,  where  it  is  held  that  notice  of  election  to  one  of  several 
* '  heirs ' '  who  was  the  ' '  managing  heir ' '  and  who  refused  to  convey, 
was  the  refusal  of  all. 


315         ELECTION NOTICE  TO  REPRESENTATIVE       §  812 

notice  by  the  optionee,  the  optionors,  though  ten- 
ants in  common  or  joint  tenants,  do  not  sustain  the 
relation  of  principal  and  agent  and  that,  conse- 
quently, notice  to  one  is  not  notice  to  all.^ 

Notice  to  one  of  two  executors  who  had  given  an 
option,  is  sufficient.^  A  written  notice  read  to  both 
husband  and  wife  (optionors)  but  addressed  to 
the  husband  alone,  is  sufficient  when,  at  the  time, 
it  is  stated  the  notice  is  intended  for  both/ 

Sec.  812.  SAME.  REPRESENTATIVE  OP 
DECEASED  OPTIONOR.  MINORS.— Death  of 
the  optionor  does  not  terminate  the  option.^  And 
if  tender  is  made  within  the  time  and  at  the  place 
appointed  in  the  option,  it  is  sufficient,  and  the 
optionee  will  not  be  barred  from  specific  perform- 
ance  because   of  his   failure   to   have   a   special 

4  The  Supreme  Court  of  California,  in  Hoover  v.  Wolfe,  167  Cal.  337, 

139  P.  794,  holds  to  the  same  rule,  the  California  statute  providing 
that  an  offer  of  performance  may  be  made  to  any  one  of  two  or  more 
joint  creditors. 

5  Eisler  v.  Marshall,  230  Pa.  208,  79  Atl.  496,  notice  addressed  to  all  but 

served  on  one  only;  Sogers  v.  Burr,  105  Ga.  432,  31  S.  E.  438,  70 
A.  S.  R.  50. 

If,  as  is  sometimes  said,  in  support  of  this  view,  the  obligation  of  each 
joint  tenant  is  several,  then  it  would  follow  that  the  optionee  could 
be  compelled  to  accept  separate  deeds  from  each,  rather  than  one 
joint  deed  from  all,  but  see  Lane  v.  Ziemer,  (Ind.  App.)  98  N.  E.  741. 

Redemption  by  payment  to  one  joint  owner  if  the  land  is  not  available 
against  the  other,  see  Maddox  v.  Bramlett,  84  Ga.  84,  11  S.  E.  129. 

6  Trogden  v.  WiUiams,  144  N.  C.  192,  56  S.  E.  865,  10  L.  R.  A.  (N.  S.)  867. 

7  Thompson  v.  Willard,  219  Pa.  170,  68  Atl.  46. 

I  See  Sec.  709. 

Notice  is  properly  given  to  the  administrator,  Hollis  v.  Libby,  101  Me. 
302,  64  Atl.  621. 


§  812  LAW  OP  OPTION  CONTRACTS  316 

administrator  appointed.^  Another  case  holds  that 
in  case  of  death  of  the  optionor,  notice  should  be 
given  to  his  administrator,^  and  implies  a  duty  on 
the  part  of  the  optionee  to  have  one  appointed. 

But  it  must  be  apparent  that  this  can  not  be 
accepted  as  a  general  rule.  In  the  case  cited,  the 
election  and  tender  were  made  at  a  place  other  than 
that  expressly  fixed  by  the  option,  but  at  the  place 
where  the  property  was  redeemable.  Technically, 
therefore,  the  optionee  failed  legally  to  elect.  If 
he  had  made  his  demand  and  tender  at  the  place 
fixed  by  the  option,  or  if  none  had  been  expressly 
fixed,  then  at  the  place  appointed  by  law,  his  elec- 
tion would  have  been  good  on  the  authority  of  the 
Wisconsin  case  cited  supra,  for,  indeed,  it  would 
be  a  strange  legal  predicament  if,  through  no  fault 
of  his,  it  should  come  about  there  was  not  sufficient 
time  between  the  death  of  the  optionor  and  the 
expiration  of  the  option  time  within  which  the 
optionee  could  take  the  necessary  court  proceedings 
to  have  an  administrator  appointed,  and  by  reason 

2  Mueller  v.  Nortmann,  116  Wis.  468,  93  N.  W.  538,  96  A.  S.  E.  997, 

tender  is  here  employed  to  include  election;  payment  of  the  price  was 
provided  for  in  the  decree. 

3  Prince  v.  Robinson's  Adm'rs,  14  Fed.  631. 

In  Maughlin  v.  Perry,  35  Md.  352,  the  lessee  under  a  lease  giving  an 
option,  prior  to  the  expiration  of  the  lease,  brought  suit  for  specific 
performance  against  the  lessor's  grantee  and  the  administrator  of 
the  original  lessor  and  alleged  readiness,  etc.,  to  pay  the  price.  This 
was  held  sufficient  as  an  election.  The  court  said  plaintiff  had  good 
ground  to  go  to  a  court  of  equity  and  have  all  the  parties  brought 
in  so  that  upon  payment  of  the  money  plaintiff  would  be  able  to 
obtain  a  deed.    See,  also,  Page  v.  Hughes,  41  Ky.  (2  B.  Mon.)  439. 


317  BLECTION — NOTICE  TO  REPRESENTATIVE  §  812 

of  this  fact,  the  optionee  should  lose  his  option 
rights.* 

When,  by  the  terms  of  the  option,  notice  of 
election,  in  case  of  the  death  of  the  optionor,  was 
required  to  be  given  to  his  heirs,  notice  to  one  adult 
heir  and  his  refusal  to  act,  was  sufficient,  the  court 
saying  that  no  good  and  sufficient  deed  could  be 
given  unless  all  of  the  heirs  joined  therein.^ 

In  another  case,  the  court  holds  that  when  the 
optionor  dies  during  the  time  limit  of  the  option 
and  before  election  to  purchase,  notice  of  election 
must  be  given  to  his  minor  heir,  even  though  he 
could  not  convey  except  by  guardian  under  order 
of  the  court.  The  reasoning  of  the  court  is  that  an 
election  is  necessary  to  raise  an  agreement  of  sale. 
The  court  held,  however,  that  the  rule  would  not 
apply  to  tender  of  the  price,^  as  strict  tender,  in 
such  cases,  is  not  required.^ 

4  The  federal  case  cited,  supra,  and  some  other  cases,  reflect  a  mistaken 

notion  concerning  an  election  by  implying  that  all  the  essentials  of 
contract  making,  such  as  mutuality  of  assent,  must  be  present  in 
order  to  make  a  good  election  under  an  option  contract.  Clearly  this 
can  not  be  true.  The  election  turns  the  option  into  a  bilateral  con- 
tract but  the  election  does  not  vKjJce  the  bilateral  contract.  See 
Section  814. 

5  Eockland  etc.  Co.  v.  Leary,  203  N.  Y.  469,  97  N,  E.  43,  Ann.  Cas.  1913B, 

62,  also  holding  that  when  the  lease-option  provides  that  notice  of 
election  shall  be  given  to  the  lessor  or  his  ' '  legal  representative, ' '  it 
is  to  be  presumed  that  executor  or  administrator  is  meant.  "Per- 
sonal representatives ' '  as  said  in  a  deed,  mean  those  who  succeed 
the  grantee  in  the  title  of  the  lands,  Woodruff  v.  Woodruff,  44 
N.  J.  Eq.  349,  16  Atl.  4,  1  L.  E.  A.  380;  Chas.  J.  Smith  Co.  v. 
Anderson,  (N.  J.  Eq.)  95  Atl.  358,  notice  to  one  of  the  devisees 
sufficient. 

6  Mason  v.  Payne,  47  Mo.  517 ;  Woods  v.  Hyde,  31  L.  J,  Ch.  295,  6  L.  T. 

Eep.  (N.  S.)  317,  10  Wkly.  Eep.  339,  notice  served  upon  minor  heir 
and  guardian. 


§  813  LAW  OF  OPTION  CONTRACTS  318 

Sec.  813.  ELEMENTS  OF  ELECTION.— We 
have  said  that  an  election  is  the  act  of  the  optionee 
which  turns  the  option  contract  into  a  binding 
promise  on  the  part  of  the  optionor  to  sell.  Having 
determined  by  whom  and  to  whom  the  election 
must  be  made,  it  becomes  necessary  to  find  out  what 
are  the  elements  of  the  act  which  is  commonly 
called  "exercising  the  option."  There  must  be  a 
decision  of  the  optionee  to  exercise  the  option  and 
this  decision  must  be  communicated  to  the  optionor. 
The  decision,  however,  when  not  an  act  to  be  per- 
formed^ is  necessarily  involved  in  the  act  of  com- 
municating it,  so  that,  for  all  practical  purposes, 
it  may  be  said  that  an  election  is  the  timely  commu- 
nication to  the  optionor,  by  the  optionee,  of  the 
intention  of  the  latter  to  purchase  the  optioned 
property,  at  the  price  and  upon  the  terms  of  the 
option  contract,  and  also  a  tender  of  any  money 
and  an  offer  to  perform  any  other  act  which,  by 
the  terms  of  the  option  contract,  are  made  part  of 
the  act  of  election. 

Depending  on  the  terms  of  the  option  and  the 
application  of  the  Statute  of  Frauds,  the  commu- 
nication may  be  oral,  in  writing,  or  it  may  consist 

6  An  election  in  time  and  offer — after  the  death  of  the  lessor — optionor 
to  pay  the  purchase  money  entitles  the  optionee  to  specific  perform- 
ance as  against  the  heirs  and  devisees  of  the  former,  Buckwalter  v. 
Klein,  5  Ohio  Dec.  55. 

TEockland  etc.  Co.  v.  Leary,  203  N.  Y.  469,  97  N.  E.  43,  Ann.  Cas. 
1913B,  62. 

1  There  may  be  an  election  without  formal  notice,  or,  in  fact  any  notice, 
except  such  as  may  arise  from  the  act  of  election  itself.  Thus,  if 
the  option  provides  as  the  act  of  election,  the  payment  by  the  optionee 
of  a  certain  sum  of  money  at  a  certain  bank  (not  the  optionor),  the 
payment  of  the  money  to  the  bank  constitutes  the  election  without 
further  notice.    See  Sec.  801,  note  2;  Sec.  817. 


319  ELECTION    MUST  BE   COMMUNICATED  §  814 

of  acts.  It  must  be  timely  given  and  at  ttie  place 
appointed  by  law,  or  by  the  terms  of  the  contract, 
and  the  election  must  be  upon  the  precise  terms 
and  conditions  of  the  option  contract. 

Sec.  814.  THE  ELECTION  MUST  BE  COM- 
MUNICATED.— The  purpose  of  an  acceptance  is 
to  raise  an  offer  to  a  binding  promise  on  the  part 
of  the  proposer,  and  since  there  can  be  no  agree- 
ment and,  therefore,  no  contract  arising  out  of  an 
offer,  without  meeting  of  the  minds  of  the  parties, 
it  necessarily  follows  that  unless  the  acceptance  is 
communicated  to  the  proposer,  there  is  no  binding 
promise  made,  that  is,  no  contract  raised.^  As  said 
in  a  New  York  case,  a  mere  mental  determination 
to  accept  an  oifer,  not  communicated  by  speech  or 
put  in  course  of  communication  by  act,  to  the  other 
party,  is  not  an  acceptance  of  an  offer  which  will 
bind  the  other  party. - 

1  Canty  v.  Brown,  11  Cal.  App.  487,   105  P.  428;   Weaver  v.  Burr,  31 

W.  Va.  736,  8  S.  E.  743,  3  L.  R.  A.  94;  Dyer  v.  Duffy,  39  W.  Va. 
148,  19  S.  E.  540,  24  L.  R.  A.  339;  Clark  v.  Harmer,  5  App.  D.  C. 
114;  Breen  v.  Mayne,  141  Iowa  399,  118  N.  W.  441;  Rogers  v.  Burr, 
105  Ga.  432,  31  S.  E.  438,  70  A.  S.  R.  50,  personal  to  offeree,  31 
S.  E.  441;  Kibler  v.  Caplis,  140  Mich.  28,  103  N.  W.  531,  112 
A.  S.  R.  388;  Britton  v.  Phillips,  24  How.  Pr.  (N.  Y.)  111. 
Beckwith  v.  Cheever,  21  N.  H.  (1  Fost.)  41,  offeree  told  offerer  he 
would  accept  if  he  could  get  his  brother  to  assist  him  to  cut  and 
take  timber  of  offerer;  offeree  engaged  his  brother  to  assist,  but 
never  notified  offerer  that  he  had  accepted  his  proposition,  and  it  was 
held  there  was  no  acceptance. 

2  White  V.  Corlies,  46  N.  Y.  467;  Trounstine  v.  Sellers,  35  Kan.  447,  11 

P.  441. 

Mere  readiness  on  the  part  of  the  purchaser  to  pay  is  not  sufficient, 
Bundy  v.  Dare,  62  Iowa  295,  17  N.  W.  534. 

"Mere  communicated  mental  election  to  return  the  stock,"  not  suffi- 
cient, Olsen  V.  Northern  S.  S.  Co.,  70  Wash.  493,  127  P.  112. 


^  bl4  LAW  OP  OPTION  CONTRACTS  320 

With  reference  to  a  real  option,  the  purpose  of 
an  election  is  to  turn  the  option  into  a  bilateral 
contract,  but  there  is  this  difference  between  an 
offer  and  an  option :  an  offer  is  a  first  invitation  for 
a  bargain  and  it  does  not  become  a  contract  until 
acceptance  before  withdrawal,  the  minds  of  the 
parties  meeting  in  common  agreement,  it  is  said, 
by  virtue  of  the  acceptance.  An  option  is  a  con- 
tract immediately  it  is  concluded,  but  as  best  illus- 
trating the  point  in  hand,  it  may  be  said  it  is  an 
agreement  giving  the  optionee  the  right  to  turn  the 
option  agreement  into  a  contract  to  convey  upon 
the  performance  by  him  of  an  act  called  election. 
In  short,  an  option  is  a  conditional  agreement  to 
convey.^  An  election,  like  an  acceptance,  must  be 
communicated,  but  unlike  the  acceptance  of  an 
offer,  it  is  not  necessary,  to  a  valid  election,  that 
there  shall  be  concurrence  of  the  minds  of  the 
parties  to  raise  the  bilateral  contract.^ 

It  is  competent  for  the  parties  to  dispense  with 
notice  or  communication  of  the  acceptance  or  the 
election,  as  where,  upon  doing  some  overt  act,  the 
contract  is  to  become  binding,^  such  as  payment  or 
tender  of  the  price,  at  the  place  appointed  by  the 
option,®  or  the  pajanent  of  a  particular  note,^  or 
election  at  a  particular  time  and  place.* 

3  Page  V.  Martin,  46  N.  J.  Eq.  585,  20  Atl.  46. 

4  See  Sec.  801,  note  2. 

5  See  Mactier  Adm'rs  v.  Firth,  6  Wend.  (N.  Y.)  103,  21  Am.  Dec.  262; 

First  Nat'l  Bank  v.  Watkins,  154  Mass.  385,  28  N.  E.  275. 

6  Mueller  v.  Nortmann,  116  Wis.  468,  93  N.  W.  538,  96  A.  S.  E.  997. 

7  Burt  V.  Henry,  10  Ala.  874. 

8  Omer  v.  Farlow,  46  111.  App.  122,  holding  attendance,  at  the  time  and 

place  fixed,  was  a  good  election,  the  optionor  himself  being  absent. 


321  ELECTION — TERMS  OP  OPTION    CONTROL  §  815 

Sec.  815.  TERMS  OF  OPTION  CONTROL 
MODE  OF  ELECTION.— It  is  competent  for  the 
optionor  to  provide  in  the  option  that  notice  of 
election  shall  be  given  to  himself,  to  a  corporation. 
or  to  a  third  ]3erson  ;^  or  to  his  heirs  f  that  it  shall 
be  in  writing;^  the  time  when,  the  place  where, 
notice  and  tender  shall  be  made  ;"*  and  generally,  to 
impose  such  other  conditions  as  he  may  desire.^ 
These  stipulations  and  provisions  are  binding  upon 
the  optionee,  and  his  election  must  be  in  accordance 
therewith.^  But,  in  the  absence  of  express  provi- 
sions, the  election  must  be  communicated  to  the 
optionor  and  at  the  time  and  place  implied  by  law.' 

1  Roekland-Roekport  L.  Co.  v.  Leary,  203  N.  Y.  469,  97  N.  E.  43,  Ann. 

Gas.  1913B,  62. 

2  Rockland  etc.  Co.  v.  Leary,  supra. 

3  See  Sec.  816. 

4  Mueller  v.  Nortmann,  116  Wis.  468,  93  N.  W.  538,  96  A.  S.  E.  997 

Mercer  EI.  Mfg.  Co.  v.  Conn.  El.  Mfg.  Co.,  87  Conn.  691,  89  Atl.  909 
Vermont  Marble  Co.  v.  Mead,  (Vt.)  80  Atl.  852,  place  of  acceptance 
see  Olsen  v.  Northern  S.  S.  Co.,  70  Wash.  493,  127  P.  112. 

5  Winders  v.  Kenan,  161  N.  C.  628,  77  S.  E.  687,  payment  of  price. 

An  offer  by  letter,  concluding,  "Let  me  know  by  return  mail,"  re- 
quires an  acceptance  by  return  mail,  Ackerman  v.  Maddux,  26  N.  D. 
50,  143  N.  W.  147. 

Where  a  proposal  requires  acceptance  by  ' '  ^-ire  or  otherwise, ' '  a  verbal 
acceptance  or  one  by  telegram  is  sufficient,  Watson  v.  Coast,  35  W. 
Va.  463,  14  S.  E.  249. 

Provision  as  condition  of  election  that  optionee  could  comply  with  the 
conditions  of  the  option  as  to  ability  to  pay  price,  etc.,  Washington 
V.  Rosario  M.  &  W.  Co.,  28  Tex.  Civ.  App.  430,  67  S.  W.  459. 

6Breen  v.  Mayne,  141  Iowa  399,  118  N.  W.  441;  Sawyer  v.  Brossart,  67 
Iowa  678,  25  N.  W.  876,  56  A.  S.  R.  371. 
If  the  offer  directs  that  the  acceptance  be  sent  by  the  messenger  who 
brings  the  offer,  or  by  mail,  or  by  telegraph,  it  must  be  so  sent,  to 
be  effective,  Carr  v.  Duvall,  14  Pet.  77  (U.  S.). 

7  Canty  v.  Brown,  11  Cal.  App.  487,  105  P.  428,  the  reasonable  or  usual 
mode,  Civil  Code  Cal.,  Sec.  1582. 
21 — Option   Contracts 


§  816  LAW  OF  OPTION  CONTRACTS  322 

Sec.  816.  WRITTEN  OR  ORAL  ELECTION 
OR  ACCEPTANCE.— Communication  of  the  elec- 
tion, by  the  optionee  to  the  optionor,  by  word  of 
mouth,  as  well  as  an  oral  acceptance  of  an  offer,  is 
sufficient  in  all  cases  except  these :  (a)  where  writ- 
ten notice  is  required  by  the  terms  of  the  option 
contract;^  (b)  where  a  particular  act,  such  as 
pajanent  of  the  price,  is,  by  the  terms  of  the  option 
contract,  prescribed  as  the  mode  of  election;^  (c) 
where,  in  some  jurisdictions,  a  writing  is  necessary 
to  meet  the  requirements  of  the  Statute  of  Frauds. 

An  oral  election  as  being  within  or  without  the 
Statute  of  Frauds  is  presented  in  a  preceding 
Chapter,^  and  the  result  of  the  presentation  may 
be  summarized  by  saying  that,  in  most  jurisdic- 
tions, it  is  held  an  oral  election  of  a  written  option 
contract,  the  subject  matter  of  which  falls  within 

iBosshardt  &  W.  Co.  v.  Crescent  Oil  Co.,  171  Pa.  109,  32  Atl.  1120; 
Eastman  v.  Dunn,  34  R.  I.  516,  83  Atl.  1057;  Turner  v.  McCormick, 
56  W.  Va.  161,  49  S.  E.  28,  107  A.  S.  R.  904,  67  L.  R.  A.  853; 
Beller  v.  Robinson,  50  Mich.  264,  15  N.  W.  448;  Cambria  Iron  Co. 
V.  Leicly,  226  Pa.  122,  75  Atl.  186,  whether  given  is  question  of  fact. 

But  written  notice  may  be  waived  by  the  optionor,  McClelland  v.  Rush, 
150  Pa.  57,  24  Atl.  354;  Wood  v.  Edison  El.  HI.  Co.,  184  Mass.  523, 
69  N.  E.  364. 

See  Seaver  v.  Thompson,  189  HI.  158,  59  N.  E.  553,  holding  stipulation 
in  lease  requiring  written  notice  of  lessor 's  decision  not  to  build,  was 
for  benefit  of  lessee,  which  he  could  waive,  and  it  is  waived  by  receiv- 
ing rent  after  the  expiration  of  the  lease,  Probst  v.  Rochester  S.  L. 
Co.,  171  N.  Y.  584,  64  N.  E.  504. 

The  written  notice  need  not  be  subscribed  by  the  optionee  when  the 
writing  or  the  circumstances  in  connection  therewith  identify  it  as 
the  notice  called  for  by  the  option,  see  Wiener  v.  H.  Graflf  &  Co., 
7  Cal.  App.  580,  95  P.  167;  citing  Carleton  v.  Hobart,  14  Wkly, 
Rep.  772. 

2  See  Sees.  817,  839,  914,  924. 

3  Chapter  IV,  Sees.  414,  415. 


323  ELECTION — COMMUNICATED  BY  ACT  §  817 

the  Statute,  fully  meets  the  requirements  of  that 
Statute. 

Sec.  817.  COMMUNICATION  OF  ELECTION 
BY  ACT. — To  make  a  contract  having  mutuality, 
the  law  requires  that  the  minds  of  the  parties  shall 
meet  in  one  and  the  same  intention.  When  the 
parties  reach  this  point  in  their  negotiations  they 
have  arrived  at  agreement  and  a  contract  is  made. 
The  negotiations  for  the  contract  take  the  form  of 
a  proposal,  or  offer,  by  one  party  to  the  other. 
Acceptance  is  the  act  which  vitalizes  the  offer  and 
gives  it  legal  life  as  a  contract.  Excepting  the 
Statute  of  Frauds  and,  also,  the  express  provisions 
of  the  offer,  the  acceptance,  or  as  applied  to 
options,  the  election,  may  be  manifested  to  the 
proposer,  or  optionor,  by  an  act  of  the  other  party 
w^hich  presents  to  his  mind  the  present  intention  of 
that  party  to  accept  the  offer  or  to  exercise  the 
option.  This  act  may  be  neither  word  nor  writing 
but  conduct  simply  and  only.^ 

As  said  by  the  Supreme  Court  of  West  Virginia,^ 
the  election  may  consist  of  such  acts  to  be  done, 
which  the   optionor   has   expressly  or   impliedly 

1  Acceptance   may  be   by  writing  by   words   or   by  acts,   Houghwout   v. 

Boisaubin,  18  N.  J.  Eq.  315. 

Acceptance  may  be  shown  by  acts  of  the  parties,  Eastman  v.  Dunn, 
34  R.  I.  416,  83  Atl.  1057. 

Acceptance  may  be  inferred  from  conduct,  Weaver  v.  Burr,  31  W.  Va. 
736,  8  S.  E.  743,  3  L.  E.  A.  94. 

Acceptance  by  settling  upon  the  land  and  making  improvements,  Boyd 
V.  Brinckin,  55  Cal.  427. 

2  Weaver  v.  Burr,  supra;  delivery  of  notes,  Cutting  v.  Dana,  25  N.  J.  Eq. 

265;  ordering  goods,  Huggins  v.  Southeastern  L.  &  C.  Co.,  121  Ga. 
311,  48  S.  E.  933. 


§  818  LAW  OF  OPTION  CONTRACTS  324 

offered  to  treat  as  a  communication,  instancing  the 
deposit  of  a  letter  in  the  post  office  in  a  case  where 
the  offer  is  made  by  post. 

So,  an  election  may  consist  of  the  mere  act  of 
making  or  tendering  payment  of  the  price  at  the 
place  appointed  by  the  option,^  or  of  any  act  Avhich 
the  parties  have  stipulated  for  as  election  or  notice, 
as,  also,  any  act,  other  than  a  promise  to  be  made, 
the  performance  of  which  is  induced  by  the  pro- 
posal.* 

Sec.  818.  COMMUNICATION  OF  ELEC- 
TION BY  POST  OR  TELEGRAPH.— Where 
negotiations  for  an  option  are  conducted  and  con- 
cluded personally  by  the  parties  as  also  where  the 
offer  is  personally  made  by  the  proposer  to  the 
other  party,  it  is  implied  as  a  matter  of  law  that 
the  election  or  acceptance  must  be  made  personally 
to  the  proposer  or  optionor  and  it  is  not  binding 
upon  him  until  actually  communicated.^ 

3  Mueller  v.  Nortmann,  116  Wis.  468,  93  N".  W.  538,  96  A.  S.  R.  997 ; 

Raddatz  v.  Florence  Inv.  Co.,  147  Wis.  636,  133  N.  W.  1100;   see 
Kaufman  v.  All  Persons,  16  Cal.  App.  388,  117  P.  586. 

4  Schmitt  V.  Weil,  46  Ind.  App.  264,  92  N.  E.  178,  subscribing  for  stock 

under  proposal  by  president  to  re-pay  subscription  amount. 
But  this  rule  does  not  apply  to  a  case  where  the  offeree  is  given  the 
right,  on  the  happening  of  a  particular  event,  to  decide  to  accept  the 
offer  made.  In  such  case,  the  contract  is  not  completed  on  the  hap- 
pening of  the  event  until  the  decision  is  made,  Mactier  v.  Frith,  6 
Wend.  (N.  Y.)  103,  21  Am.  Dec.  262;  see  also  HiU  v.  Mathews,  78 
Mich.  377,  44  N.  W.  286. 

1  Weaver  v.  Burr,  31  W.  Va.  736,  8  S.  E.  743,  3  L.  R.  A.  94. 

Where  the  proposal  is  made  personally  and  the  parties  reside  in  dif- 
ferent states,  it  is  implied  that  acceptance  may  be  by  letter,  Wilcox 
V.  Cline,  70  Mich.  517,  38  N.  W.  555. 


325  ELECTION — COMMUNICATED   BY    CARRIER  §  818 

Where,  however,  in  other  cases,  negotiations  are 
begun  and  carried  on  through  the  post,  or  by  tele- 
graph,^ or  other  similar  means  of  communication,^ 
the  rule  is  that  the  acceptance,  or  election,  may  be 
communicated  to  the  other  party  by  the  same  mode 
of  communication,  the  explanation  being  that  the 
proposer  by  adopting  a  particular  carrier  to  com- 
municate his  message  thereby  impliedly  authorizes 
the  other  party  to  accept  or  elect  by  the  same 
carrier.* 

A  contract  is  raised  when  the  acceptance  or 
election,  not  consisting  of  an  act,  is  communicated, 
and  this  is  true  both  where  the  negotiations  are 
conducted  personally  by  the  parties  and  where  the 
negotiations  are  carried  on  by  messenger  or  car- 
rier, but  it  is  to  be  observed  that  the  law,  in  order 
to  make  it  possible  to  conclude  a  contract  by  post, 
for  instance,  holds  that  the  acceptance  is  completed 
and  the  contract  raised,  the  instant  it  is  deposited 
with  the  carrier,^  whether  or  not  the  acceptance  is 

2  Stevenson  v.  McLean,  5  Q.  B.  D.  346. 

An  offer  by  telegram  impliedly  requires  a  quick  reply  by  telegram, 
Thompson  v.  Burns,  15  Idaho  572,  99  P.  111. 

3  Oral  message,  Stevenson  v.  McLean,  supra;  public  carrier,  Gottlieb  v. 

Einaldo,  78  Ark.  123,  93  S.  W.  750,  6  L.  K.  A.  (N.  S.)  273. 

Telegram  as  acceptance  of  offer  made  by  letter,  Beggs  v.  James  Hanley 
Brewing  Co.,  27  E.  L  385,  62  Atl.  737,  114  A.  S.  E.  44. 

Letter  by  post  as  acceptance  of  offer  by  telegram.  Farmers'  Produce 
Co.  V.  McAlester  Storage  &  Com.  Co.,  (Okl.)  150  P.  483,  holding  suf- 
ficient when  acceptance  by  wire  not  inferred  from  offer  by  wire. 

4  Wester  v.  Casein  Co.  of  America,  206  N.  Y.  506,  100  N.  E.  488 ;  Ann. 

Cas.  1914B,  377;  W.  U.  T.  Co.  v.  Williams,  57  Tex.  Civ.  App.  267, 
137  S.  W.  148. 

BKempner  v.  Cohn,  47  Ark.  519,  1  S.  W.  869,  58  Am.  Eep.  775;  Moore  v. 
Pierson,  6  Iowa  279,  71  Am.  Dee.  409;  Weaver  v.  Burr,  supra; 
Chiles  V.  Nelson,  7  Dana  281,  (Ky.) ;  Stevenson  v.  McLean,  supra. 


§  819  LAW  OF  OPTION  CONTRACTS  326 

actually  received  by  the  proposer®  and  regardless 
of  error^  or  delay^  by  the  telegraph  company,  in 
transmission. 


Sec.  819.  SAME,  CONTINUED.— To  be  effec- 
tive the  letter  must  actually  be  placed  in  the  post 
office,  directed  to  the  party  making  the  offer  and 
at  the  proper  place  ;^  and  postage  thereon  prepaid,^ 
for  if  directed  to  a  place  where  the  optionor  only 
sometimes  resides,  it  is  not  within  the  rule  and,  in 
such  case,  proof  of  actual  receipt  of  the  communi- 
cation must  be  made  as  in  other  cases. ^  An  offer 
by  mail  may  provide  that  the  contract  shall  be 
binding  when  the  acceptance  is  received,^  and  in 

5  Unless  a  formal  writing  embodying  all  the  terms  of  the  contract  is  a 

condition  precedent  to  its  existence,  Mercer  Elec.  Mfg.  Co.  v.  Con- 
necticut Elec.  Mfg.  Co.,  87  Conn.  691,  89  Atl.  909;  or  the  offer 
reserves  the  right  to  withdraw  by  posted  letter,  Byrne  v.  Van  Tien- 
hoven,  L.  E.  5  C.  P.  Div.  344,  49  L.  J.  C.  P.  316,  42  L.  T.  (N.  S.)  371. 

Case  where  acceptance  by  wire  was  to  be  followed  by  letter,  Long  v. 

Needham,  37  Mont.  408,  96  P.  731. 
As  a  result  of  the  rule  of  the  text  the  optionee  may  not  retract  her 

acceptance  after  she  has  posted  her  letter  of  acceptance,  Linn  v. 

McLean,  80  Ala.  360. 

6  Weaver  v.  Burr,  supra;  Eogers  v.  Burr,  105  Ga.  432,  31  S.  E.  438,  70 

A.  S.  R.  50;  Mercer  Elec.  Mfg.  Co.  v.  Connecticut  Elec.  Mfg.  Co., 
supra;  W.  U.  T.  Co.  v.  Williams,  57  Tex.  Civ.  App.  267,  137  S.  W. 
148,  telegram;  Washburn  v.  Fletcher,  42  Wis.  152. 

7  Watson  V.  Paschall,  93  S.  C.  537,  77  S.  E.  291. 

8  Postal  Telegraph  Cable  Co.  v.  Louisville  C.  S.  Oil  Co.,  140  Ky.  506,  131 

S.  W.  277,  or  lost. 

1  Weaver  v.  Burr,  31  W.  Va.  736,  8  S.  E.  743,  3  L.  E.  A.  94;  Potts  v. 

Whitehead,  20  N.  J.  Eq.  55,  affirmed  23  N.  J.  Eq.  512. 

2  Britton  v.  Phillips,  24  How.  Pr.  (N.  Y.)  Ill, 

3  Potts  V.  Whitehead,  supra. 

4  Mercer  Elec.  Mfg.  Co.  v.  Connecticut  Elec.  Mfg.  Co.,  87  Conn.  691,  89 

Atl.  909. 


327  ELECTION — PLACE   OP  §  820 

such  case  the  rule  under  consideration  does  not 
apply. 

An  acceptance  or  election  by  post  or  telegraph  is 
good  in  all  cases,  that  is,  where  the  offer  is  made 
by  post  or  telegraph  as  well  also  as  where  a  written 
proposal  or  oral  offer,  expressing  or  implying  a 
future  time  to  accept,  is  made  personally.  But  in 
the  latter  cases  the  notice  becomes  effective  as  an 
acceptance,  not  from  the  instant  of  its  deposit  in 
the  post  office,  or  its  acceptance  for  transmission 
by  the  telegraph  company,  but  only  upon  its  actual 
receipt  by  the  proposer  or  optionor.  The  conse- 
quence is  that  if,  in  such  cases,  the  letter  is  received 
after  the  expiration  of  the  time  limit,  it  is  too  late, 
notwithstanding  it  was  posted  prior  to  the  expira- 
tion of  the  option  time.^ 

Sec.  820.  PLACE  OF  ELECTION  OR  ACCEP- 
TANCE.— If  the  option  designates  the  place  of 
election  or  acceptance,  the  election  or  acceptance 
must  be  made  at  that  place.   Thus,  an  offer  to  buy 

5  Kibler  v.  Caplis,  140  Mich.  28,  103  N.  W.  531,  112  A.  S.  E.  388,  telegram. 

Where  the  optionor  and  optionee  reside  in  different  states  and  the 
offer  is  in  writing  personally  delivered,  it  would  seem  there  is  an 
implied  right  of  acceptance  by  letter,  and  if  actually  received  in 
time,  it  is  sufficient,  Wilcox  v.  Cline,  70  Mich.  517,  38  N.  W.  555. 

Where  optionor  evades,  Holmes  v.  Myles,  141  Ala.  401,  37  So.  588. 

Where  the  optionee  properly  mailed  notice,  it  is  presumed  that  the 
optionor  received  it,  but  the  presumption  may  be  rebutted,  Blu- 
thenthal  v.  Atkinson,  93  Ark.  252,  124  S.  W.  510. 

Where  a  telegram  is  delivered  to  the  telegraph  company  and  accepted 
by  the  operator  for  transmission,  there  is  a  presumption  that  it  has 
been  duly  forwarded  and  received  by  the  addressee,  Kibler  v.  Caplis, 
supra. 

The  telegram  must  be  paid  for  and  delivered  to  the  telegraph  com- 
pany, Price  V.  Atkinson,  117  Mo.  App.  52,  94  S.  W.  816. 


§  820  LAW  OP  OPTION  CONTRACTS  32 S 

flour  stated  tliat  the  answer  should  be  returned  by 
the  same  wagon  by  which  the  offer  was  sent.  The 
acceptance  was  not  sent  by  the  return  wagon  but 
was  mailed  at  a  place  which  was  not  the  destination 
of  the  wagon  and  was  duly  received.  It  was  held 
the  acceptance  was  not  sufficient  because  it  was  not 
sent  to  the  place  specified  in  the  offer/ 

If  the  place  of  acceptance  or  election  is  not 
expressly  fixed  by  the  terms  of  the  proposal  or 
option  and  the  optionor  can  not  be  found,  or  evades, 
it  is  believed  the  optionee  has  fully  and  duly  per- 
formed by  giving  seasonable  notice  at  the  residence 
or  usual  place  of  business  of  the  optionor.^  And 
further,  that  a  communication  to  him  personally 
anywhere  he  is  found  is  good.  And  the  same  is  true 
of  an  option  which  expressly  fixes  the  place,  where, 
at  the  time,  the  optionor  does  not  object  to  the 
acceptance  or  election  upon  that  ground. 

Notice  at  the  appointed  place  and  to  the  person 
named  in  the  option  to  receive  it,  is  good,  notwith- 
standing the  previous  death  of  the  optionor,^  or  the 

1  Eliason  v.  Henshaw,  4  Wheat.   (U.  S.)    228;   Vermont  Marble  Co.  v. 

Mead,  (Vt.)  80  Atl.  852. 

2  Cusack  V.  Gunning  System,  109  Bl.  App.  588;  Canty  v.  Brown,  11  Cal. 

App.  487,  105  P.  428;  Herman  v.  Winter,  20  S.  D.  196,  105  N.  W. 
457;  Boynton  v.  Woodbury,  101  Mass.  346. 
When  the  optionor  evades,  etc.,  see  Sec.  933. 

Under  an  agreement  to  repurchase,  at  the  option  of  the  buyer,  election 
and  tender  of  deed  of  re-conveyance  must  be  made  by  the  buyer  at 
the  residence  of  the  seller  where  the  land  is  situated  and  where  the 
contract  is  to  be  performed,  Curtis  v.  Sexton,  142  Mo.  App.  179, 
125  S.  W.  806. 

8  Mueller  v.  Nortmann,  116  Wis.  468,  93  N,  W,  538,  96  A.  S.  R.  997 ;  see 
Levin  v.  Dietz,  194  N.  Y.  376,  87  N,  E.  454,  20  L.  E.  (N.  S.)  251. 


329  ELECTION — MUST   BE   DEFINITE  §  821 

absence  of  the  optionor/  When  the  optionor  gave 
the  optionee  his  address  telling  him  to  communicate 
any  matters  relative  to  the  premises,  notice  of 
election  mailed  to  the  address  given,  on  the  day  the 
time  to  give  notice  expired,  is  good  though  not 
received  until  a  day  or  two  later. ^ 

Sec.  821.  ELECTION  MUST  BE  DEFINITE. 
—The   subject  matter   of  this   section  does  not 
involve  the  rule  applicable  to  conditional  elections 
or  acceptances.    Apart  from  the  requirements  of 
the  latter  rule,"  the  election  or  acceptance  must  be 
definite  and  certain.    Thus,  an  acceptance  of  an 
offer  to  receive  and  transport,  "not  exceeding  6000 
tons  gross"  in  general  terms,  without  specifying 
the  amount,  is  not  sufficient  as  the  niunber  of  tons 
should  be  specified.'    So,  an  election  to  continue 
water  service  from  month  to  month  for  three  years, 
reserving  the  right  to  continue  the  service  there- 
after, is  too  indefinite,   under   an  agreement  to 
supply  water  for  three  years  or  longer  at  the  option 
of  the  parties,"  but  notice  of  election  by  letter  to 
the  optionor  that  the  optionee  was  ready  to  have 
the  whole  amoimt  of  coal  delivered,  under  an  option 
to  purchase  2000  tons  of  coal  to  be  shipped  from 
Port  Richmond,  is  sufficient  though  no  direction  is 
given  when  to  ship.^ 

4  Omer  v.  Farlow,  46  HI.  App.  122. 

5Eeed  V.  John,  2  Daly  (N.  Y.)  213;  see  also  Holmes  v.  Myles,  141  Ala. 
401,  37  So.  588. 

1  See  See.  840,  et  seq. 

2  CMeago  etc,  R.  R.  Co.  v.  Dane,  43  N.  Y.  240. 

8  Christian  etc.  Co.  v.  Bienville  etc.  Co.,  106  Ala.  12^  17  So.  352. 
4  Snelling  v.  Hall,  107  Mass.  134. 


§  822  LAW  OF  OPTION   CONTRACTS  330 

Sec.  822.  ELECTION  AS  TO  PART  OF 
PROPERTY. — In  the  absence  of  a  }3rovision  in 
the  option  contract  authorizing  an  election  to  pur- 
chase part  of  the  property  covered  by  the  option, 
the  optionee  is  not  entitled  to  elect  to  purchase  less 
than  the  whole,  which  is  another  way  of  saying  that 
the  election,  b}'  the  optionee,  must  conform  with 
the  terms  of  the  option.^  An  option  on  5  lots  at 
the  price  of  $500  each,  in  consideration  of  the  per- 
fection of  the  title  by  the  optionee,  does  not  give 
the  optionee  the  right  to  purchase  any  one  of  the 
lots  unless  he  perfects  the  title  to  all.^  However, 
the  option  ma}^  be  so  drawn  as  to  permit  election 
of  a  part  of  the  property.^  Thus,  under  an  option 
to  purchase  certain  property,  including  accounts 
receivable,  at  a  certain  percentage  of  their  face 
value,  and  a  special  agreement  providing  for  an 
inventory  of  the  accounts  to  be  made  by  the  seller, 
the  buyer  can  elect  to  purchase  the  other  property 
without  announcing  his  election  to  take  the 
accounts,  until  the  inventory  has  been  completed 
and  submitted  to  him."* 

1  Hitchcock  V.  Page,  14  Cal.  440 ;  Reynolds  v.  Hooker,  76  Vt.  184,  56  Atl. 
988,  option  on  real  and  personal  property;  Rehm-Zeiher  Co.  v.  F.  G. 
Walker  Co.,  156  Kj.  6,  160  S.  W.  777;  Mershon  v.  Williams,  62 
N.  J.  L.  779,  42  Atl.  778,  election  to  renew  for  one  year  of  a  term 
of  four  years;  Vickers  v.  City  of  Baltimore,  102  Md.  487,  63  Atl.  120, 
and  specific  performance  will  not  be  granted. 

2Dupuy  V.  Williams,  152  111.  102,  37  N.  E.  48;  Brooks  v.  Miller,  103  Ga. 
712,  30  S.  E.  630,  case  where  option  covered  an  undivided  interest  in 
lots  and  optionee  undertook  to  have  partition  made. 

3Watkins  v.  Youll,  70  Neb.  81,  96  N.  W.  1042;  Worch  v.  Woodruff,  61 
N.  J.  Eq.  78,  47  Atl.  725. 

4  Baker  v.  Shaw,  68  Wash.  99,  122  P.  611. 

Option  to  purchase  any  number  of  acres  of  parcel  described,  Madden 
V.  City  of  Boston,  177  Mass.  350,  58  N.  E.  1024. 


331  ELECTION — PARTICULAR  ACT  AS  §  823 

In  another  case^  the  option  was  construed  to 
allow  the  optionee  to  elect  to  purchase  a  part  of 
the  several  tracts  of  land  described,  and  it  was  held 
that  such  election  made  the  option  a  binding  con- 
tract for  all  the  tracts.  And  the  same  conclusion 
was  reached  in  another  case^  where  payment  was 
made  of  the  first  installment  for  stock  to  be  deliv- 
ered and  paid  for  in  parcels  or  blocks. 

Sec.  823.  PARTICULAR  ACT  AS  ELECTION 
OR  ACCEPTANCE.  GENERALLY.— The  com- 
munication of  the  fact  that  the  optionee  exercises 
his  option  right  is  not  required  to  be  in  any  par- 
ticular form  unless  by  virtue  of  the  provisions  of 
the  option  contract.  With  the  qualification  just 
made,  it  may  be  laid  down  as  a  rule  that  any  act 
signified  to  the  optionor  which  brings  to  his  mind 
the  present  intention  of  the  optionee  to  exercise  the 
option  privilege,  is  sufficient.^  Thus,  where  a 
license  for  the  exclusive  use  of  a  process  allows  the 
licensee,  within  one  year,  to  elect  either  to  abandon 
or  continue  it,  and  he  sues,  within  the  year,  to 
restrain  a  violation  of  it  by  the  licensor,  such  act 
constitutes  a  final  election  to  continue  the  license.^ 

5  Fink  V.  Hough,  (Tex.  Civ.  App.)  153  S.  W.  676;  Baker  v.  Shaw,  supra. 

6  Obery  v.  Lander,  179  Mass.  125,  60  N.  E.  378 ;  see  also  Reed  v.  Hiekey, 

13  Cal.  App.  136,  109  P.  38. 

1  Parker  v.  Seeley,  56  N.  J.  Eq.  110,  38  Atl.  280,  devisee  and  optionee 
under  will;  case  where,  when  time  to  exercise  option  arrived  optionee 
was  on  his  death  bed  and  subsequently  died.  During  such  time  he 
was  not  able  to  attend  to  any  business,  but  it  appeared  he  had  made 
up  his  mind  to  elect  and  the  trustee  under  the  will  knew  that  fact 
and  this  was  held  good  without  a  formal  declaration  of  an  intention 
to  elect. 

2  Buhl  V.  Stephens,  84  Fed.  922. 


§  824  LAW  OF  OPTION  CONTRACTS  332 

So,  a  tender  to  the  optionor  of  the  cash  payment 
and  of  the  note  and  mortgage  called  for  by  the 
option,  is  sufficient  notice  of  the  exercise  of  the 
option;^  as  also  tendering  and  offering  for  execu- 
tion a  deed  within  the  time  limit;''  marking  the 
trees  optioned  and  offering  to  pay  the  price;** 
demanding  payment  of  note;^  and  making  pay- 
ments under  the  terms  of  the  option/ 

On  the  other  hand,  it  is  held  that  the  following 
acts  do  not  constitute  an  election:  commencing  to 
make  repairs  on  the  leased  property  by  the  lessor 
without  the  consent  of  the  lessee  under  a  lease 
providing  that  if  the  lessor  should  begin  certain 
repairs  the  lessee  should  be  bound  to  purchase;^ 
advertising  by  the  optionee  to  sell  the  property  at 
auction;^  gift  of  piano  under  lease  and  option  to 
purchase/ ° 

Sec.  824.  PARTICULAR  ACT  AS  ELECTION 
OR  ACCEPTANCE.  STATEMENTS  AND 
CONVERSATIONS.— The  election  must  be 
unequivocal.    Thus,  where  at  the  request  of  the 

3  Souffrain  v.  McDonald,  27  Ind.  269. 
.  4  Scott  V.  Shiner,  27  N.  J.  Eq.  185. 

5  Paddock  v.  Davenport,  107  N.  C.  710,  12  S.  E.  464. 

6  Favorite  Carriage  Co.  v.  Walsh,  71  Minn.  292,  74  N.  W.  137. 

7  Obery  v.  Lander,  179  Mass.  125,  60  N.  E.  378 ;  Smith  v.  Post,  167  Gal. 

69,  138  P.  705 ;  Eeed  v.  Hickey,  13  Cal.  App.  136,  109  P.  38. 
Acceptance    of    report    of    engineer,    Knisely    v.    Leathe,    (Mo.)     178 

S.  W.  453. 
Taking  possession  and  removing  property.  Lord  v.  Miller,  (Wash.)  150 

P.  631. 

8  Smith  v.  Fisher,  33  N,  Y.  S.  1059,  87  Hun.  129. 

9  Thacher  v.  Weston,  197  Mass.  143,  83  N.  E.  360. 
10  Powell  V.  Eckler,  96  Mich.  538,  56  N.  W.  1, 


333  ELECTION — ^PARTICULAE  ACT  AS  §  824 

optionor,  the  optionee  is  asked  what  his  intentions 
are  with  reference  to  exercising  the  option,  and  in 
the  presence  of  the  optionor,  he  replies  *'I  have 
been  a  good  fellow  so  far  and  I  guess  I  will  have 
to  take  the  land,"  such  statement  does  not  consti- 
tute a  sufficient  election,  as  it  amounts  merely  to 
an  expression  of  opinion  as  to  what  the  optionee 
intends  to  do  in  the  future/  Nor,  is  there  an  elec- 
tion where  the  optionee  merely  demands  to  be 
informed  as  to  the  cost  of  the  property;^  or 
requests  an  extension  of  the  option  time  so  that  an 
estimator  can  be  sent  to  inspect  timber  f  or  makes 
complaint  with  respect  to  the  merchandise  ;'*  or 
states  that  possession  would  be  taken  on  a  date 
different  from  that  stipulated  in  the  option.^ 

But  a  statement  by  the  optionee  that  he  wishes 
to  avail  himself  of  his  right  to  purchase  under  the 
option  and  is  ready  to  pay  the  agreed  price,  is 
sufficient.^  So,  where  the  optionee  advises  the 
optionor  that  the  manufacturing  company  for 
which  the  property  was  optioned  has  decided  to 
locate  its  plant  and  that  the  optionee  desires  to 
exercise  the  option  and  is  ready  to  pay  the  price/ 
So,  where  under  an  agreement  by  seller  to  repur- 
chase, if  the  purchaser  was  dissatisfied,  a  statement 

1  Breen  v.  Mayne,  141  Iowa  399,  118  N.  W.  441. 

2  stokes  V.  Carpenter,  151  N.  Y.  S.  1000,  166  App.  Div.  441, 

3  Seymour  v.  Canfield,  122  Mich.  212,  80  N.  W.  1096;  see  Beckwith  v. 

Cheever,  21  N.  H.  (1  Fost.)  41. 

4  Ide  V.  Brody,  156  HI.  App.  479,  sale  and  return. 

5Routledge  v.   Grant,   4  Bing.   653,    13   E.   C.   L.   678,   130   Eng.   He- 
print  920. 

6  Pearson  v.  Millard,  150  N,  C.  303,  63  S.  E.  1053. 

7  Boyden  v.  HHl,  198  Mass.  477,  85  N.  E.  413. 


§  825  LAW  OF  OPTION  CONTRACTS  334 

by  the  purchaser  to  the  seller  that  he  desires  a 
reconveyance,  that  he  is  of  the  same  opinion  as 
when  ''the  transaction  was  had/'  and  to  "get  your 
money  ready.  "^  So,  where  the  optionee  demands 
payment  of  the  notes  of  the  optionor  called  for  by 
the  agreement,^  or  informs  the  lessor-optionor  that 
he  desires  the  premises  for  the  additional  term/" 

Sec.  825.  PARTICULAR  ACT  AS  ELECTION 
OR  ACCEPTANCE.  LETTERS  AND  OTHER 
WRITINGS. — A  letter  written  by  the  optionee 
stating  he  is  ready  to  ''close  the  option"  at  a  time 
subsequent  to  the  expiration  of  the  option  time 
limit,  is  not  an  election.^ 

A  mere  notice  by  the  lessee  under  a  lease  giving 
him  the  right  to  make  "arrangements"  with  the 
lessor  for  renewal  for  another  term,  that  at  the 
proper  time,  he  intends  to  assert  his  rights  under 
the  renewal  clause  for  another  term,  without  fur- 
ther making  any  ' '  arrangements, ' '  is  not  a  renewal 
of  the  lease.^ 

Where  the  lessee,  under  a  lease  of  a  theatre  which 
gave  him  the  right  to  lease  the  premises  for  a  fur- 
ther term,  wrote  the  lessor  that  he  would  continue 
the  theatre,  and  the  lessor  replied  he  understood 
this  to  mean  that  the  lessee  would  continue  to  rent 
the  theatre  "as  per  terms  of  contract,"  and  the 

s  Burner  v.  Burner,  155  Va.  484,  79  S.  E.  1050. 
9  Favorite  Carriage  Co.  v.  Walsh,  71  Minn.  292,  44  N.  W.  137. 
10  House  V.  Burr,  24  Barb.  (N.  Y.)  525. 

1  Indiana  &  Ark.  L.  &  Mfg.  Co.  v.  Pharr,  82  Ark.  573,  102  S.  W.  686. 
a  Christiana  Feigenspan  v.  Popowska,  75  N.  J.  Eq.  342,  72  Atl.   1003. 


335  ELECTION — PARTICULAR  ACT  AS  §  825 

lessee  continued  in  the  possession  and  use  of  the 
theatre,  there  was  a  sufficient  exercise  of  the  right 
of  renewal.* 

Where,  by  a  clause  added  to  an  option,  which 
clause  was  signed  by  the  optionee,  he  agreed  "to 
the  above  terms  and  to  pay  the  balance  within  seven 
days  (the  stipulated  time)  there  is  an  acceptance/ 
So,  where  the  parties  sign  and  deliver  the  agree- 
ment;^ or  the  optionee  endorses  his  acceptance  on 
the  option,  the  optionor  also  endorsing  thereon 
acceptance  of  notice  and  stating  the  contract  is 
made  absolute,  notwithstanding  the  option  required 
the  signature  of  the  optionor 's  wife  who  refused  to 
sign.^ 

Defendant  gave  plaintiff  a  written  option  to  pur- 
chase stock  for  $3100  cash  and  the  balance  on  time. 
On  the  last  day  of  the  option,  plaintiff  said  he 
would  take  the  stock  ''according  to  the  terms  of 
the  writing,"  but  defendant,  desiring  to  get  a  por- 
tion of  the  stock  from  the  pledgee,  endorsed  an 
extension  of  eleven  days  on  the  agreement.  After 
such  extension,  plaintiff  let  defendant  have  $3100 
to  get  the  pledged  stock,  but  defendant  failed  to  do 
so,  and  after  the  expiration  of  the  option,  defen- 
dant demanded  a  return  of  the  $3100,  and  it  was 
held  there  was  no  "acceptance"  of  the  option.'^ 

3  Parker  v.  Gortatowsky,  127  Ga.  560,  56  S.  E.  846. 

4  Goldberg  v.  Drake,  145  Alich.  50,  108  N.  W.  367;  the  clause  followed  the 

signature  of  the  optionor  and  was  not  signed  by  the  optionee  in  the 
presence  of  the  optionor. 

5  Cummings  v.  Nielson,  42  Utah  157,  129  P.  619. 

6  Thompson  v.  Craft,  238  Pa.  125,  85  Atl.  1107. 

7  Buttner  v.  Smith,  (Cal.)  36  P.  652. 


§§  826, 827  LAW  OF  option  contracts  336 

Sec.  826.  PARTICULAR  ACT  AS  ELECTION 
OR  ACCEPTANCE.  ORDINANCES  BY 
MUNICIPALITIES,  ETC.— An  election  by  a  city 
to  exercise  the  option  to  purchase  a  waterworks 
plant,  at  the  expiration  of  the  franchise,  can  not  be 
inferred  from  the  adoption  of  an  ordinance  by  it 
providing  for  an  appraisement  and  the  fixing  of 
water  rates  and  for  submitting,  to  a  special  elec- 
tion, the  question  whether  the  city  should  purchase, 
and  whether  a  new  franchise  should  be  granted, 
when  nothing  was  done  under  the  appraisement, 
and  the  city  failed  to  fix  the  schedule  of  water 
rates.^  But  the  vote  of  a  town  to  purchase  the 
option  property  is  an  election;^  the  vote  completes 
the  purchase.^  So,  also,  is  the  vote  of  a  board  of 
street  commissioners  to  purchase,  from  the  owner, 
certain  land  for  school  purposes  f  but  it  is  other- 
wise where  the  vote  was  intended  as  preliminary 
to  a  contract  of  purchase.® 

Sec.  827.  PARTICULAR  ACT  AS  ELECTION 
OR  ACCEPTANCE.  POSSESSION  AND 
IMPROVEMENTS.— The  rule  on  this  subject  is 

1  City  and  County  of  Denver  v.  New  York  Trust  Co.,  229  U.  S.  123,  57 

L.  Ed.  1101,  33  S.  Ct.  657,  reversing  187  Fed.  890,  11  C.  C.  A.  224; 
the  point  in  this  case  was  that  the  city  having  an  option  on  the 
plant  must  elect  under  the  option. 

2  Town  of  Bristol  v.  Waterworks,  25  E.  I.  189,  55  Atl.  710;   Town  of 

Southington  v.  Water  Company,  80  Conn.  646,  69  Atl.  1023. 

3  Eockport  Water  Co.  v.  Eoekport,  161  Mass.  279,  37  N.  E.  168. 

4  McManus  v.  City  of  Boston,  171  Mass.  152,  50  N.  E.  607. 
6  Madden  v.  City  of  Boston,  177  Mass.  350,  58  N.  E.  1024. 


337  ELECTION — PAETICULAR  ACT  AS  §  827 

laid  down  in  an  Illinois  case.^  In  that  case  the 
owner  gave  to  another  an  option  to  select  and 
purchase  a  portion  of  his  lands,  at  a  stipulated 
price,  by  the  terms  of  which  the  optionee  was  to 
make  the  selection  within  a  given  time,  and  pay 
taxes,  and  make  improvements,  and  pay  the  pur- 
chase money,  upon  the  performance  of  which  the 
owner  agreed  to  convey.  The  court  held  the  option 
was  "accepted"  when  the  optionee  had  done  what 
he  was  required  to  do  by  the  terms  of  the  option. 
In  the  cited  case  all  the  acts  to  be  done  were  refer- 
able to  the  option  itself  and  were  done  under  and 
in  pursuance  of  its  terms.  The  case  differs,  there- 
fore, from  one  where  possession  is  taken  under  a 
lease  containing  an  option  on  the  usual  terms.  In 
the  latter  case,  the  possession  of  the  land,  as  well 
as  fencing  the  same  and  paying  taxes,  may  be  refer- 
able to  the  relation  of  landlord  and  tenant,  and  if 
so,  they  do  not  constitute  an  election.-  Taking 
possession,  under  a  bond  for  a  mining  claim,  and 
making  improvements  without  objection  from  the 
obligor,  is  not  the  equivalent  of  an  election  to  pur- 

1  Perkins  v.  Hadsell,  50  HI.  216,  distinguishing  Boucher  v.  Van  Buskirk, 

9  Ky.  (2  A.  K.  Marsh)  345,  on  the  ground  that  the  improvements 
were  not  made,  and  referring  to  Lawrenson  v.  Butler,  1  Sch.  &  Lef. 
13,  as  often  overruled. 
See  Byers  v.  Denver  C.  E.  Co.,  13  Colo.  552,  22  P.  951,  holding  that 
taking  possession  under  the  contract  was  an  election;  Bogle  v. 
Jarvis,  58  Kan.  76,  48  P.  558. 

2  Sutherland  v.  Parkins,  75  111.  338;  see  L'Engle  v.  Overstreet,  61  Fla. 

653,  55  So.  381;  Mills  v.  Haywood,  L.  E.  6  Ch.  Div.  196;  Myers  v. 

J.  J.  Stone  &  Son,  128  Iowa  10,  102  N.  W.  507,  111  A.  S.  E.  180, 

5  Ann.  Gas.  912. 
Richardson  v.  Harkness,  50  Wash.  474,  110  P.  9,  holding  that  possession 

under    lease    with    option    to   purchase    is   possession    under    option 

within  the  rule. 
22 — Option  Contracts. 


§  828  LAW  OF  OPTION  CONTRACTS  338 

chase,  nor  is  it  performance.^  The  fact  that  the 
optionee  made  some  improvements  upon  the  land 
during  the  term  of  the  lease  containing  an  option 
to  purchase,  does  not  entitle  him  to  the  option  which 
he  has  forfeited  by  failure  to  exercise  it  in  time/ 
An  option  gives  the  optionee  no  interest,  either 
legal  or  equitable,  in  the  land,  and  the  fact  that  the 
optionee  takes  possession  and  makes  improvements 
without  having  complied  with  the  option  agree- 
ment, does  not  make  the  contract  a  sale  nor  give 
him  any  interest  in  the  land/^ 

The  act  we  are  here  considering  is  one  sufficient 
to  constitute  an  election  under  the  option.  In  a 
general  way  the  rule  above  laid  down  with  refer- 
ence to  the  possession  of  land,  is  applicable  to 
personal  property.  Thus,  under  an  option  for  the 
purchase  of  personal  property  consisting  of  rail- 
road equipment,  there  is  an  election,  where,  within 
the  option  time,  the  optionee  takes  possession  and 
removes  the  property.^ 

Sec.  828.  PARTICULAR  ACT  AS  ELECTION 
OR  ACCEPTANCE.  SALE  AND  RETURN. 
SALE  ON  TRIAL  OR  APPROVAL.  BAIL- 
MENT.    GENERALLY.— In   another   place   we 

3  Gordon  v.  Darnell,  5  Colo.  302. 

Champion  etc.  Co.  v.  Champion  Mines,  164  Cal.  205,  128  P.  315,  there 
was  non-payment  of  installments  of  price ;  see  Ellsworth  v.  So. 
Minn.  R.  Ex.  Co.,  31  Minn.  543,  18  N.  W.  822 ;  Reed  v.  Hickey,  13 
Cal.  App.  136,  109  P.  38;  Curran  v.  Rogers,  35  Mich.  221;  nor  is 
possession  and  trimming  of  trees,  Wright  v.  Kaynor,  150  Mich.  7, 
113  N.  W.  779. 

4  Atlantic  Product  Co.  v.  Dunn,  142  N.  C.  471,  55  S.  E.  299;  see  Boyd 

V.  Brinckin,  55  Cal.  427. 

8  Bostwick  V.  Hess,  80  111.  138. 

6  Lord  V.  Miller,  (Wash.)   150  P.  631. 


339  ELECTION — PARTICULAR  ACT  AS  §  828 

have  pointed  out  the  distinction  between  sale  and 
return,  on  the  one  hand,  and  sale  on  trial  or 
approval,  or  bailment  with  option  to  purchase,  on 
the  other, ^  and  noted  that  under  the  former,  as  a 
general  rule,  the  title  to  the  property  vests  in  the 
purchaser  immediately,  while  under  the  latter,  the 
title  does  not  vest  until  the  purchaser  approves  the 
fitness  and  quality  of  the  property,  that  is,  exer- 
cises the  option  privilege  to  purchase.^ 

In  transactions  involving  a  common  option  to 
purchase,  and  some  others,  the  failure  of  the 
optionee  to  exercise  the  option  privilege  within  the 
time  limit,  puts  an  end  to  his  rights  under  the 
option.  In  the  cases  under  consideration  in  this 
and  the  following  sections,  failure  on  the  part  of 
the  purchaser,  depending  of  course  on  the  terms  of 
the  contract  and  the  facts,  usually,  and  where  there 
has  been  some  act  on  the  part  of  the  purchaser, 
such  as  exercising  acts  of  ownership  over  the  prop- 
erty after  expiration  of  the  time  limit,  quite 
uniformly  results,  as  held  by  the  courts,  in  an 
election  to  purchase,  that  is,  completes  the  transac- 
tion as  an  absolute  sale  and  purchase.^ 

1  See  Sec.  507. 

2  See  Sec.   507;    see  also  Rumpf  v.  Barto,   10   Wash.   382,   38   P.    1129, 

bailment  of  jewelry  for  ' '  inspection. ' ' 

3  Where  written  notice  of  dissatisfaction  is  required  by  the  contract,  such 

notice  may  be  waived  by  the  seller,  Continental  Gin  Co.  v.  Sullivan, 
(Okl.)  150  P.  209. 
A  sale  with  option  to  return,  in  a  certain  contingency,  becomes  abso- 
lute, if  the  purchaser,  in  the  meantime  disables  himself  (mortgages 
the  property)  from  performing  the  condition,  Lynch  v.  Willford,  57 
Minn.  377,  59  N.  W.  311. 


§  829  LAW  OF  OPTION  CONTRACTS  340 

Sec.  829.  PARTICULAR  ACT  AS  ELECTION 
OR  ACCEPTANCE.  AGREEMENTS  TO  RE- 
PURCHASE. AGREEMENTS  AND  OPTIONS 
INVOLVING  SHARES  OF  STOCK  AND 
BONDS. — Under  an  agreement  to  repurchase 
there  is  no  absolute  contract  on  the  part  of  the 
seller  to  repurchase ;  the  purchaser  merely  has  an 
option  which  is  lost  if  not  exercised  within  the  time 
limit  and  in  accordance  with  the  terms  of  the  con- 
tract.^ 

In  accordance  with  the  general  rule,  the  follow- 
ing acts  involving  options  to  return,  are  held  to 
constitute  an  election  to  retain  the  property:  fail- 
ure of  the  purchaser  to  return  the  shares  of  stock 
within  the  fixed  time,  under  an  agreement  to  return 
the  shares  or  pay  for  them;^  and  collecting  divi- 
dends on  the  stock  after  the  expiration  of  the  time 
limit.^ 

Notice  of  intention  to  return  the  shares  of  stock, 
given  within  the  stipulated  time,  is  not  sufficient, 
as  tender  of  the  shares,  within  the  time,  is  also 
necessary  ;*  but  a  letter  from  the  purchaser  stating 

1  Magoffin  V.  Holt,  62  Ky.   (1  Duv.)   96;   Scott  v.  Goodin,  21  Cal.  App. 

178,  131  P.  76. 

2  Guss  V.  Nelson,  200  U.  S.  298,  50  L.  Ed.  489,  26  S.  Ct.  260;  Haskins  v. 

Dern,  19  Utah  89,  56  P.  953 ;  Bovee  v.  Boyle,  25  Colo.  App.  165,  136 
P.  467,  pleading;  Page  v.  Shainwald,  169  N.  Y.  246,  62  N.  E.  356. 

The  provision  in  the  agreement  to  pay  for  the  shares  adds  nothing  to 
the  point;  this  could  be  discharged  by  timely  election  and  return, 
Stevens  v.  Hertzler,  109  Ala.  423,  19  So.  838. 

Eequest  for  extension  of  time  is  not  waiver  of  tender  of  stock,  Alex- 
ander v.  Bosworth,  (Cal.  App.)  147  P.  607. 

3  Laughlin  v.  U.  S.  Eolling  Stock  Co.,  64  Fed.  25. 

4  01sen  V.  Northern  S.  S.  Co.,  70  Wash.  493,  127  P.  112;   eee  Orvis  v. 

Waite,  58  111.  App.  504;  Malsby  v.  Young,  104  Ga.  205,  30  S.  E.  854; 
Alexander  v.  Bosworth,  (Cal.  App.)  147  P.  607. 


341  ELECTION — PAKTICULAR  ACT  AS  §  830 

that  the  purchaser  is  dissatisfied  and  asking  for  his 
money  back  and  to  come  and  take  the  stock,  is  not 
only  an  election  to  return  but  also  a  tender  of  the 
stock  under  the  Iowa  Statute.^  Tender  and  return 
of  the  bonds  and  demand  of  re-payment,  are  suf- 
ficient as  notice  of  dissatisfaction.® 

Under  an  agreement  between  a  railroad  corpora- 
tion and  a  director,  it  was  agreed  to  pay  him  a 
certain  sum  in  shares  or  bonds  of  the  road,  at  his 
election,  the  amount,  however,  to  be  retained  by  the 
corporation  as  indemnity  against  a  certain  liability 
to  which  the  road  was  subject.  The  corporation 
made  and  delivered  to  the  director  a  certificate  for 
the  number  of  shares  and  endorsed  thereon  an 
agreement  to  exchange  them  for  bonds  at  the  elec- 
tion of  the  director  and  this  certificate  was  then 
returned  to  the  railroad  as  indemnity,  and  it  was 
held  there  was  an  election  to  take  the  bonds  not- 
withstanding the  railroad  had  entered  the  shares 
on  its  records  as  property  of  the  director.'' 

Sec.  830.  PARTICULAR  ACT  AS  ELECTION 
OR  ACCEPTANCE.  SALE  ON  TRIAL  OR 
APPROVAL.  BAILMENT.— An  option  to  a 
buyer  to  return  the  goods  bought,  if  he  is  not  satis- 
fied, where  no  time  to  return  is  fixed,  gives  him  a 
reasonable  time,  and  the  retention  of  the  goods 
after  a  lapse  of  a  reasonable  time,  must  be  regarded 

5  Hamilton  v.  Finnegan,  117  Iowa  623,  91  N.  W.  1039. 

6  Rose  V.  Monarch,  150  Ky.  129,  150  S.  W.  56. 

7  Jones  V.  Portsworth  &  C.  R.  R.  Co.,  32  N.  H.  544 ;  see  also  Litchfield 

V.  Irvin,  51  N.  Y.  51. 


§  830  LAW   OF    OPTION    CONTRACTS  342 

as  an  acceptance  of  them/  Return  of  the  property 
and  notice  must  be  within  the  time,  and  in  accor- 
dance with  the  terms  of  the  agreement,  otherwise 
the  option  privilege  of  returning  is  lost.^ 

The  following  acts  are  held  to  amount  to  an 
acceptance:  keeping  the  property  or  expressing 
satisfaction  therewith;  using  a  drilling  machine 
after  the  expiration  of  the  time  limit  for  tests,  not- 
withstanding the  purchaser  did  not  give  the  note 
and  chattel  mortgage  as  required;^  retention  and 
sale  of  goods  on  ''trial  order"  after  expiration  of 
the  time  limit;''  use  of  pump  patterns,  etc.,  after 
expiration  of  contract  and  demand  for  pajonent  of 
royalty  on  their  appraised  value  ;^  use  of  water 
filter  under  agreement  to  return  if  it  proved  unsat- 
isfactory;*^ refusal  to  permit  the  goods  to  be 
removed  or  pay  the  price  ;^  loaning  the  corn  harves- 
ter to  another  person.^  A  mere  notice  that  the 
machine  is  held  subject  to  the  order  of  the  seller  is 
not  sufficient  as  an  election  to  return.® 

1  Ide  V.  Brody,  156  111.  App.  479. 

2  Allyn  v.  Burns,  37  Ind.  App.  223,  7(5  N.  E.  636,  the  rule  of  reasonable 

time  not  applying  when  the   time  is   specified;    Watts   v.   National 
Cash  Eeg.  Co.,  25  Ky.  L.  Eep.  1347,  78  S.  W.  118. 

3  Star  D.   M.  Co.  v.  McLeod,  122  Ky.  564,   92   S.  W.  558,  29   Ky.  L. 

Eep.  84;  also  Von  Dohren  v.  John 'Deere  Plow  Co.,  71  Neb.  276,  98 
N.  W.  830. 

4  O'Donnell  v.  Wing  &  Son,  121  Ga.  717,  49  S.  E.  720. 

5  Hooker  Steam  Pump  Co.  v.  Buss,  240  Mo.  465,  144  S.  W.  419. 

6  International  Filter  Co.  v.  Cox  Bottling  Co.,  89  Kan.  645,  132  P.  180. 

7  Frey-Sheckler  Co.  v.  Iowa  Brick  Co.,  104  Iowa  494,  73  N.  W.  1051. 

8  Hansen  v.  Beebe,  111  Iowa  534,  82  N.  W.  942. 

9  Dickey  v.  Winston  C.  M.  Co.,  117  Ga.   131,  43  S.  E.  493;   Malsby  v. 

Young,  104  Ga.  205,  30  S.  E.  854. 
As  to  contract  of  agency  to  sell,  see  Owensboro  Wagon  Co.  v.  H.  L. 
Riggins  &  Co.,  151  N.  C.  303,  66  S.  E.  126. 


343  ELECTION — PARTICULAR  ACT  AS  §  830 

In  Massachusetts  it  is  held  that  failure  to  return 
the  bailed  property  within  the  stipulated  time,  is 
not  an  acceptance  of  the  property,  but  merely 
evidence  of  that  fact  and  that,  consequently,  where 
a  horse  was  delivered  to  the  bailee  to  be  "tried" 
under  an  agreement  to  return  the  horse  if  the 
bailee  ''did  not  like  it,"  and  the  horse  escaped  and 
was  injured  on  the  way  to  the  house  of  the  bailee, 
without  his  fault,  and  was,  therefore,  never 
"tried"  by  the  bailee,  the  transaction  was  a  bail- 
ment and  the  failure  to  returvi  the  horse  was  not 
an  election  to  purchase.^**  So,  where  the  bailee 
allows  the  time  for  trial  to  expire  because  of  neces- 
sary repairs  and  changes  to  the  gas  producer  or 
furnace;  in  such  case,  failure  to  return  is  not  an 
election  to  purchase/^ 

It  must  not  be  taken  for  granted  that  the  mere 
failure  on  the  part  of  the  bailee  to  act  will,  in  every 
case,  constitute  an  election  to  purchase.  The  form 
of  the  contract,  or  the  circumstances  concerning 
the  transaction,  may  be  such  as  not  to  make  appli- 
cable the  general  rule.  Thus,  where  pictures  are 
left  with  the  prospective  purchaser  on  approval 
under  an  agreement  by  which  they  might  be 
exchanged  at  any  time  for  their  face  value,  the 
purchaser  was  under  no  obligation  to  return  the 
pictures  at  any  particular  time,  and  unless  the 
option  was  exercised,  no  sale  would  ever  take  place, 
the  transaction  being  a  bailment  with  option  to 
purchase.  ^^ 

10  Hunt  V.  Wyman,  100  Mass.  198;  see  Gottlieb  v.  Rinaldo,  78  Ark.  123, 

93  S.  W.  750,  6  L.  R.  A.  (N.  S.)  273. 

11  Turner  v.  Muskegon  M.  &  F.  Co.,  97  Mich.  166,  56  N.  W.  356. 

12  Steinhauer  v.  Heuson,  54  Colo.  246,  131  P.  255. 


§  831  LAW   OF   OPTION   CONTRACTS  344 

So,  also,  wliere  an  agreement  gave  tlie  prospec- 
tive purchaser  a  specified  time  to  use  it,  and  to 
return  it  at  the  expiration  of  the  time,  if  dissatis- 
fied. The  purchaser  has  the  full  period  for  trial 
and  a  reasonable  time  thereafter  in  which  to  signify 
his  election  to  accept  or  return,  no  time  for  election 
having  been  stipulated.^^ 

Return  delivery  is  completed  upon  delivery  to 
the  carrier  which  brought  the  goods  to  the  prospec- 
tive purchaser,  the  rule  being  that  where  no  mode 
of  transportation  is  agreed  upon,  the  prospective 
purchaser  may  adopt  the  mode  of  transportation 
justified  by  the  usages  of  trade.^* 

Sec.  831.  PARTICULAR  ACT  AS  ELECTION 
OR  ACCEPTANCE.  RENEWAL  OR  EXTEN- 
SION OF  LEASE. — The  common  forms  of  option 
in  leases  are  to  purchase  the  premises,  to  renew  the 
lease  for  an  additional  term,  or  to  extend  the  term 
of  the  original  lease.  The  sufficiency  of  an  election 
to  purchase  the  premises  under  the  first  option  is 
tested  by  the  rules  peculiar  to  that  form  of  option.^ 
We  are  concerned  here  with  the  privilege  of 
renewal  or  extension.    Under  these  covenants  in 

13  Springfield  Engine  Stop  Co.  v.  Sharp,  184  Mass.  266,  68  N.  E.  224. 
And  so  where  it  is  provided  the  purchaser  can  return  the  stock  "after 

six  months"  if  dissatisfied,  New  Haven  Trust  Co.  v.  Gaflfney,  73 
Conn.  480,  47  Atl.  760;  see  also  Jones  v.  Moncrief-Cook  Co.,  25 
Okl.  856,  108  P.  403 ;  Von  Dohren  v.  John  Deere  Plow  Co.,  71  Neb. 
276,  98  N.  W.  830;  Dickey  v.  Winston  C.  M.  Co.,  117  Ga.  131, 
43  S.  E.  493. 

14  Gottlieb  V.  Rinaldo,  78  Ark.  123,  93  S.  W.  750,  6  L.  R.  A.  (N.  S.)  273. 
But  leaving  stock  at  bank  and  notifying  vendor,  is  not  sufficient,  Olsen 

V.  Northern  S.  S.  Co.,  70  Wash.  493,  127  P.  112. 

1  See  cases  in  note  4. 


345  ELECTION — PARTICULAR  ACT  AS  §  831 

leases  the  troublesome  question  is  as  to  what  acts 
on  the  part  of  the  lessee  are  a  substitute,  so  to 
speak,  for  the  formal,  or,  perhaps,  the  written 
notice  expressly  or  impliedly  required  by  the  lease. 
Is  a  mere  holding  over  by  the  lessee,  after  the 
expiration  of  the  lease,  sufficient,  as  an  exercise  of 
the  option  to  renew  or  to  extend? 

The  decisions  are  in  conflict,  but  it  would  appear 
the  conflict,  speaking  generally,  arises  more  in  the 
application  of  the  law  to  particular  facts,  or  in  the 
construction  of  particular  but  varying  clauses  of 
leases,  than  to  any  great  divergence  of  opinion 
among  the  courts  as  to  the  law.^ 

Some  decisions  make  a  distinction  between  the 
privilege  of  renewal  of  the  lease  and  of  the  exten- 
sion of  the  original  term,  holding  that  renewal 
contemplates  a  new  lease  for  the  additional  term, 
whereas,  an  extension  is  a  continuation  of  the  term 
of  the  original  lease  which,  by  virtue  of  the  exten- 
sion, is  continued  in  force.^ 

2Whalen  v.  Manley,  68  W.  Va.  328,  69  S.  E.  843;  Grant  v.  Collins,  157 
Ky.  36,  162  S.  W.  539 ;  Kentucky  L.  Co.  v.  NeweU,  32  Ky.  L.  Eep. 
396,  105  S.  W.  972. 

8  Whalen  v.  Manley,  68  W.  Va.  328,  69  S.  E.  843 ;  Kollock  v.  Kaiser,  98 
Wis.  104,  73  N.  W.  776;  Willoughby  v.  Atkinson  Furnishing  Co.,  93 
Me.  185,  44  Atl.  612;  Grant  v.  Collins,  157  Ky.  36,  162  S.  W.  539; 
Sharap  V.  White,  106  Cal.  220,  39  P.  537;  Howell  v.  City  of  Ham- 
burg, 165  Cal.  172,  131  P.  130. 
In  Andrews  v.  Marshall  Creamery  Co.,  118  Iowa  595,  92  N.  W.  706, 
60  L.  E.  A.  399,  96  A.  S.  R.  412,  it  is  said  that  an  extended  term 
or  additional  term  is  one  provided  for  in  the  lease  itself,  and  the 
mere  enjoyment  of  the  privilege  by  remaining  in  possession  is  enough 
to  bring  the  extended  occupancy  under  the  original  lease;  but  an 
agreement  for  an  option  of  renewal  implies  that  the  parties  contem- 
plate some  affirmative  act  by  way  of  creation  of  an  additional  term; 
that  this  affirmative  act  may  be  something  ditferent  from  and  less 
than  the  execution  of  a  new  lease;  for  when  the  tenant  has  indicated 
affirmatively  the  election  to  avail  himself  of  tlie  privilege  of  renewal, 
he  has  done  all  that  is  necessary  to  make  the  renewal,  for  the  condi- 


§  831  LAW    OF    OPTION   CONTRACTS  346 

The  consequence  of  this  distinction,  theoretically 
at  least,  is  that  under  the  former,  if  the  lessee 
desires  to  renew  and  thus  turn  his  privilege  into 
a  new  lease,  he  must  exercise  his  option  in  con- 
formity with  the  rules  peculiar  to  options  to 
purchase,  and  that,  therefore,  a  mere  holding  over 
after  the  expiration  of  the  lease  is  not  sufficient  as 
the  exercise  of  the  option  privilege.^ 

On  the  other  hand,  since  an  extension  is  a  con- 
tinuation of  the  term  of  the  original  lease,  which 
continues  in  force  by  virtue  of  the  extension,  a 
mere  holding  over,  according  to  some  decisions,^  is 
sufficient  as  the  exercise  of  this  privilege,  and,  con- 
sequently, a  holding  over  by  the  lessee  continues  the 
original   lease   for   the    additional    term.     Other 

tions  under  which  the  new  term  is  to  be  enjoyed  will  be  the  same  as 
those  under  which  the  first  term  is  enjoyed  save  as  to  the  condition 
which  provides  for  a  renewal. 
3  Case  where  formal  execution  of  a  new  lease  was  required  by  the  pro- 
visions of  the  old  one  and  the  "arrangements"  for  which  were  held 
to  fall  upon  the  lessee,  and,  consequently,  a  mere  notice  of  renewal 
was  held  not  sufficient.  Christian  Feigenspan  v.  Popowska,  75  N.  J. 
Eq.  342,  72  Atl.  1003. 

4Renoud  v.  Daskam,  34  Conn.  512;  Thiebaud  v.  First  Nat'l  Bank,  42 
Ind.  212 ;  Bullock  v.  Grinstead,  95  Ky.  261,  24  S.  W.  867. 

Swank  v.  St.  Paul  City  Ey.  Co.,  61  Minn.  423,  63  N.  W.  1088,  holding 
over  under  covenant  of  renewal,  tenant  is  not  liable  until  he  elects 
to  renew,  not  remaining  in  possession. 

Leavitt  v.  Maykell,  203  Mass.  506,  89  N.  E.  1056,  holding  the  word 
'  *  renewal ' '  imports  giving  new  lease  and  saying  that  ' '  it  was  neces- 
sary that  there  should  be  either  the  making  of  a  new  lease  for  the 
additional  term  or  a  formal  extension  of  the  existing  lease,  or 
something  equivalent  thereto,  in  order  to  bind  the  parties  for  a 
period  of  two  years  more. ' ' 

Refusal  to  deliver  up  possession  on  demand  of  lessor  is  election  to  renew, 
Ewing  V.  Miles,  12  Tex.  Civ.  App.  19,  33  S.  W.  235. 

6  Andrews  v.  Marshall  Creamery  Co.,  supra;  see  cases  cited  in  note  1  to 
section  834. 


347  ELECTION — PAKTICULAR  ACT  AS  §  832 

decisions  take  the  view  that  a  mere  holding  over 
after  the  expiration  of  the  lease  is  presumed  to  be 
a  tenancy  from  year  to  year,  or  from  month  to 
month,  or  other  statutory  tenancy,  and  that  unless 
accompanied  by  some  act  referable  to  the  privilege 
of  extension  and  showing  an  intention  on  the  part 
of  the  lessee  to  hold  under  the  extension,  a  holding 
over  is  neither  a  renewal  nor  an  extension.® 

Sec.  832.  PARTICULAR  ACT  AS  ELECTION 
OR  ACCEPTANCE.  RULE  WHERE  LESSEE 
HOLDS  OVER  AND  PAYS  HIGHER  OR 
DIFFERENT  RENTAL.— It  is  said  by  the 
Supreme  Court  of  Minnesota  that  all  of  the  deci- 
sions are  in  accord,  that  where  the  lease  provides 
for  a  higher  rental  for  the  additional  term,  or  for 
a  renewal,  and  there  is  a  holding  over  by  the  lessee 
with  payment  and  acceptance  of  higher  rental, 

6  Andrews  v.  Marshall  Creamery  Co.,  supra;  English  v.  Murtland,  214 
Pa.  325,  63  Atl.  882,  112  A.  S.  R.  747,  6  Ann.  Gas.  339;  Whalen  v. 
Manley,  68  W.  Va.  328,  69  S.  E.  843;  Spangler  v.  Rogers,  123  Iowa 
724,  99  N.  W.  580. 

In  Massachusetts  it  is  held  that  holding  over  is  merely  evidence  of  an 
intention  to  occupy  the  premises  under  the  extension  which  may  be 
overcome  by  evidence  of  a  contrary  intention,  Atlantic  Nat  '1  Bank  v. 
Demmon,  139  Mass.  420,  1  N.  E.  833. 

A  covenant  to  renew  "at  the  will  and  pleasure"  of  the  lessor  at  such 
time  as  the  lessor  shall  determine,  gives  renewal  only  on  terms  and 
for  time  fixed  by  lessor,  Thomas  Hinds  Lodge  v.  Church,  103  Miss. 
130,  60  So.  66. 

The  decisions  under  consideration  in  the  text  are  those  involving  ex- 
press covenants  to  renew  or  to  extend.  As  to  tenancy  arising  under 
leases  having  no  such  express  covenants  and  also  as  to  the  rights 
of  the  parties,  see  Kennedy  v.  City  of  New  York,  196  N.  Y.  19, 
89  N.  E.  360. 


§  832  LAW    OF    OPTION    CONTRACTS  348 

these  acts  establish  an  exercise  of  the  option  and 
a  waiver  of  formal  notice.^ 

A  lease  provided  that  the  lessee  should  have  the 
privilege  of  renewal,  for  a  further  term  of  two 
years,  from  the  expiration  of  the  lease,  at  an 
increased  rental,  provided  three  months'  notice  was 
given.  The  notice  was  given  and  the  increased 
rental  paid,  but  no  new  lease  was  executed.  The 
lessor  brought  sunmiary  proceeding  to  recover  pos- 
session of  the  premises.  It  was  held  there  was  a 
sufficient  election,  and  that  the  lessee  could  set  up 
the  equitable  defense  in  such  proceedings.^ 

A  lease  until  a  specified  time,  at  a  fixed  rental, 
with  a  higher  rental  after  that  time  as  long  as  the 
lessee  ''may  want"  the  premises,  gives  a  right  of 
renewal,  and  the  lessee,  by  continuing  in  possession 
after  the  expiration  of  the  original  term  and  pay- 

1  Kean  v.  Story  &  Clark  Piano  Co.,  121  Minn.  198,  140  N.  W.  1031,  citing 

Kramer  v.  Cook,  7  Gray  (Mass.)  550;  Long  v.  Staiford,  103  N.  Y. 
274,  8  N.  E.  522;  Stone  v.  St.  Louis  Stamping  Co.,  155  Mass.  267, 
29  N.  E.  623.  In  the  New  York  case,  supra,  the  lease  required  a 
written  notice  ' '  for  a  continuance  for  two  years  longer. ' '  The  Court 
held  the  continued  occupancy  of  the  store  and  payment  and  receipt 
of  the  increased  rent  were  an  election  to  take  the  store  for  the  new 
term.  In  the  Stone  case,  supra,  the  facts  were  substantially  the 
same.  The  Court  held  the  provision  for  written  notice  for  the 
extended  term,  being  for  the  benefit  of  the  lessor,  could  be  waived 
by  him.  In  the  Kramer  case  the  Court  said  the  continuation  by  the 
lessees,  in  the  occupancy  of  the  premises  and  paying  the  increased 
rent  stipulated  for  in  case  of  continuance,  were  the  best  evidence  of 
the  election  of  the  lessees  to  avail  themselves  of  the  further  term. 
See  Carhart  v.  White  M.  &  T.  Co.,  122  Tenn.  455,  123  S.  W.  747,  19 
Ann.  Gas.  396,  where  tenant  held  over  under  covenant  to  pay  increased 
rent,  but  paid  the  old  rental  and  this  was  held  not  to  be  a  renewal. 

2  Ferguson  v.  Jackson,  180  Mass.  557,  62  N.  E.  965. 


349  ELECTION— PARTICULAR  ACT  AS  §  833 

ing  the  increased  rental,  sufficiently  elects  to  avail 
himself  of  the  option  to  renew.^ 

Sec  833   PARTICULAR  ACT  AS  ELECTION 
OR  ACCEPTANCE.    RULE  WHERE   SAME 
RENTAL  IS  PAID.    RENEWALS.— The  deci- 
sions on  the  subject  matter  of  this  section  are  m 
conflict.  One  line  holds  that  the  act  of  holding  over 
is  not  sufficient  to  establish  an  affirmative  election 
to  renew  the  lease  for  an  additional  term  under  a 
stipulation  giving  the  privilege  of  such  renewal. 
This  is  based  on  the  theory,  supported  by  the 
weight  of  authority,  that  a  covenant  of  renewal 
implies  the  creation  of  a  new  term,  and  that  some 
exercise  of  the  right  of  election  to  assume  the  obh- 
gations  involved  thereunder  should  affirmatively 
appear,^  and  distinguishes  a  covenant  for  renewal 
from  a  privilege  of  extension  under  which  latter, 
any  act,  such  as  a  mere  holding  over,  shows  an 
election  to  treat  the  original  lease  as  continued  for 
the  extended  or  additional  term. 

Another  line  of  decisions  apparently  makes  no 

distinction  between  covenants  for  renewal  and  for 

sKelleherv.  Fong,  lOSMe.  181,  79  Atl.  466. 

mere  the  rent  under  the  renewal  is  to  be  agreed  on  by  the  parties,  the 
lease  is  not  renewed  where  there  is  no  agreement,  Hablich  v.  Univer- 
sity Park  Bldg.  Co,  117  Ind.  193,  97  N.  E.  539. 

iLeavitt  V  MaykeU,  203  Mass.  506,  89  N.  E.  1056,  distinguishing  earlier 
cases  which  were  construed  as  not  requiring  a  new  lease;  Andrews  v. 
Marshall  Creamery  Co.,  118  Iowa  595,  92  N.  W.  706,  60  L.  «•  A.  399, 
96  A  S  R.  412;  Whalen  v.  Manley,  68  W.  Va.  328,  69  S.  E.  843; 
see  Thiebaud  v.  Bank,  42  Ind.  212;  Terstegge  v.  Society,  92  Ind.  82, 
47  Am  Rep  135;  Renoud  v.  Daskam,  34  Conn.  512;  Kollock  v. 
Kaiser  98  Wis.  104,  73  N.  W.  776;  Carhart  v.  White  M.  &  T.  Co., 
122  Tenn.  455,  123  S.  W.  747,  19  Ann.  Cas.  396;  Chittenden  v. 
W.  U.  T.  Co.,  154  Mich.  1,  117  N.  W.  548. 


§  834  LAW    OF    OPTION    CONTRACTS  350 

extensions  and  rules  that  holding  over  amounts  to 
a  renewal  of  the  lease  for  the  stipulated  period.^ 

Sec.  834.  PARTICULAR  ACT  AS  ELECTION 
OR  ACCEPTANCE.  RULE  WHERE  SAME 
RENTAL  IS  PAID.    EXTENSIONS.— Where 

the  covenant  is  one  for  an  extension  of  the  term  of 
the  original  lease  and  does  not  pro^dde  for  notice 
of  election,  the  courts  are  in  substantial  agreement 
that  payment  and  receipt  of  the  same  rental  works 
an  extension  of  the  original  lease.^ 

The  difficulty  here,  however,  as  also  with  refer- 
ence to  renewals,  is  not  so  much  in  the  rule  of  law 
concerning  which  the  courts  substantially  agree,  as 
in  the  construction  of  particular  clauses  providing 
for  an  extended  or  additional  term.  The  rule  seems 
to  be  that  it  is  the  duty  of  the  court  to  discover 

2  Holton  V.  Andrews,  151  N.  C.  340,  66  S.  E.  212;  McBrier  v.  Marshall, 
126  Pa.  390,  17  Atl.  647;  Insurance  &  L.  Bldg.  Co.  v.  Nat'l  Bank, 
71  Mo.  58;  Eanlet  v.  Cook,  44  N.  H.  512,  84  Am.  Dec.  92;  Clarke  v. 
Merrill,  51  N.  H.  415;  see  Kentucky  Lumber  Co.  v.  Newell,  32  Ky.  L. 
Kep.  396,  105  S.  W.  972;  Ewing  v.  Miles,  12  Tex.  Civ.  App.  19,  33 
S.  W.  235;  Schroeder  v.  Gemeinder,  10  Nev.  355. 

1  Andrews  v.  Marshall  etc.  Co.,  118  Iowa  595,  92  N.  W.  706,  60  L.  R.  A. 
399,  96  A.  S.  R.  412 ;  Carhart  v.  White  M.  &  T.  Co.,  122  Tenn.  455,  123 
S.  W.  747,  19  Ann.  Cas.  396;  Mershon  v.  Williams,  62  N.  J.  L.  779,  42 
Atl.  778;  Harding  v.  Seeley,  148  Pa.  20,  23  Atl.  1118;  Callahan  Co.  v. 
Michael,  45  Ind.  App.  215,  90  N.  E.  642;  Terstegge  v.  Society,  92  Ind. 
82,  47  Am.  Rep.  135 ;  Peehl  v.  Bambalek,  99  Wis.  62,  74  N.  W.  545, 
"two  years  with  privilege  of  three  more";  Stone  v.  Stamping  Co., 
155  Mass.  267,  29  N.  E.  623;  Kramer  v.  Cook,  7  Gray  (Mass.)  550; 
Clarke  v.  Merrill,  51  N.  H.  415;  Delashman  v.  Berry,  20  Mich.  292, 
4  Am.  Rep.  392;  Quinn  v.  Valiquette,  80  Vt.  434,  68  Atl.  515;  In- 
surance etc.  Co.  V.  National  Bank,  71  Mo.  58;  Holley  v.  Young, 
66  Me.  520;  Montgomery  v.  Hamilton  Co.  Board,  76  Ind.  3G2,  40 
Am.  Rep.  250;  Hamby  &  Toomer  v.  Georgia  I.  &  C.  Co.,  127  Ga. 
792,  56  S.  E.  1033;  Falley  v.  Giles,  29  Ind.  114;  Lowry  Realty  Co. 
V.  Wiles,  123  Minn.  297,  143  N.  W.  738. 


351  ELECTION — PARTICULAR  ACT  AS  §  834 

the  intention  of  the  parties.^  This  rule,  like  the 
other  rule  just  mentioned,  is  well  established,  but 
its  application,  as  exhibited  by  the  decisions,  shows 
much  difference  of  opinion  even  as  applied  to 
clauses  whose  language  is  substantiality  the  same. 
The  consequence  is  that  a  clause  expressly  provid- 
ing for  a  "renewal"  is  sometimes  construed  to  be 
an  extension,  and  vice  versa.^ 

And  this  fact  suggests  that  entirely  too  much 
importance  is  attached  to  the  alleged  distinction 
between  renewals  and  extensions.  An  election  to 
renew  differs  from  an  election  to  extend  only  as 
the  facts  and  circumstances  differ.  If,  in  either 
case,  the  lease  requires  written  notice,  such  notice 
must  be  given  unless  it  is  waived  by  the  lessor, 
and  if  it  is  waived,  the  sufficiency  of  the  act  done 
as  an  election  cannot  be  determined  by  ascertain- 
ing, through  construction,  whether  the  covenant  is 
one  to  renew  or  one  to  extend,  but  only  by  deter- 
mining, under  all  the  facts  and  circumstances  of 
the  particular  case,  whether  the  act  is  such  as  to 
furnish  notice  to  the  lessor  of  the  intention  of  the 
lessee  to  exercise  his  option  privilege  to  renew  the 

2  Grant  v.  Collins,  157  Ky.  36,  162  S.  W.  539;  Kentucky  L.  Co.  v.  Newell. 

32  Ky.  L.  Eep.  396,  105  S.  W.  972. 

3  Orton  V.  Noonan,  27  Wis.  272,  holds  a  covenant  to  ' '  extend  the  lease ' ' 

contemplates  a  new  lease. 

Kentucky  L.  Co.  v.  Newell,  32  Ky.  L.  Eep.  396,  105  S.  W.  972,  con- 
struing the  word  "renewal"  as  meaning  an  extension. 

Hall  V.  Spaulding,  42  N.  H.  259,  right  to  a  "lease"  construed  as  an 
extension;  see,  also,  Briggs  v.  Chase,  105  Me.  317,  74  Atl.  796; 
Hamby  &  Toomer  v.  Georgia  I.  &  C.  Co.,  127  Ga.  792,  56  S.  E.  1033 ; 
Shamp  V.  White,  106  Cal.  220,  39  P.  537 ;  Seller  v.  Robinson,  50  Mich. 
264,  15  N.  W.  448;  Howell  v.  City  of  Hamburg  Co.,  165  Cal.  172,  131 
P.  130;  Flynn  v.  Bachner,  168  Mich.  424,  134  N.  W.  451,  Ann.  Gas. 
1913C,  641. 


§  835  LAW  OF  OPTION  CONTRACTS  352 

lease  or  to  extend  its  term/  The  fact  that  a  renewal 
contemplates  a  new  lease  while  an  extension  does 
not,  is  a  circumstance  to  be  considered,  but  it  is  not 
the  deciding  factor,  as  the  execution  of  the  new 
lease  is  to  follow  the  election  and  is  not,  therefore, 
the  election  or  performance,  unless,  of  course,  the 
duty  to  prepare  and  tender  the  lease  is  on  the 
lessee. 

Sec.  835.  PARTICULAR  ACT  AS  ELECTION 
OR  ACCEPTANCE.  RULE  WHERE  WRIT- 
TEN OR  FORMAL  NOTICE  IS  PROVIDED 
FOR  OR  IMPLIED  OR  THE  MODE  OF  COM- 
MUNICATION IS  PRESCRIBED.— It  is  an 
estabhshed  rule  that  the  provisions  of  the  contract 
control  with  reference  to  the  kind  of  notice  and  the 
mode  of  its  communication.  And  when,  therefore, 
a  lease  provides  for  written  notice,  or  implies 
formal  notice,  and  specifies  the  mode  of  its  com- 
munication, a  departure  from  the  requirements  of 
the  provisions  of  the  lease  in  any  of  these  respects 
is  fatal  unless  helped  out  by  the  rule  of  waiver,  or 
estoppel,  as  pointed  out  below.  Thus,  where  a  lease 
requires  a  written  notice,  a  mere  holding  over  after 
the  expiration  of  the  lease  does  not  show  an  elec- 

4  Holding  over  accompanied  by  some  act  showing  that  the  lessee  is  con- 
tinuing in  possession  under  the  privilege  of  extension  or  renewal 
and  not  as  a  mere  tenant  holding  over  after  the  expiration  of  the 
time,  is  generally  held  sufficient  to  renew  or  to  extend,  where  written 
or  formal  notice  is  not  specified.  See  Kimball  v.  Cross,  136  Mass. 
300,  renting  building;  Hurley-Tobin  Co.  v.  White,  (N.  J.)  94  Atl.  52. 
In  the  absence  of  an  express  provision  that  a  new  lease  was  intended, 
the  presumption  is  that  no  new  lease  is  to  be  executed,  but  that 
the  lessee  is  to  continue  to  hold  under  the  original  lease,  Callahan 
Co.  V.  Michael,  45  Ind.  App.  215,  90  N.  E.  642. 


353  ELECTION — PABTICULAB  ACT  AS  §  835 

tion  to  renew  ;^  and  so,  where  notice  is  required  a 
certain  time  before  the  expiration  of  the  term.^ 
But  in  the  absence  of  an  intention  of  the  parties 
appearing  from  the  instrument  to  require  written 
notice,  verbal  notice  is  sufficient.^ 

The  general  rule  above  stated,  however,  is  con- 
trolled by  the  facts  and  circumstances.  Accor- 
dingly, where  the  lessee  holds  over  and  pays  a 
higher  rental  which  is  received  by  the  lessor,  the 
written  notice  is  thereby  waived."  And  so  where 
he  holds  over  and  pays  the  same  rent.^  So  where 
the  lessor  consents  to  the  extension,  upon  verbal 
notice  from  the  lessee,  before  the  expiration  of  the 
time  fixed  in  the  lease  for  giving  the  notice.^   So, 

1  Cooper  V.  Joy,  105  Mich.  374,  63  N.  W.  414 ;  Tilleny  v.  Knoblauch,  73 

Minn.  108,  75  N.  W.  1039,  extension  implies  verbal  notice;  Callahan 
Co.  V.  Michael,  45  Ind.  App.  215,  90  N.  E.  642 ;  Seller  v.  Robinson, 
50  Mich.  264,  15  N.  W.  448 ;  Chamberlain  v.  Dunlop,  126  N.  Y.  45, 
26  N.  E.  966;  Gerhart  Realty  Co.  v.  Brecht,  109  Mo.  App.  25,  84 
S.  W.  216;  Jackson  Brewing  Co.  v.  Wagner,  117  La.  875,  42  So. 
356. 

2  English  V.  Murtland,  214  Pa.  325,  63  Atl.  882,  112  A.  S.  R.  747,  6  Ann. 

Cas.  339 ;  Beller  v.  Robinson,  supra,  involving  Statute  of  Frauds. 

3  Darling  v.  Hoban,  53  Mich.  599,  19  N.  W.  545;  Briggs  v.  Chase,  105 

Me.  317,  74  Atl.  796. 

4  Long  V.  Stafford,  103  N.  Y.  274,  8  N.  E.  522 ;  Stone  v.  St.  Louis  Stamp- 

ing Co.,  155  Mass.  267,  29  N.  E.  623. 
For  jury  to  determine  if  waiver  on  facts,  McClelland  v.  Rush,  150  Pa. 
57,  24  Atl.  354. 

5  Probst  V.  Rochester  S.  L.  Co.,  171  N.  Y.  584,  64  N.  E.  504,  by  remain- 

ing in  possession  and  paying  rent  the  lessee  impliedly  exercised  his 
option  and  the  lessor  by  receiving  the  rent  impliedly  waived  written 
notice;  Remm  v.  Landon,  43  Ind.  App.  91,  86  N.  E.  973;  see  Stone  v. 
St.  Louis  Stamping  Co.,  155  Mass.  267,  29  N.  E.  623;  Holtou  v. 
Andrews,  151  N.  C.  340,  66  S.  E.  212;  Kean  v.  Story  &  Clark  Piano 
Co.,  121  Minn.  198,  140  N.  W.  1031;  In  re  Allen's  Estate,  117  Minn. 
333,  135  N.  W.  812,  renewal  by  sub-tenant;  Dockery  v.  Thorne, 
(Tex.  Civ.  App.)   135  S.  W.  593. 

«  McClelland  v.  Rush,  150  Pa.  57,  24  Atl.  354. 
23 — Option  Contracts. 


§  836  LAW  OF  OPTION  CONTRACTS  354 

where  the  lessee,  under  a  lease  requiring  notice  to 
continue  to  be  served  90  days  before  the  expiration 
of  the  lease,  gives  notice  58  days  before  the  expira- 
tion and  continues  in  the  occupation  of  the 
premises,  without  objection,  after  the  expiration 
of  the  lease."^  So,  under  a  renewal  clause  providing 
for  appointment  of  appraisers  to  fix  the  new  rental, 
the  joining  in  the  appointment  of  appraisers  hj 
the  lessor  two  days  after  the  expiration  of  the 
lease,  waives  the  right  to  notice  from  the  lessee  of 
his  exercise  of  the  renewal  privilege.^ 

The  giving  of  written  notice  as  provided  in  the 
lease  constitutes  in  itself  a  renewal.^ 

Sec.  836.  PARTICULAR  ACT  AS  ELECTION 
OR  ACCEPTANCE.  FAILURE  OF  LESSEE 
TO  GIVE  NOTICE  TO  TERMINATE  THE 
LEASE.  ALSO  LESSOR'S  OPTION.— Leases 
sometimes  provide  that  they  shall  continue  in  force 
for  a  fixed  period  after  the  expiration  of  the  term 
originally  provided  for,  in  the  event  the  lessee  does 
not  give  notice  of  his  intention  to  terminate,  prior 
to  the  expiration  of  the  term.  In  such  cases  failure 
to  give  the  notice  to  terminate  required  by  the 
provisions  of  the  lease  works  a  continuance  of  the 
lease.^ 

Where  the  lease  gives  the  lessor  the  option  to 
extend  or  renew,  the  permission  given  by  the  lessor 

7  Sheppard  v.  Eosekrans,  109  Wis.  58,  85  N.  W.  199,  83  A.  S.  E.  886. 

8  Marino  v.  Williams,  30  Nev.  360,  96  P.  1073;  see  Wilson  v.  Herbert, 

76  Md.  489,  25  Atl.  685. 

9  Chittenden  v.  W.  U.  T.  Co.,  154  Mich.  1,  117  N.  W.  548;   Bettens  v. 

Hoover,  12  Cal.  App.  313,  107  P.  329. 

1  Dix  V.  Atkins,  130  Mass.  171;  see  Chretien  v.  Doney,  1  N.  Y.  419. 


355  ELECTION  VARYING  TERMS  §  837 

to  the  lessee  to  hold  over  is  an  exercise  of  the 
lessor's  option  to  extend  the  lease. ^ 

So,  where  the  lessor  has  an  option  to  purchase 
the  tenant's  improvements,  or  to  grant  a  renewal, 
and  the  lessor  fails  to  exercise  either  option,  and 
the  tenant  holds  over  f  such  failure  is  also  an  elec- 
tion by  the  optionor  to  pay  for  the  improvements/ 

Sec.  837.  ELECTION  VARYING  TERMS  OF 
OFFER    OR    OPTION.     GENERALLY.— The 

rule  is  that  to  raise  a  binding  contract,  the  offer 
must  be  accepted  in  accordance  with  the  terms  and 
conditions  made  by  it.  If  the  acceptance  or  election 
goes  beyond  or  falls  short  of  the  terms  proposed,  no 
contract  results.^  Within  this  rule  fall  the  time, 
the  place,  and  the  mode  of  acceptance.  Out  of  it 
grows  the  further  rule  that  the  acceptance,  or 
election,  must  be  absolute  and  unconditional. 

2LowTy  Realty  Co.  v.  Wiles,  123  Minn.  297,  143  N.  W.  738;  also  Trainer 
V.  Schutz,  98  Minn.  213,  107  N.  W.  812. 

3  Feldmeyer  v.  Werntz,  119  Md.  285,  86  Atl.  986. 

4  Bullock  V.  Grinstead,  95  Ky.  261,  24  S.  W.  867. 

1  Henry  v.  Black,  213  Pa.  620,  63  Atl.  250 ;  Breen  v.  Mayne,  141  Iowa 
899,  118  N.  W.  441;  Sawyer  v.  Brossart,  67  Iowa  678,  25  N.  W.  876, 
56  Am.  Rep.  371;  Atwood  v.  Rose,  32  Okl.  355,  122  P.  929;  Triplett 
V.  Gudebrod,  115  Va.  669,  79  S.  E.  1045;  Joy  v.  Birch,  4  CI.  &  Fin. 
57,  7  Eng.  Reprint  22 ;  Fulton  v.  Messenger,  61  W.  Va.  477,  56  S.  E. 
830;  Clark  v.  East  Lake  Lumber  Co.,  158  N.  C.  139,  73  S.  E.  793. 

Monahan  v.  Allen,  47  Mont.  75,  130  P.  768,  where  the  offer  and  ac- 
ceptance left  the  character  of  security  open  for  future  determination. 

There  can  not  be  an  acceptance  in  part,  Rehm-Zeiher  Co.  v.  F.  G. 
Walker  Co.,  156  Ky.  6,  160  S.  W.  777,  or  for  a  renewal  of  a  lease 
for  one  year  under  a  clause  for  renewal  for  a  four-year  term,  Mer- 
shon  V.  Williams,  62  N.  J.  L.  779,  42  Atl.  778;  see  Sec.  822 


§  838  LAW   OF    OPTION    CONTRACTS  356 

The  mode  and  place  of  acceptance,  or  election, 
have  already  been  presented.^  The  time  of  accep- 
tance will  be  considered  later  on.^  It  is  proposed 
to  present  in  the  next  following  sections  the  rule 
that  the  acceptance,  or  election,  must  be  absolute 
and  unconditional,  in  accordance  with  the  terms 
of  the  offer  or  option.  To  do  this,  clearly  it  seems 
necessary  to  point  out  the  distinction  between  a 
mere  offer  and  a  pure  option  as  well  as  the  distinc- 
tion between  an  election  under,  and  the  perform- 
ance of,  an  option  contract. 

Sec.  838.  EFFECT  OF  CONDITIONAL 
ACCEPTANCE  OR  ELECTION.  DISTINC- 
TION BETWEEN  ACCEPTANCE  OF  OFFER 
AND  ELECTION  UNDER  OPTION.— It  is  laid 
down  in  the  law  of  offers  that  a  qualified  or  condi- 
tional acceptance  is  a  rejection  of  the  offer. ^  It  is 
clearly  established  by  the  decisions  that  a  qualified 
or  conditional  acceptance  of  an  offer  does  not  raise 
a  contract  because  the  minds  of  the  parties  do  not 
meet  in  agreement  upon  the  same  terms.^  It  is  said 

.  2  See  Sees.  816-822. 
3  See  Sees.  848  et  seq. 

1  Minn.  etc.  Ry.  Co.  v.  Columbus  etc.  Co.,  119  U.  S.  149,  30  L.  Ed.  376, 

7  Sup.  Ct.  168;  Henry  v.  Black,  213  Pa.  620,  63  Atl.  250;  Russell 
V.  Falls  Mfg.  Co.,  106  Wis.  329,  82  N.  W.  134;  TUton  v.  Sterling 
C.  &  C.  Co.,  28  Utah  173,  77  P.  758,  107  A.  S.  R.  689;  Elmer  v. 
Hart,  121  La.  537,  46  So.  619;   Weaver  v.  Burr,  31  W,  Va.  736, 

8  S.  E.  743,  3  L.  R.  A.  94;  Lewis  v.  Johnson,  123  Minn.  409,  143 
N.  W.  1127;  Jones  v.  Moncrief-Cook  Co.,  25  Okl.  856,  108  P.  403. 

2  Atkins  v.  Kattman,  50  Ind.  App.  233,  97  N.  E.  174 ;  Winders  v.  Kenan, 

161  N.  C.  628,  77  S.  E.  687;  Couch  v.  McCoy,  138  Ted.  696;  Reich 
▼.  Dyer,  86  N.  Y.  S.  ^44,  91  App.  Div.  240;  Clark  v.  East  Lake  L. 
Co.,  158  N.  C.  139,  73  S,  E.  793;  Clark  v.  Burr,  85  Wis.  649,  55 
N.  W.  401,  403. 


357  EFFECT  OF  CONDITIONAL  ELECTION         §  838 

that  such  an  acceptance  is  a  counter-proposal  for 
a  new  contract,  to  give  legal  life  to  which  requires 
the  assent  or  acceptance  of  the  other  party.  ^  It  is 
in  this  sense  that  a  qualified  or  conditional  accep- 
tance is  a  rejection  of  the  offer  first  made  because 
the  original  negotiations  are  dropped  and  negotia- 
tions for  a  new  and  different  contract  begim. 

An  option  is  a  contract,  the  negotiations  for  the 
making  of  which  are  concluded  by  the  execution 
and  delivery  of  the  option.  The  minds  of  the 
parties  have  met  in  agreement,  the  distinctive  fea- 
ture of  which  is  that  the  optionor,  for  a  considera- 
tion, binds  himself  to  keep  the  option  open  for 
election  by  the  optionee,  for  and  during  the  time 
stipulated,  or  implied  by  law. 

3  Linn  v.  McLean,  80  Ala.  360 ;  Breen  v.  Mayne,  141  Iowa  399,  118  N.  W. 
441;  Pearson  v.  Millard,  150  N.  C.  303,  63  S.  E.  1053;  Tilton  v. 
Sterling  C.  &  g.  Co.,  28  Utah  173,  77  P.  758,  107  A.  S.  R.  689; 
Bowen  v.  McCarthy,  85  Mich.  26,  48  N.  W.  155;  Four  Oil  Co.  v. 
United  Oil  Producers,  145  Cal.  623,  79  P.  366,  68  L.  R.  A.  226,  offer 
to  sell  oil;  Weaver  v.  Burr,  31  W.  Va.  736,  8  S.  E.  743,  3  L.  R.  A.  94; 
Washington  v.  Rosario  Min.  Co.,  28  Tex.  Civ.  App.  430,  67  S.  W. 
459;  Corcoran  v.  White,  117  111.  118,  7  N.  E.  525,  57  Am.  Rep.  858; 
Larned  v.  Wentworth,  114  Ga.  208,  39  S.  E.  855;  James  v.  Darby, 
100  Fed.  224,  40  C.  C.  A.  341 ;  Atwood  v.  Rose,  32  Okl.  355,  122  P. 
929;  Elmer  v.  Hart,  121  La.  537,  46  So.  619;  King  v.  Maxey,  (Tex. 
Civ.  App.)  28  S.  W.  401;  Stitt  v.  Huidekopers,  17  Wall.  384,  21  L.  Ed. 
644;  Wetherby  v.  Griswold,  (Ore.)   147  P.  388. 

Millard  v.  Martin,  28  R.  I.  494,  68  Atl.  420,  rule  applied  in  favor  of 
grantee  of  lessor  where  lease  granted  option  to  purchase,  the  elec- 
tion of  the  lessee-optionee  being  conditional  or  rather  a  new  offer. 

If  the  optionor  assents  to  the  proposed  change  of  ferms,  the  contract 
of  sale  is  completed,  Linn.  v.  McLean,  supra;  Brooks  v.  Miller,  103 
Ga.  712,  30  S.  E.  630,  but  the  transaction  ia  considered  in  law  as 
a  new  proposal  and  acceptance.   See  cases  in  note  1,  supra. 

Agent  of  optionor  has  no  authority  to  consent  to  a  conditional  accep- 
tance, Larned  v.  Wentworth,  114  Ga.  208,  39  S.  E.  855. 

Rule  of  text  applies  to  option  to  return,  Alexander  v.  Bosworth,  (Cal. 
App.)   147  P.  607. 


§  838  LAW   OP    OPTION    CONTRACTS  358 

Under  an  option,  the  act  necessary  to  raise  a 
binding  promise  to  sell,  is  not,  therefore,  an  accep- 
tance of  the  offer,  but  rather  the  performance  of 
the  condition  of  the  option  contract.  If  this  is  true, 
then  the  rule  peculiar  to  offers  to  the  effect  that  a 
conditional  acceptance  is,  in  itself,  in  every  case,  a 
rejection  of  the  offer,  is  not  applicable  to  an  option 
contract,  supported  by  a  consideration  and  fixing 
a  time  limit  for  election.  < 

The  optionee  has  a  fixed  time  to  elect.  The  right 
to  elect  continues  for  the  full  period  unless,  prior 
to  its  expiration,  he  surrenders  or  breaches  the 
option.  Is  a  conditional  election  a  surrender  of  the 
option  right  ?  The  answer  depends  upon  the  facts. 
Suppose  the  optionee  in  a  notice  of  election  given 
on  the  last  day  of  the  time  limit,  through  inadver- 
tence, makes  it  a  condition  that  the  deed  of  convey- 
ance shall  be  delivered  at  a  certain  bank  where  he 
notices  he  has  deposited  the  price,  or  demands  the 
furnishing  of  a  certificate  of  title  to  the  property, 
neither  of  which  is  authorized  by  the  terms  of  the 
option,  but  the  optionee  discovering  his  mistake, 
immediately  thereafter,  on  the  same  day,  gives  a 
new  and  second  notice  squarely  meeting  the  terms 
of  the  option.  Has  the  optionee  lost  his  rights? 
Is  his  conditional  election  a  rejection  of  the  option 
privilege  ?  Certainly  not,  in  the  absence  of  a  show- 
ing that  in  making  the  conditional  election  it  was 
the  intention  of  the  optionee  not  to  accept  upon  the 
terms  of  the  option.  It  seems  to  us  that,  so  far  as 
an  option  contract  is  concerned,  a  conditional  elec- 
tion is  a  rejection  in  those  cases  only  where  the 
facts  show  an  intention  to  abandon  the  option 
rights.    A   conditional   election   purposely   made 


359  ELECTION  AND  PERFORMANCE  DISTINGUISHED  §  839 

undoubtedly  furnishes  strong  and  usually  conclu- 
sive evidence  of  sucti  intention.* 

Sec.  839.  ELECTION  AND  PERFORMANCE 
DISTINGUISHED.— Election,  as  we  have  seen, 
is  the  act  which  converts  the  option  into  a  binding 
promise  on  the  part  of  the  optionor  to  sell.  In  a 
very  broad  sense  it  is  an  act  of  performance,  but  a 
performance  which  is  optional  with  the  optionee. 
The  performance  we  now  have  in  mind  is  one  which 
grows  out  of  the  election  and  thus  becomes  obliga- 
tory upon  the  optionee.  As  thus  viewed  the  distinc- 
tion between  election  and  performance  is  apparent, 
since  the  former  has  to  do  with  the  creation  of  the 

4  It  will  be  found,  we  think,  upon  examination  of  the  cases  that  the 
counter-offers,  etc.,  held  to  be  rejections  showed  an  intention  to 
yield  up  the  option  privilege,  if  the  counter-proposition  was  not 
accepted,  see  Jones  v.  Moncrief-Cook  Co.,  25  Okl.  856,  108  P.  403; 
also  Foster  v.  City  of  Boston,  39  Mass.  33. 

See  James  v.  Darby,  100  Fed.  224,  40  C.  C.  A.  341,  to  the  point  that 
such  election  manifests  an  intention  to  make  a  new  contract  and  to 
abandon  the  old  one. 

Harper  v.  Eunner,  85  Neb.  343,  123  N.  W.  313,  holding,  in  effect,  that 
a  counter-proposition  did  not  destroy  the  option  privilege. 

McCormick  v.  Stephany,  61  N.  J.  Eq.  208,  48  Atl.  25,  holding  that  a 
conditional  election  is  not  a  rejection  of  the  option  privilege  in  the 
sense  of  ending  the  optionee 's  rights  thereunder,  when  a  subsequent 
proper  and  timely  election  is  made;  the  Court  referring  to  the  rule, 
said  it  applied  only  to  offers  and  not  to  an  option  supported  by  a 
consideration.  See,  also.  Royal  Brewing  Co.  v.  St.  Louis  Brewing  Co., 
(Mo.  App.)  176  S.  W.  553. 

See  Ward  v.  Wolverhampton  Water  Works,  L.  R.  13  Eq.  234,  41  L.  J. 
Ch.  308,  25  L.  T.  Rep.  (N.  S.)  487,  20  Wkly.  Rep.  85,  holding  that 
giving  a  first  notice  not  followed  up  did  not  prevent  the  optionee 
giving  a  second  notice. 

But  this  rule  would  not  apply  when  the  original  option  has  been  super- 
seded by  another  fixing  a  different  time,  Cleaves  v.  Walsh,  125  Mich. 
638,  84  N.  W.  1108. 


§  839  LAW    OF    OPTION    CONTRACTS  360 

contract  and  the  latter  with  the  fulfillment  of  the 
terms  of  that  contract  after  its  creation. 

The  distinction  just  noted  is  an  important  one 
in  the  law  of  options.  Owing  to  the  one-sided 
nature  of  the  option  contract,  the  law  is  insistent 
that  the  election,  that  is,  the  act  which  raises  the 
option  to  a  contract,  shall  be  strictly  in  accordance 
with  the  terms  of  the  option.  Whereas,  perform- 
ance of  the  contract  thus  raised  is  governed  by 
rules  applicable  to  contracts  generally  and  the  con- 
sequence is  that  the  rules  of  waiver,  forfeiture  and 
such  like  which  play  so  important  a  part  in  the 
law  of  what  may  be  called  technical  breach,  is 
rather  reluctantly  applied,  if  applied  at  all,  in 
many  instances,  to  help  out  an  election  which  fails 
in  any  substantial  particular  to  meet  the  require- 
ments of  the  option. 

The  option  itself  is  the  test  of  the  sufficiency  of 
the  election,  but  it  is  sometimes  difficult  to  deter- 
mine from  the  language  used  just  what  acts  consti- 
tute the  election.  It  is  competent,  for  instance,  to 
provide  that  in  addition  to  communication  of  the 
bare  fact  that  the  optionee  elects  to  purchase,  that 
the  whole  or  a  part  of  the  price  for  the  property 
shall  then  be  paid,  or  that  some  other  act  shall  be 
done  as  a  part  of  the  act  of  election  or  as  a  condition 
precedent  to  the  exercise  of  the  option  privilege. 
Clearly  in  such  cases  a  mere  notice  of  election  is 
fatally  short  of  the  option  requirements.^  On  the 
other  hand,  if  the  option  provides  for  notice  merely 

]  Pollock  V.  Brookover,  60  W.  Va.  75,  53  S.  E.  795,  6  L.  R.  A.   (N.  S.) 
403 ;  Killough  v.  Lee,  2  Tex.  Civ.  App.  260,  21  S.  W.  970. 
As  to  conditions  precedent  to  the  exercise  of  the  option  privilege,  like 
paying  rent,  etc.,  see  Sec.  715  et  seq. 


361  ELECTION  VARYING  TERMS  §  840 

and  contemplates  that  the  price  shall  be  paid  or 
the  other  acts  performed  after  the  act  of  election, 
then  such  acts  are  not  part  of  election  but  have  to 
do  with  the  performance  of  the  contract  solely  and 
only.^ 

The  distinction  we  are  endeavoring  to  bring  out 
is  that  in  the  latter  class  of  cases,  election  is  an  act 
entirely  separate  and  apart  from  the  paying  or 
the  securing  of  the  price,  and  that  payment  and 
securing  of  the  price  are  merely  matters  of  per- 
formance of  the  contract  raised  by  the  election,  the 
sufficiency  and  timeliness  of  which  are  tested  by 
the  rules  of  law  relating  to  the  performance  of 
contracts  generally  and  not  by  the  rules  of  law 
peculiar  to  the  acceptance  of  offers.' 

Sec.  840.  ELECTION  VARYING  TERMS  OF 
OPTION.  CASES.— An  offer  by  letter  of  a  bar- 
gain, by  one  person  to  another,  imposes  no  obliga- 
tion upon  the  former,  unless  it  is  accepted  by  the 
latter  according  to  the  terms  in  which  the  offer  was 
made.^  The  optionee  can  not  insist  upon  anything 
more  than  compliance  with  the  original  proposal.^ 

2  See  Turner  v.  MeCormick,  56  W.  Va.  161,  49  S.  E.  28,  107  A.  S.  E.  904, 

67  L.  R.  A.  853;  Winders  v.  Kenan,  161  N.  C.  628,  77  S.  E.  687; 
Brown  v.  Slee,  103  U.  S.  828,  26  L.  Ed.  618;  Penn.  Min.  Co.  v. 
Smith,  207  Pa.  210,  56  Atl.  426;  Hardy  v.  Ward,  150  N.  C  385, 
64  S.  E.  171;  Binford  v.  Steele,  161  N.  C.  660,  77  S.  E.  954. 

3  Breen  v.  Mayne,  141  Iowa  399,  118  N.  W.  441;  Brown  v.  Slee,  and  cases 

supra. 

1  Eliason  t.  Henshaw,  4  Wheat.   (U.  S.)   228;   see  Bowen  v.  McCarthy, 

85  Mich.  26,  48  N.  W.  155. 

2  Eggleston  v.  Wagner,  46  Mich.  610,  10  N.  W.  37,  this  case  involved  an 

option  by  one  partner  to  purchase  the  interest  of  the  other,  the 
tender  not  allowing  for  debts  paid  off  after  the  date  of  the  option. 


§  840  LAW    OP    OPTION    CONTRACTS  362 

To  constitute  a  binding  contract  made  by  corres- 
pondence tbere  must  be  a  proposal  squarely  and 
unqualifiedly  assented  to.^ 

Where  the  owner  of  a  piece  of  property  offers  to 
sell  it  for  a  specified  amount  of  money  and  the 
offeree  telegraphs,  "Accept  your  offer  for  two 
buildings  at  $5000.  Money  at  your  order  at  First 
National  Bank  here.  Telegraph  me  immediately 
when  to  expect  deed/'  the  acceptance  is  not  one 
contemplated  by  the  offer,  and,  therefore,  creates 
no  rights  in  the  latter  to  claim  specific  perform- 
ance.* 

An  election  by  an  assignee  of  the  optionee  ten- 
dering his  own  notes  for  the  deferred  payments  is 
not  in  accordance  with  the  terms  of  the  option  and 
is,  therefore,  insufficient.^ 

An  option  provided  that  $25,000  of  the  price 
should  be  paid  in  cash  and  the  balance  by  note, 
secured  by  purchase  money  mortgage,  for  a  speci- 
fied time  and  interest.  An  election  tendering  $5000 
cash  and  a  common  bond  and  mortgage  "to  be 
limited  to  the  premises,"  thus  avoiding  personal 
liability  on  the  bond,  is  insufficient.^ 

3Wristen  v.  Bowles,  82  Gal.  84,  22  P.  1136. 

Inquiry  if   optionor  will  accept   modified   terms   is   not  a   conditional 
election,  nor  a  rejection,  Stevenson  v.  McLean,  5  Q.  B.  D.  346. 

4  Sawyer  v.  Brossart,  67  Iowa  678,  25  N.  W.  876,  56  Am.  Eep.  371,  the 

optionor  resided  at  Los  Angeles,  Cal. ;  the  property  was  situated 
at  Iowa  City,  Iowa;  clearly  the  money  was  payable  at  Los  Angeles; 
the  telegram  was  sent  from  Iowa  City. 

5  Eice  V.  Gibbs,  40  Neb.  264,  58  N.  W.  724. 
0  Henry  v.  Black,  213  Pa.  620,  63  Atl.  250. 


363  CONDITIONAL  ELECTIONS  §  841 

Sec.  841.     CONDITIONAL    ELECTIONS. 

CASES. — Courts  have  justly  and  properly  shown 
a  discrhninating  liberality  in  favor  of  the  optionee 
where,  in  a  particular  case,  equity  seemed  to 
require  it,  in  determining  what  are  and  what  are 
not  conditional  elections.^  But  there  is  a  point 
beyond  which  there  is  no  room  for  the  application 
of  any  but  legal  principles.  Where,  in  the  notice 
of  election,  it  is  expressly  made  a  condition  prece- 
dent to  the  election  itself  that  the  optionor  shall  do 
some  unauthorized  act  or  forego  some  authorized 
right  the  election  is  ineffectual  for  any  purpose. 
Thus,  where  the  notice  of  election,  accepting  an 
offer  to  sell  oil,  made  it  a  condition  precedent  that 
the  oil  must  be  at  a  fixed  temperature,  and  the  offer 
itself  was  silent  on  this  point,  it  is  a  qualified  and 
conditional  acceptance  and,  therefore,  amounts  to 
a  rejection  of  the  offer.^ 

Where  the  offer  is  to  sell  land  for  cash,  a  notice 
of  election  "providing  the  title  is  perfect,"  without 
tender  or  payment  of  the  cash,  does  not  make  a 
contract.^ 

An  election,  ''if  details  are  satisfactorily 
arranged"  and  if  an  abstract  of  title  is  furnished 
which  the  attorneys  of  the  optionee  shall  pronounce 

1  Bonnewell  v.  Jenkins,  L.  R.   8   Ch.  Div.   70,  the  intention  to  add  an 

unauthorized  condition  must  be  clearly  expressed  and  made  to  op- 
tionor; strict  construction  is  the  rule;  Gibbins  v.  Asylum  Dist.,  11 
Beav.  1,  17  L.  J.  Ch.  5,  50  Eng.  Reprint  716. 

2  Four  Oil  Co.  v.  United  Oil  Producers,  145  Cal.  623,  79  P.  366,  68  L.  R. 

A.  226,  this  was  a  mere  offer  of  sale  and  not  an  option. 

S  Corcoran  v.  White,  117  HI.  118,  7  N.  E.  525,  57  Am.  Rep.   858,  this 
also  was  a  mere  offer. 
Friendly  v.  Elwert,  57  Ore.  599,  105  P.  404,  112  P.  1085,  Ann.  Gas. 
1913A,  357,  requiring  title  cleared  up;   there  was  no  consideration; 
see  Earned  v.  Wentworth,  114  Ga.  208,  39  S.  E.  855, 


§  841  LAW   OF   OPTION    CONTRACTS  364 

perfect,  when  the  option  contains  no  such  require- 
ments, is  not  an  ** acceptance'*  of  the  option/ 

Where  the  option  provides  for  the  sale  of  a  cer- 
tain number  of  acres  of  land  "more  or  less,"  a 
notice  of  election  by  the  optionee  to  purchase  the 
exact  number  of  acres  named  "provided  a  clear 
and  undisputed  title  can  be  made"  for  the  whole 
tract,  is  insufficient  to  give  the  optionee  any  rights.^ 
The  optioned  property  having  burned,  an  election 
by  the  optionee  on  condition  that  the  insurance 
money  should  be  applied  on  the  price,  was  held 
conditional  and  unauthorized.^ 

A  notice  of  election  which  fixes  a  different  place 
for  the  delivery  of  the  deed  and  payment  of  the 
purchase  money  from  that  implied  by  the  terms  of 
the  option,  is  not  an  unconditional  "acceptance" 
so  as  to  bind  the  optionor/ 

An  election  which  fixes  a  time  for  the  pa}Tnent 
of  the  cash  installment  required  by  the  option,  or 
which  requires  the  optionor  to  furnish  an  abstract 
of  title,  not  called  for  by  the  option,  is  conditional.^ 

4  James  v.  Darby,  100  Fed.  224,  40  C.  C.  A.  341.    In  this  case  the  optionee 

expressly  imposed  unauthorized  conditions  as  a  condition  precedent 
to  acceptance. 
As  to  waiver,  see  Fulton  v.  Messenger,  61  W.  Va.  477,  56  S.  E.  830. 

5  Clark  V.  East  Lake  L.  Co.,  158  N,  C.  139,  73  S.  E.  793. 

6  Clark  V.  Burr,  85  Wis.  649,  55  N.  W.  401. 

TLangellier  v.  Schaefer,  36  Minn.  361,  31  N.  W.  690;  this  was  a  mere 
offer  and  by  its  express  terms  the  price  was  payable  in  cash;  see 
Beiseker  v.  Amberson,  17  IST.  D.  215,  116  N.  W.  94,  distinguished  in 
Horgan  v.  Eussell,  24  N.  D.  490,  140  N.  W.  99,  43  L.  R.  A.  (N.  S.) 
1150;  also  Bowen  v.  McCarthy,  85  Mich.  26,  48  N.  W.  155;  Clark  v. 
East  Lake  L.  Co.,  supra;  Curtis  v.  Sexton,  142  Mo.  App.  179,  125 
S.  W.  806,  repurchase. 

8  Knox  V.  McMurray,  159  Iowa  171,  140  N.  W.  652. 


365  CONDITIONAL  ELECTIONS  §  842 

Sec.  842.    SAME.    CONTINUED.— An  option 
contract  required  the  purchaser,  on  his  electing  to 
purchase,  to  pay  one-half  of  the  price  in  cash  and 
secure  the  balance.  In  making  his  election  he  pre- 
pared and  tendered  a  deed  to  the  optionors  for  their 
execution  and  which  as  prepared  also  required  the 
execution  by  parties  other  than  the  optionors  (heirs 
and  devisees) ,  the  latter  of  whom  were  not  named 
in  the  option,  or  as  the  court  said  "nominated  in 
the  bond."  It  further  appeared  that  the  optionee 
failed  to  tender  the  cash  part  of  the  price,  or  the 
security  for  the  balance,  within  the  option  time. 
It  was  held  the  election  was  conditional  because  of 
the  demand  for  the  execution  of  a  deed  by  the  heirs 
and  devisees,  and  further,  that  by  the  terms  of  the 
option,  payment  of  the  cash  part  of  the  price  and 
the  securing  of  the  balance,  were  a  part  of  the 
act  of  election,  and,  therefore,  necessary  to  bring 
into  existence  a  binding  contract  of  sale  and  pur- 
chase.^ 

A  written  notice  of  election  accepting  an  option 
** subject  to  a  good  title  guaranteed  by"  a  certain 
title  company  is  conditional  where  no  such  require- 
ment is  contained  in  the  option.'  An  election  and 
tender  coupled  with  a  demand  for  a  receipt  for  a 
larger  siun  than  has  been  paid,  is  insufficient.^  An 
*' acceptance"  of  an  offer  to  purchase,  accompanied 

1  Trogden  v.  WilUams,  144  N.  C.  192,  56  S.  E.  865,  10  L.  E.  A.  (N.  S.) 

867. 

2  Elmer  v.  Hart,  121  La.  537,  46  So.  619. 

So,  where  the  election  is  on  condition  that  the  title  is  perfect,  Wash- 
ington V.  Rosario  M.  Co.,  28  Tex.  Civ.  App.  430,  67  S.  W.  459. 

3  Rude  V.  Levy,  43  Colo.  482,  96  P.  560,  24  L.  R.  A.   (N.  S.)   91,  127 

A.  S.  R.  123. 


§  843  LAW  OP  OPTION  CONTRACTS  366 

by  a  check  in  part  payment,  the  balance  **  to  be  paid 
in  90  days,  if  titles  are  clear,"  is  conditional/ 

Sec.  843.  UNCONDITIONAL  ELECTION. 
TUKNEE  V.  Mccormick.— It  is  necessary  to 
keep  in  mind  the  distinction  heretofore  pointed  out 
between  those  acts  necessary  to  raise  the  option 
contract  to  an  agreement  of  sale,  and  those  acts 
which  have  reference  to  the  performance  of  the 
agreement  of  sale  after  it  has  been  brought  into 
existence. 

The  distinction  is  made  in  a  West  Virginia  case 
and  is  well  illustrated  by  the  facts  of  that  case.^ 

4  Adams  v.  Bridges,  141  Ga.  418,  81  S.  E.  203. 

1  Turner  v.  McCormick,  56  W.  Va.  161,  49  S.  E.  28,  107  A.  S.  R.  904, 
67  L.  R.  A.  853. 
It  will  be  noted  that  ' '  acceptance ' '  constituted  the  sole  act  of  election, 
for,  by  the  terms  of  the  option,  the  price  was  payable  one-third  cash 
on  delivery  of  deed,  and  the  balance  in  two  equal  annual  payments. 
The  court  very  correctly  said  the  case  would  not  have  been  different 
in  principle  if  the  optionee  had  first  given  notice  of  his  election  and, 
on  the  following  day,  by  another  telegram,  made  the  request  referred 
to.  Some  importance  is  attached  to  the  fact  that  the  acceptance  was 
"according  to  the  terms  of  the  option."  The  court  distinguished 
Potts  V.  Whitehead,  23  N.  J.  Eq.  512,  because  of  this  fact,  and  on 
the  further  ground  that  the  time  for  the  payment  of  the  installments 
of  the  price  was  not  fixed  by  the  terms  of  the  option.  Also  Sawyer 
V.  Brossart,  67  Iowa  678,  25  N.  W.  876,  56  Am.  Rep.  371,  on  the 
ground  that  the  acceptance  made  payment  of  the  price  at  a  place 
other  than  that  of  the  optionor,  the  place  fixed  by  law.  Also  Cor- 
coran V.  White,  117  Bl.  118,  7  N.  E.  525,  57  Am.  Dec.  858,  because 
there  was  no  acceptance  and  indicating  an  intention  on  the  part  of 
the  optionee  not  to  accept  if  the  title  was  not  perfect.  The  court 
also  distinguishes  a  line  of  decisions  (cited)  holding  that  an  accep- 
tance fixing  a  place  for  the  delivery  of  the  deed  and  payment  of  the 
price  other  than  the  residence  of  the  optionor,  or  the  place  named 
in  the  option,  is  unconditional,  on  the  ground  that  in  none  of  the 
decisions  did  it  appear  that  there  was  an  "unequivocal  and  definite 
acceptance  as  in  this  case, ' '  and  adds :  ' '  Moreover  the  reasoning  in 
some  of  the  cases  is  not  satisfactory    ...    If  a  man  says  '  I  accept 


367  UNCONDITIONAL  ELECTIONS  §  843 

It  involved  an  option  on  coal  lands  by  the  terms  of 
which  the  optionee  was  given  until  a  certain  day 
to  accept,  and  fixed  the  price  at  a  certain  sum  per 
acre,  ''one-third  to  be  paid  in  cash  on  delivery  of 
deed  and  the  balance  in  two  equal  annual  pay- 
ments." 

The  option  further  provided  that  the  optionor 
would,  within  ninety  days  after  notice  in  writing  of 
election  to  purchase,  execute  a  good  and  sufficient 
deed  to  the  optionee.  The  written  notice  of  election 
was  as  follows:  ''I  hereby  notify  you  that  your 
coal  land  will  be  accepted  according  to  the  terms 
of  the  option  given  me  on  same  and  respectfully 
request  you  to  make  delivery  of  deed  with  abstract 
of  title  to  me"  on  a  certain  day  after  the  expiration 
of  the  time  limit,  at  "hour  and  place  to  be  decided 
later,"  the  place  being  where  the  option  was 
executed. 

The  suit  was  for  specific  performance  and  one 
of  the  defenses  was  that  the  notice  of  election  was 
conditional  because  of  the  request  therein  that  the 
deed  be  delivered  on  the  28th  of  June,  1902,  which 
was  a  date  more  than  ninety  days  after  the  first  of 
March,  the  time  limit  for  "acceptance,"  and  more 
than  ninety  days  after  the  notice  of  "acceptance" 
within  which,  by  the  terms  of  the  option,  the 
optionor  was  to  make  his  deed.  The  court  held  the 
"request"  did  not  make  the  election  conditional; 
tha.  it  related  to  the  performance  of  the  contract 
and  was  not  an  element  in  its  making,  although 
written  and  connected  with  the  acceptance,  on  a 

your  offer/  that  makes  a  contract.  It  assents  to  all  the  terms  of  the 
offer.  .  .  .  How  can  a  mere  request  relating  not  to  the  making  of 
the  contract,  but  to  its  performance,  be  deemed  to  change  it?" 


§  844  LAW  OF  OPTION  CONTRACTS  368 

single  sheet  of  paper,  so  as  to  make  of  the  accep- 
tance and  request  a  compound  sentence. 

Sec.  844.  UNCONDITIONAL  ELECTION. 
KREUTZER  v.  LYNCH.— In  this  case'  the  notice 
of  election,  in  the  form  of  a  letter,  dated  at  W, 
where  the  optionee  resided,  was  sent  by  post  to  the 
optionor  at  B  in  the  same  state,  where  the  optionor 
resided.  The  option  ran  for  thirty  days  and  fixed 
the  price  at  $6000.  The  notice  of  election  was  as 
follows:  "Your  option  (describing  the  option  and 
the  land,  and  reciting  assignment  to  plaintiff)  is 
hereby  accepted.  Please  forward  deed  and  abstract 
of  title  to  (bank)  of  W,  Wis.,  with  instructions  to 
the  bank  to  let  us  inspect  the  papers  and  if  the  title 
is  found  perfect  to  deliver  to  us  on  payment  of 
$6000.  Make  deed  to  (a  certain)  Co."  The  optionor 
refused  to  convey  and  suit  for  specific  performance 
was  brought.  The  trial  court  held  that  the  notice 
of  election  was  a  "categorical  acceptance'*  of  the 
option,  and  that  the  portion  thereof  with  reference 
to  the  deed,  abstract,  etc.,  was  not  intended  by 
plaintiff,  nor  understood  by  defendant,  as  a  quali- 
fication of  such  "acceptance,"  but  merely  a  con- 
venient method  of  closing  the  trade  by  reason  of  a 
suggestion  made  in  a  conversation  that  it  might  be 
closed  by  correspondence.  Judgment  went  for 
plaintiff  for  specific  performance  and  the  defen- 
dants appealed.  The  Supreme  Court  held  that, 
upon  the  facts  stated,  the  option  was  "accepted" 

iKreutzer  v.  Lynch,  122  Wis.  474,  100  N.  W.  887,  the  optionors  were 
partners  for  the  management  and  sale  of  lands;  option  was  given  by 
the  managing  partner;  the  decree  for  specific  performance  was 
directed  against  both  partners;  also  Gates  v.  McNeil,  (Cal.)  147 
P.  944. 


369  UNCOXDITIOKAL  ELECTIONS  §  844 

according  to  its  exact  terms  and  without  qualifi- 
cation. 

In  the  Turner  case-  the  price  was  payable  one- 
third  cash  upon  delivery  of  the  deed  and  the  bal- 
ance in  two  equal  annual  installments.  In  the  case 
under  consideration  there  was  no  express  stipu- 
lation with  reference  to  the  time  of  pajnnent  of 
the  price.  The  law,  therefore,  fixed  the  time  as  of 
the  delivery  of  the  deed.  In  principle,  therefore, 
the  two  cases  are  the  same.  In  neither  case  was 
there  a  tender,  and  in  neither  case  was  a  tender 
necessary,  because  tender  of  the  price  was  not,  by 
the  terms  of  the  option,  made  one  of  the  acts  nec- 
essary to  constitute  an  election.  In  the  language 
of  the  Turner  case,  tender  or  pa}'ment  of  the  price 
under  this  particular  form  of  option  is  perform- 
ance of  the  contract  arising  from  the  act  of 
"  acceptance '*  and  is  governed  by  the  rules  on  that 
subject  relating  to  agreements  of  sale  to  the  eifect 
that  payment  of  the  price  is  concurrent  with  ten- 
der of  the  deed. 

In  the  case  under  consideration,  the  defendants 
raised  the  point  that  no  tender  of  the  price  and 
demand  for  deed  had  been  made.  The  court  inti- 
mated that  tender  should  have  been  made,  but 
turned  the  point  against  defendants  by  holding  that 
the  optionor,  having  denied  the  existence  of  the 
contract  and  notified  the  optionee  that  no  convey- 
ance of  the  land  would  be  made,  waived  tender  of 
the  price  *'as  a  necessary  step  to  the  placing  of  the 
optionee  in  default." 

2  See  Sec.  843,  supra. 
24 — Option  Contracts. 


§  845  LAW    OF    OPTION    CONTRACTS  370 

Sec.  845.  UNCONDITIONAL  ELECTION. 
HORGAN  V.  RUSSELL.— This  was  an  option^ 
running  thirty  days  from  date,  on  certain  land,  for 
the  sum  of  $1600  and  by  its  terms  required  the 
optionees  to  signify  *' their  intentions  to  take  or 
reject  the  same  by  due  notice  in  writing  within  the 
time  above  specified  and  their  failure  to  serve  such 
notice,  .  .  .  shall  terminate  this  option  without 
further  notice,  time  being  the  essence  of  this  agree- 
ment." The  option  further  provided  that  in  case 
notice  was  served  in  due  time,  thirty  days  would 
be  given  in  which  to  examine  abstract,  make  deeds, 
and  close  sale. 

The  optionees,  in  due  time,  served  notice  signify- 
ing their  intention  to  take  the  land,  setting  forth 
that  the  optionees  "are  ready,  able  and  willing  to 
perform  each  and  all  of  the  terms  thereof  at  such 
time  and  in  such  manner  as  may  be  designated  by 
you  according  to  the  terms  of  said  contract,  and  for 
that  purpose  are  ready,  able  and  willing  to  deposit 
the  sum  of  $1600  to  your  credit,  in  such  time  and 
place  and  manner  as  may  be  designated  by  you,  and 
hereby  demand  an  abstract  and  deed  of  said  land." 

.  It  was  argued  that  the  "acceptance"  was  condi- 
tional because  an  abstract  of  title  was  demanded 
and  also  because  the  optionor  was  asked  to  desig- 

1  Horgan  v.  Eussell,  24  N.  D.  490,  140  N.  W.  99,  43  L.  R.  A.  (N.  S.) 
1150,  distinguishing,  Beiseker  v.  Amberson,  17  N.  D.  215,  116  N.  W. 
94,  which  involved  a  mere  offer  to  sell  land  by  saying  that,  in  the 
letter  of  acceptance  in  the  latter  case,  the  optionee  qualified  his 
acceptance  by  the  imposition  of  new  terms,  requiring  the  optionor 
to  transmit  the  deed  to  the  optionee  at  a  place  other  than  that 
required  by  the  offer.  The  optionee  also  requested  the  optionor  to 
assign  the  insurance  policy  on  the  property,  and  there  was  no  tender 
of  the  price  which  was  payable  in  ' '  cash ' ' ;  see,  also,  Gibbins  v. 
Asylum  Dist.,  11  Boa  v.  1,  17  L.  J.  Ch.  5,  50  Eng.  Reprint  716. 


371  UNCONDITIONAL  ELECTIONS  §  846 

nate  a  time,  place  and  manner  of  deposit  and 
performance.  The  court  noting  the  distinction 
between  election  under  the  option  and  performance 
of  the  contract  arising  therefrom,  held  that  the  first 
part  of  the  written  election  was  an  unqualified  and 
unconditional  "acceptance,"  and  that  the  latter 
part  with  reference  to  an  abstract  and  other  matters 
was  not  a  part  of  the  "acceptance"  but  had  refer- 
ence solely  and  only  to  the  performance  of  the 
contract  after  election,  and  that,  therefore,  the 
"acceptance"  was  not  conditional. 

Sec.  846.     UNCONDITIONAL    ELECTION. 

Mccormick  v.  stephany.— tms  was  an 

option'  contained  in  a  lease  giving  the  lessee  the 
right  or  option  to  purchase  the  leased  premises,  at 
a  certain  price,  in  case  the  lessor  should  find  a  pur- 
chaser for  the  premises.  In  other  words,  the  lease 
gave  the  lessee  the  "preferential  right"  to  pur- 
chase. It  appeared  the  lessor  found  a  purchaser, 
and  the  lessee  thereupon  gave  written  notice  to  the 
lessor,  of  the  exercise  of  the  option  to  purchase  the 
premises,  at  the  stipulated  price,  and  that  the  same 
would  be  paid  on  tender  of  a  deed  "with  full  cove- 
nants," there  being  no  such  requirement  in  the 
lease  or  option.  Later,  the  lessee  tendered  the  price 
and  demanded  a  deed  "with  full  covenants,  free  of 
all  encumbrances."  The  lessor,  on  the  following 
day,  refused  to  make  a  deed  "with  full  covenants 

1  McCormick  v.  Stephany,  61  N.  J.  Eq.  208,  48  Atl.  25,  the  facts  as 
reported,  show  that  the  lessee  refused  to  give  the  deed  upon  the 
express  ground  that  he  was  not,  by  the  terms  of  the  lease,  required 
to  give  such  kind  of  deed.  But  the  refusal  is  a  negligible  quantity. 
Followed  and  approved  in  Myers  v.  Metzger,  61  N.  J.  Eq.  522,  48 
Atl.  1113. 


§  846  LAW  OP  OPTION  CONTRACTS  372 

free  of  all  encumbrances,"  giving  as  a  reason  that 
the  lessee  was  not  entitled  to  that  kind  of  a  deed 
under  the  lease,  or  otherwise. 

Suit  was  brought  for  specific  performance,  and 
the  decree  went  for  the  lessee  requiring  merely  that 
the  lessor  execute  ''a  good  and  sufficient  deed  for 
the  premises,"  upon  payment,  etc.,  and  not  requir- 
ing a  deed  with  full  covenants. 

The  case  was  appealed  and  on  appeal  it  was  urged 
that  the  demand  by  the  lessee,  in  his  notice  of  elec- 
tion to  purchase,  for  a  deed  with  full  covenants, 
was  not  in  accordance  with  the  provisions  of  the 
lease,  was  conditional  and  was,  therefore,  a  rejec- 
tion, and  operated  as  a  forfeiture  of  the  option 
privilege.  The  court  of  chancery  held  that  the 
option  clause  in  the  lease  was  not  a  ''mere  offer," 
which  being  without  consideration  must  be  accepted 
in  the  terms  of  the  offer  and  which  must  be  held  to 
be  rejected  by  a  conditional  acceptance,  but  was 
rather  a  completed  purchase  of  the  right  to  have  a 
conveyance,  if  the  purchaser  should  choose  to  buy 
upon  the  terms  named,  and  that,  therefore,  a 
demand  in  the  notice  of  election  for  more  than  the 
option  contract  obligated  the  optionor  to  convey, 
should  not  be  held  to  be  a  rejection  of  the  privilege 
to  purchase,  thus  enabling  the  optionor  to  retain 
the  consideration  paid,  and  to  refuse  to  convey,  and 
that,  consequently  a  subsequent  demand  (by  way 
of  amendment  to  the  complaint  for  specific  per- 
formance) in  accordance  with  the  terms  of  the 
option,  was  binding  upon  the  optionor.  The  judg- 
ment of  the  trial  court  was  affirmed. 


373  UNCONDITIONAL  ELECTIONS  §  847 

Sec.  847.    UNCONDITIONAL  ELECTIONS. 

OTHER  CASES.— Where  the  contract  bound  the 
purchaser  to  reconvey  the  premises  to  the  vendor 
on  his  electing  to  repurchase,  and  giving  notice  of 
his  intention  to  do  so,  before  a  designated  day,  a 
notice  of  election  to  repurchase  is  not  invalidated 
merely  because  it  improperly  requires  the  pur- 
chaser to  go  to  a  designated  office  for  the  price  and 
make  deed,^  or  because  it  proposed  to  transact  the 
business  through  a  bank  at  H,  where  the  optionee 
resided,^  as  such  acts  are  not  elements  of  acceptance 
but  performance  of  the  contract.^ 

Where  the  terms  of  the  option  were  $6000  cash 
and  a  note  for  $16,000  to  be  secured  by  mortgage 
to  be  paid  in  one  year  with  interest,  notice  of  elec- 
tion offering  to  pay  $16,000  cash  together  with 
interest  on  $10,000  for  one  year,  was  a  sufficient 
acceptance.*  An  "acceptance"  of  a  cash  offer  of 
$3500  is  not  made  conditional  by  offering  $500 
before  delivery  of  the  deed.^ 

Where,  in  a  suit  for  specific  performance,  the 
defendant  (optionor)  alleges  that  he  refused  to 
accept  a  tender  of  the  price  because  the  money  was 
not  derived  from  a  certain  source  (proceeds  of  the 
farm  optioned),  he  thereby  estops  himself  to  claim 
the  tender  was  not  good  because  conditional,  in  that 

1  Rohling  V.  Thole,  256  HI  425,  100  N.  E.  138. 

2  Matson  v.  Schofield,  27  Wis.  675;   see  Curtis  L.  &  L.  Co.  v.  Interior 

L.  Co.,  137  Wis.  341,  118  N.  W.  853,  place  of  payment. 

3  Long  V.  Needham,  37  Mont.  408,  96  P.  731. 

4  Zimmerman  v.  Brown,  (N.  J.  Eq.)  36  Atl.  675. 

5  Veith  V.  McMurtry,  26  Neb.  341,  42  N.  W.  6. 


§  847  LAW    OP    OPTION    CONTRACTS  374 

the    optionee    demanded    a    warranty    deed,    not 
authorized  by  the  option.® 

Demand  for  an  abstract  of  title  and  a  suggestion 
that  the  deed  be  delivered,  and  the  purchase  price 
paid,  at  the  lessee's  residence,  does  not  defeat  his 
right  to  specific  performance,  on  the  ground  that 
the  election  was  conditional,  in  a  lease  giving  him 
the  "first  refusal"  to  purchase  the  premises,  where 
the  lessee  during  the  term  sold  the  premises  to  a 
third  person  without  giving  lessee  an  opportunity 
to  purchase.'^ 

Demand  by  an  optionee  of  the  execution  of  the 
deed  by  both  husband  and  wife,  when  the  wife  alone 
is  optionor,  does  not  imply  a  demand  for  a  deed  of 
the  husband,  where  it  does  not  appear  that  the 
optionee  imposed  such  condition  to  his  acceptance, 
but  asked  it  as  a  matter  of  custom  or  form/ 

Where,  after  the  grant  of  an  option  to  purchase 
land  at  a  certain  price  per  acre,  the  optionor  cut 
timber  from  the  land,  a  notice  of  election  with  the 
added  condition  "less  the  loss  in  value  of  the  timber 
occasioned  by  removal"  was  sufficient.® 

When,  by  the  term  of  the  option,  it  was  the  duty 
of  the  optionor  to  prepare  and  present  his  deed  on 
tender  of  the  price,  the  fact  that  the  optionee  ten- 
dered a  deed  to  the  optionor  for  execution  which 

eEankin  v.  Kankin,  216  111.  132,  74  N.  E.  763,  the  facts  show  estoppel; 
the  court  calls  it  waiver. 

7  Harper  v.  Kunner,  85  Neb.  343,  123  N.  W.  313. 

As  to  demand  for  evidence  of  title,  see  Taylor  v.  Newton,  152  Ala.  459, 
44  So.  583. 

8  Gradle  v.  Warner,  140  HI.  123,  29  N.  E.  1118. 

9  McCowen  v.  Pew,  18  Cal.  App.  302,  123  P.  191,  under  CaUfornia  Civil 

Code,  See.  3386. 


375  TIME  OF  ELECTION  §  848 

contained  provisions  not  authorized  by  the  option, 
can  not  avail  the  optionor/" 

An  "acceptance"  is  not  made  conditional  by 
demanding  that  the  optionor  shall  perform  the 
option  agreement  on  his  part/^ 

Where  a  lessee  having  an  option  to  purchase  the 
premises  for  a  specified  sum,  exercised  the  option, 
and  offered  to  pay  the  price,  on  the  lessor  producing 
a  certificate  of  good  title  and  depositing  in  escrow 
a  deed  conveying  good  title,  and  the  lessor  made 
no  objection  to  the  conditions  accompanying  the 
offer  of  payment,  any  objections  were  waived,  and 
the  offer  of  payment  was  sufficient  to  authorize 
specific  performance/^ 

Sec.  848.  TIME  OF  ELECTION.  GENER- 
ALLY.—The  time  limit  on  the  exercise  of  the 
option  right  by  the  optionee,  is  usually,  but  not 
always,  expressly  fixed  by  the  option  contract.'  If 
the  time  limit  is  expressly  fixed  and  the  optionee 
fails  to  exercise  his  right  to  purchase  and  to  give 
notice  to  the  optionor  within  the  time  limit,  his 

10  Consolidated  Coal  Co.  v.  Findley,  128  Iowa  696,  105  N.  W.  206. 

11  Raffety  v.  Schofield,  L.  R.  1  Ch.  937,  66  L.  J.  Oh.  448,  76  L.  T.  Rep. 

(N.  S.)  648,  45  Wk\j.  Rep.  460. 

12  Gates  V.  McNeil,  (Cal.)  147  P.  944. 

Generally:  See  Friendly  v.  Elwert,  57  Ore.  599.  105  P.  404,  112  P. 
1085,  Ann.  Gas.  1913A,  357,  statements  made  with  reference  to  title 
and  deed. 

1  See  Sec.  849,  et  seq. 

Case  where  the  price  was  to  be  fixed  by  the  trustee  of  the  testator 
(optionor),  and  optionee  to  have  one  month  thereafter  to  accept, 
Lilford  V.  Keck,  30  Beav.  295,  54  Eng.  Reprint  902. 

Where  inventory  was  to  be  made.  Baker  v.  Shaw,  68  Wash.  99,  122 
P    611. 


§  848  LAW   OF   OPTION    CONTRACTS  376 

rights  under  the  option  are  at  an  end,^  except  in  a 
few  instances  exhibited  by  decisions  referred  to 
later  on,  in  which  the  courts,  upon  broad  equitable 
grounds,  have  recognized  and  enforced  elections 
made  and  notices  given  after  the  expiration  of  the 
contract  time.^ 

If  the  option  contract  does  not  expressly  fix  its 
time  limit  the  law  fixes  a  reasonable  time,^  and, 
therefore,  it  is  not  void  for  uncertainty,^  nor  does 
it  offend  the  rule  against  perpetuities.* 

Speaking  generally,  it  is  the  rule  that  the 
optionee  is  held  to  a  strict  performance  of  the 
option  contract,  time  of  election  being  the  essence 
of  such  contracts  whether  or  not  expressly  so  pro- 
vided therein.'^  Again,  the  option  contract  may  be 
so  worded  as  to  require  payment  or  tender  of  the 
whole  or  some  part  of  the  price  at  the  time  of  elec- 
tion.^ In  such  case  timely  payment  or  tender  is  as 

2Cummings  v.  Town  Lake  Realty  Co.,  86  Wis.  382,  57  N.  W.  43;  Potts 
V.  Whitehead,  21  N.  J.  Eq.  55,  affirmed  23  N.  J.  Eq.  512 ;  Britton  v, 
Phillips,  24  How.  Pr.  (N.  Y.)  Ill;  McConkey  v.  Peach  Bottom  Slate 
Co.,  68  Fed.  830,  16  C.  C.  A.  8,  affirmed  161  U.  S.  500,  40  L.  Ed. 
786,  16  S.  Ct.  640. 
Time  of  election  fixed  by  happening  of  contingency,  Hill  v.  Mathews, 
78  Mich.  377,  44  N.  W.  286;  Maetier's  Adm'rs  v.  Frith,  6  Wend. 
(N.  Y.)  103,  21  Am.  Dec.  262. 
When  election  and  withdrawal  are  simultaneous,  see  Sec.  704,  note  9. 

3  But  as  a  rule  only  because  of  the  inequitable  act,  default  or  fraud  of 

the  optionor.  See  Steele  v.  Bond,  32  Minn.  14,  18  N.  W.  830,  or 
because  of  accident,  etc.,  see  Sec.  864.  See  also  decisions  in  Sec. 
867,  et  seq. 

4  Sec.  856. 
6  Sec.  222, 

6  Sec.  222. 

7  Sec.  862. 

8  Sec.  916;  Pollock  v.  Brookover,  60  W.  Va.  75,  53  S.  E.  795,  6  L.  R.  A. 

(N.  S.)  403;  Killough  v.  Lee,  2  Tex.  Civ.  App.  260,  21  S.  W.  970. 


377  ELECTION — SPECIFIED  TIME  §  849 

much  a  necessary  part  of  the  election  as  notice, 
unless  the  conduct  of  the  optionor  has  been  such  as 
to  excuse  or  waive  payment  or  tender.® 

Sec.  849.  SPECIFIED  TIME.  GENERALLY. 
— Where,  by  the  terms  of  the  option  contract,  the 
time  of  election  is  expressly  limited,  an  election 
after  the  expiration  of  that  time  will  not,  as  we  have 
seen,  raise  a  binding  contract.  In  other  words,  to 
raise  a  binding  promise  on  the  part  of  the  optionor 
to  sell,  the  election  must  be  made  within  the  time 
stipulated  in  the  option. 

The  option  privilege  is  withdrawn  by  expiration 
of  the  time  limit  where  there  is  no  election.^  No 
rights  can  accrue  to  the  optionee  by  an  election 
after  the  time  limit  has  expired.^ 

9  Sees.  920,  923. 

1  Notice  is  not  necessary  to  terminate.   See  Sec.  707,  note  3. 

2Raynier  v.  Hobbs,  (Cal.  App.)  146  P.  906;  Patterson  v.  Farmington 
St.  Ry.  Co.,  76  Conn.  628,  57  Atl.  853 ;  Finn  v.  Bowden,  66  Fla.  41, 
63  So.  139;  Lamed  v.  Wentworth,  114  Ga.  208,  39  S.  E.  855;  Spafford 
T.  Hedges,  231  HI.  140,  83  N.  E.  129;  Bashor  v.  Cady,  2  Ind.  582; 
Peterson  v.  Eankin,  161  Iowa  431,  143  N.  W.  418;  Frey  v.  Camp,  131 
Iowa  109,  107  N.  W.  1106;  Jennings  etc.  Syndicate  v.  Oil  Co.,  119  La. 
793,  44  So.  481;  Bennett  v.  Giles,  220  El.  393,  77  N.  E.  214;  Cameron 
V.  Shumway,  149  Mich.  634,  113  N.  W.  287,  extension;  Anderson 
Carriage  Co.  v.  Gilmore,  129  Mo.  App.  644,  108  S.  W.  594;  Levin 
V.  Dietz,  194  N.  Y.  376,  87  N.  E.  454,  20  L.  R.  A.  (N.  S.)  251; 
Atlantic  Product  Co.  v.  Dunn,  142  N.  C.  471,  55  S.  E.  299 ;  Herman 
V.  Winter,  20  S.  D.  196,  105  N.  W.  457;  Longworth  v.  Mitchell,  26 
Ohio  St.  334;  Kingsley  v.  Kressly,  60  Ore.  167,  118  P.  678,  Ann.  Cas. 
1913E,  746;  Witherspoon  v.  Staley,  (Tex.  Civ.  App.)  156  S.  W.  557; 
I.  X.  L.  etc.  House  v.  Berets,  32  Utah  454,  91  P.  279;  Pollock  v. 
Brookover,  60  W.  Va.  75,  53  S.  E.  795,  6  L.  R.  A.  (N.  S.)  403;  Fulton 
v.  Messenger,  61  W.  Va.  477,  56  S.  E.  830 ;  Nelson  v.  Stephens,  107 
Wis.  136,  82  N.  W.  163 ;  Waterman  v.  Banks,  144  U.  S.  394,  36  L.  Ed. 
479,  12  S.  Ct.  646;  Guss  v.  Nelson,  200  U.  S.  298,  50  L.  Ed.  489,  26  S. 


§  849  LAW   OP    OPTION    CONTRACTS  378 

These  general  statements  are  taken  from  numer- 
ous decisions  cited  in  the  note,  and  will  find  support 
in  them  and  in  many  others  cited  throughout  this 
book.^ 

The  law  of  waiver,  however,  applies  to  the  timeli- 
ness of  the  notice,  and  the  law  of  estoppel  may  also 
be  invoked  where  the  conduct  of  the  optionor  justi- 
fies its  application.  These  subjects  will  be  found 
discussed  elsewhere.* 

It  should  be  remembered  that  the  rules  stated  are 
those  with  reference  to  the  ordinary  option  to  pur- 
chase property.  Where  the  option  is  one  of  sale 
and  return,  or  sale  on  approval,  failure  to  exercise 
the  option  within  the  specified  time,  depending  of 

Ct.  260,  affirmed  s.  e.  14  Okl.  296,  78  P.  170,  sale  or  return;  Vanderlip 
V.  Peterson,  16  Manitoba  341 ;  Eanelagh  v.  Melton,  34  L.  J.  Cli.  227, 
11  L.  T.  Eep.  409,  62  Eng.  Eeprint  627;  Barrell  v.  Sabine,  1  Vern. 
268,  23  Eng.  Reprint  462;  Master  v.  Willoiigliby,  2  Bro.  P.  C.  244, 
1  Eng.  Reprint  919;  Brooke  v.  Garrod,  3  Kay.  &  J.  608,  69  Eng.  Re- 
print 1252. 

2  A  proviso  in  an  option  fixing  a  time  limit  that  if  payment  is  not  timely 

made  the  optionor  may  cancel  it,  does  not  change  the  rule,  Paterson 
V.  Houghton,  49  Manitoba  168 ;  see  Peirson  v.  Corporation,  11 
Brit.  Col.  139. 
The  rule  applies  to  the  hour  fixed  as  well  as  to  the  day,  Olsen  v. 
Northern  S.  S.  Co.,  70  Wash.  493,  127  P.  112;  Shinn  v.  Roberts,  20 
N.  J.  L.  435,  43  Am.  Dec.  636. 

3  Where  an  offer  by  letter  expressly  requires  answer  by  ' '  return  mail, ' ' 

an  acceptance  by  return  mail  is  necessary  to  raise  a  binding  contract, 
Taylor  v.  Rennie,  35  Barb.  (N.  Y.)  272,  22  How.  Pr.  101;  Ackerman 
V.  Maddux,  26  N.  D.  50,  143  N.  W.  147;  see  Bernard  v.  Torrance, 
5  Gill.  &  J.  (Md.)  383;  Maclay  v.  Harvey,  90  HI.  525,  32  Am.  Rep. 
35 ;  Home  v.  Niver,  168  Mass.  4,  46  N.  E.  393. 
An  offer  by  telegram  impliedly  requires  a  "quick"  reply,  Thompson 
V.  Burns,  15  Idaho  572,  99  P.  Ill;  Ferguson  v.  West  Coast  Shingle 
Co.,  96  Ark.  27,  130  S.  W.  527,  delay  of  four  days. 

4  Sec.  868. 


379  ELECTION — SPECIFIED  TIME  §  850 

course  on  the  terms  of  the  contract,  is  deemed  an 
election  to  purchase.^ 

Sec.  850.  SPECIFIED  TIME.  CONSTRUC- 
TION. GENEEALLY.— In  computation  of  time, 
fraction  of  day  is  not  reckoned,  and  when  the  act 
required  by  contract  is  to  be  done  within  a  specified 
time,  or  after  a  particular  day,  the  general  rule  is 
to  exclude  the  first  and  include  the  last  day  of  the 
specified  term.^ 

The  optionee  has  until  midnight  of  the  last  day 
of  the  option  time  within  which  to  elect  and  give 
notice.^  Saturday  half  holiday  must  be  counted  as 
a  day  in  computing  the  time  within  which  a  tenant 
may  give  notice  to  renew  his  lease;  the  rule  de 
minimis  does  not  apply.^  When  the  time  to  elect 
and  give  notice  falls  on  Sunday,  an  election  on  the 
following  Monday  is  sufficient.^  But  under  the 
statute  of  New  York,  when  the  option  expires  on  a 
holiday,  (January  1st)  which  was  not  Sunday,  the 
time  for  election  was  not  extended  until  the  next 
business  day.° 

5  See  Sees.  828-830.    As  to  renewals  and  extensions  of  leases,  see  Sees. 
831-836. 

When  party  has  option  of  two  or  more  ways  of  performing,  he  must 
make  election  before  time  expires  or  he  loses  his  right  to  eleet, 
Mueller  v.  Pels,  94  Dl.  App.  353,  affirmed  192  HI.  76,  61  N.  E.  472. 
See  Alternative  Stipulation,  Sec.  854. 

1  Tilton  V.  Sterling  C.  Co.,  28  Utah  173,  77  P.  758,  107  A.  S.  R.  689. 

2  Veith  V.  McMurtry,  26  Neb.  341,  42  N.  W.  6. 

3  Jackson  Brewing  Co.  v.  Wagner,  117  La.  875,  42  So.  356. 

4  Smith  V.  Russell,  20  Colo.  App.  554,  80  P.  474. 

5  Page  V.  Shainwald,  169  N.  Y.  246,  62  N.  E.  356,  option  to  return  stock. 


§  850  LAW  OF  OPTION  CONTRACTS  380 

Under  an  option  to  extend  20  days  from  Febru- 
ary 3rd,  the  optionor  has  the  whole  of  February 
23rd,  within  which  to  give  notice  of  election.* 

An  option  dated  February  7th,  providing  that  if 
''no  written  offer  was  received  that  day  by  mail 
the  deal  to  be  closed  by  Feb.  8th,"  includes  the 
latter  day."^  When  the  option  time  runs  "until"  a 
certain  day,  an  election  on  that  day  is  in  time.^ 

An  option  to  deliver  stock  "on  or  after  three 
months  from  Nov.  6,  1891,"  expired  before  April, 
1896.« 

A  lease  bore  date  March  24,  '82,  and  provided 
that  the  lessee  should  hold  the  premises  for  twenty 
years  and  two  months  from  March  1,  1882,  paying 
certain  rents,  and  also  that  the  lessee  should  have 
the  privilege  of  buying  the  premises  at  any  time 
"within  five  years  commencing  from  this  demise," 
and  it  was  held  the  period  of  five  years,  within 
which  the  option  could  be  exercised,  expired  March 
1,  1887.^*^    ■ 

Under  an  option  by  which  the  optionor  agreed  to 
convey  coal,  within  eighteen  months  from  date,  and 
the  optionee  agreed  to  pay  one-third  of  the  price,  in 
nine   months,    and   the   balance   within   eighteen 

6  Holmes  v.  Myles,  141  Ala.  401,  37  So.  588. 

7  U.  B.  Blalock  &  Co.  v.  W.  D.  Clark  &  Bro.,  133  N.  C.  306,  45  S.  E.  642. 

8  Houghwout  V.  Boisaubin,  18  N.  J.  Eq.  315. 

9  McCracken  v.  Harned,  66  N.  J.  L,  37,  48  Atl.  513. 

* '  By  the  first  day  of  August, ' '  means  on  or  before  August  first,  Parker 
V.  McAllister,  14  Ind.  12. 

10  Lorillard  v.  Company,  48  N.  J.  Eq.  295,  22  Atl.  203,  affirming  s.  c. 
19  Atl.  381. 


381  ELECTION — SPECIFIED  TIME  §  851 

months  from  date,  the  optionee  must  exercise  his 
option  within  the  nine  months/^ 

An  option  to  purchase  contained  in  a  lease  for 
ten  years,  stipulating  that,  in  case  the  lessee  shall 
not  exercise  his  option  to  purchase,  within  two 
years  from  the  date  of  the  lease,  ''then"  the  right 
to  purchase  shall  absolutely  determine,  except  that 
he,  after  having  paid  the  rent  for  the  term,  shall 
''then"  have  the  right  and  option  to  purchase  for 
a  specified  price,  need  not  be  exercised  at  the  time 
of  the  last  payment  of  rent,  but  may  be  exercised 
at  the  expiration  of  the  term ;  for  the  word  "then" 
is  used  in  the  sense  of  "in  the  event  of,"  or  "in 
such  case."^^ 

Sec.  851.  SPECIFIED  TIME.  CONSTRUC- 
TION.   "EXPIRATION"    CLAUSES.— An 

option  contract  stipulated  that ' '  on  payment  of  $50 
on  or  before  May  1st  next  (1895)  the  option  would 
be  extended  until  May  1st,  1896.  On  receipt  of  seven 
days'  notice  in  writing  at  any  time  before  expira- 
tion of  this  option,"  the  optionor  will  execute 
warranty  deeds.  The  $50  was  duly  paid  and  notice 
of  election  to  purchase  was  given  April  30,  1896, 
and  it  was  held  the  notice  of  election  was  given  in 
time  as  it  was  not  necessary  to  give  it  seven  days 
before  the  expiration  of  the  option.^ 

11  Weaver  v.  Sides,  216  Pa.  301,  65  Atl.  666. 

12  Gates  V.  McNeil,  (Cal.)   147  P.  944. 

1  Guyer  v.  Warren,  175  HI.  328,  51  N.  E.  580,  holding  the  seven  days ' 
notice  had  nothing  to  do  with  the  option;  the  giving  of  the  notice 
was  the  method  of  exercising  the  option  and  the  day  of  giving  the 
notice  was  the  time  of  exercising  the  option. 


§  852  LAW   OF   OPTION    CONTRACTS  382 

An  ordinance  granting  a  water  works  franchise 
provided,  that,  at  any  time  after  the  expiration  of 
fifteen  years  from  the  completion  of  the  plant,  the 
city  should  have  the  right  to  purchase  the  same  by 
giving  the  owners  one  year's  notice  in  writing.  The 
franchise  grant  was  for  fifty  years,  and  it  was  held 
the  city  was  not  compelled  to  wait  the  expiration 
of  the  fifteen  year  period  before  serving  notice,  but 
could  serve  it  one  year  before  the  period  expired.^ 

The  same  ruling  was  made  where  the  seller 
agreed  to  repurchase,  if  the  buyer  wished  to  sell, 
provided  the  seller  was  given  30  days'  notice  in 
writing  of  such  wish,  the  court  holding  the  buyer 
had  to  and  including  the  last  day  of  the  time  to  .loive 
the  30  days'  notice.* 

Under  an  agreement  to  sell  land  giving  the  pur- 
chaser 10  days  in  which  to  investigate  the  title  and 
to  a  return  of  the  earnest  money  if  the  title  was 
defective,  failure  to  elect  within  the  limit  of  the  10 
days,  will  bar  a  suit  for  specific  performance  where 
the  title  was  regular.* 

Sec.  852.  SAME.  LEASES  AND  RENEW- 
ALS.— With  reference  to  options  to  purchase  in 

2  Valparaiso  City  Water  Co.  v.  City,  33  Ind.  App.  193,  69  N.  E.  1018. 
Agreement  construed  and  held  to  give  the  City  the  option  to  purchase 

after  the   appraisal   of  the  value  of  the  water  plant,   Farmington 

Village  Corp.  v.  Farmington  Water  Co.,  93   Me.  192,  44  Atl.  609; 

distinguishing  Montgomery  Gaslight  Co.  v.  City,  87  Ala.  245,  6  So. 

113,  4  L.  R.  A.  616. 
In  Marino  v.  Williams,  30  Nev.  360,  96  P.  1073,  the  lessee  was  held 

entitled  to  wait  until  after  the  appraisal  of  the  rent  for  the  renewed 

term  to  exercise  his  option  to  renew. 

3Maguire  v.  Halstead,  45  N.  Y.  S.  783,  18  App.  Div.  228. 
4  Hollmann  v.  Conlon,  143  Mo.  369,  45  S.  W.  275. 


383  ELECTION — SPECIFIED   TIME  §  852 

leases,  the  general  rule  seems  to  be  that  the  notice 
must  be  given  within  the  stipulated  time  before  the 
expiration  of  the  term  of  the  lease.  Thus,  a  lessee 
was  to  have  the  privilege  of  purchasing  the  fee,  at 
a  fixed  price,  at  any  time  within  five  years,  upon 
giving  thirty  days'  notice  of  his  intention,  and 
paying  one-fourth  of  the  purchase  money,  and  it 
was  held  that  notice  given  two  days  before  the 
expiration  of  the  five  years  was  too  late/ 

The  decisions,  however,  are  not  in  harmony  as  to 
the  construction  of  particular  clauses.  Thus,  a  lease 
gave  a  lessee  the  privilege  of  purchasing  the  land 
''at  the  expiration"  of  the  lease,  which  was  twelve 
o'clock  on  the  night  of  December  31st,  and  it  was 
held  the  lessee  had  the  following  day  within  which 
to  elect. ^  Where  the  option  grants  the  privilege  of 
purchasing  at  any  time  during  the  "term,"  the 
optionee  is  not  limited  to  an  exercise  of  the  privi- 
lege at  the  end  of  the  term,  but  may  do  so  at  any 
time  during  the  term  of  the  lease.^ 

Another  rule  with  reference  to  leases  is  that 
where  the  option  gives  the  lessee  the  right  to  pur- 
chase at  any  time  during  the  continuance  or  term 
of  the  lease,  the  right  must  be  exercised  during  the 

1  Mason  v.  Payne,  47  Mo.  517,  the  court  ruling  the  notice  clause  was  of 

the  essence  of  the  contract;  also  Magoffiji  v.  Holt,  62  Ky.  (1.  Duv.) 
95;  see  also,  Carter  v.  Phillips,  144  Mass.  100,  10  N.  E.  500,  as  to 
time  being  of  essence  of  contract;   and,  also.  Sec.  862. 

2  Herman  v.  Winter,  20  S.  D.   196,   105  N.  W.  457;    Gray  v.   Maier  & 

Zobelein  Brewery,  2  Cal.  App.  653,  84  P.  280;  Contra,  I.  X.  L.  etc. 
House  V.  Berets,  32  Utah  454,  91  P.  279;  Tilton  v.  Sterling  C.  & 
C.  Co.,  28  Utah  173,  77  P.  758,  107  A.  S.  E.  689. 

3  Lee  V.  Cochran,  157  Ala.  311,  47  So.  581;  Anderson  v.  Anderson,  251  HI. 

415,  96  N.  E.  265,  Ann.  Cas.  1912C,  556,  the  lease  gave  an  option  to 
purchase  ' '  at  any  time ' '  and  was  construed  as  requiring  the  election 
during  the  term. 


§  853  LAW    OF    OPTION    CONTRACTS  384 

life  of  the  lease.    Consequently  an  election  made 
after  the  expiration  of  the  term  is  not  in  time."* 

The  same  rule  obtains  where  the  option  is  one  to 
renew  the  lease.  Thus,  a  lease  granting  the  privi- 
lege of  renewal  "at  the  expiration  of  the  term/' 
binds  the  lessee  to  elect  at  a  point  of  time  at  or 
before  the  old  lease  expired.^  And  it  is  likewise  in 
an  option  to  renew  an  agreement  for  the  purchase 
and  delivery  of  salt;^  or  for  the  renewal  of  an 
agreement  to  furnish  electric  current.'^ 

Sec.  853.  SAME.  OPTION  TO  SELL  OE 
REPURCHASE.— Under  the  option  of  resale  the 
seller  is  not  obligated  to  repurchase  until  after  the 
expiration  of  the  stipulated  time.  Consequently, 
where  the  option  provided  that  if  the  purchaser 

4  Atlantic  Product  Co.  v.  Dunn,  142  N.  C.  471,  55  S.  E.  299,  citing  Alston 

V.  Connell,  140  N.  C.  485,  53  S.  E.  292,  and  holding  that  tender  of 
rent  after  expiration  of  lease  did  not  restore  lessee's  rights,  nor  did 
the  fact  that  the  lessee  had  made  improvements. 
Of  course  this  rule  does  not  apply,  where  the  option  is  made  to  run 
after  the  expiration  of  the  lease  term,  Prout  v.  Eobj,  15  Wall.  (U. 
S.)  471,  21  L.  Ed.  58,  or  where  the  lease  provides  for  a  renewal  and 
gives  an  option  to  purchase  ' '  at  any  time  during  the  tenancy. ' '  In 
such  case  if  there  is  a  renewal,  an  election  to  purchase  during  the 
renewal  period  is  good.  Congregation  etc.  v.  Gerbert,  57  N.  J.  L.  395, 
31   Atl.   383. 

5  I.  X.  L.  etc.  House  v.  Berets,  32  Utah,  454,  91  P.  279,  281 ;  see  Shamp 

V.  White,  106  Cal.  220,  39  P.  537 ;  Darling  v.  Hoban,  53  Mich.  599, 
19  N.  W.  545;  Eenoud  v.  Daskam,  34  Conn.  512;  Thiebaud  v.  First 
Nat'l  Bank,  42  Ind.  212;  Moss  v.  Barton,  L.  R.  1  Eq.  474,  35 
Beav.  197,  13  L.  T.  Rep.  (N.  S.)  623,  55  Eng.  Reprint  570;  Hersey 
V.  Giblett,  18  Beav.  174,  23  L.  J.  Ch.  818,  52  Eng.  Reprint  69. 

6  San  Pedro  Salt  Co.  v.  Hauser  Packing  Co.,  13  Cal.  App.  1,  108  P.  728, 

the  court  saying  there  is  no  contract  to  ' '  renew ' '  after  the  expiration 
of  the  old  one. 

7  Monmouth  Co.  El.  Co.  v.  Consolidated  Gas  Co.,  83  N.  J.  L.  53,  83 

Atl.  900. 


385  ELECTION — SPECIFIED  TIME  §  853 

should  become  dissatisfied  with  the  stock,  the  seller 
would,  at  the  expiration  of  six  months  from  date  of 
sale,  repurchase  the  same,  the  option  is  not  enforce- 
able until  after  the  expiration  of  the  specified 
period,  and  an  election  to  resell  the  day  before  the 
expiration  of  the  time,  is  premature/ 

The  rule  of  the  Montana  decisions  just  cited  is 
probably  too  broadly  stated.  The  court  probably 
intended  to  hold  only  that  under  the  agreement 
there  in  question,  the  obligation  of  the  seller  to 
repurchase  did  not  arise  until  after  the  expiration 
of  the  time  limit,  but  it  is  not  apparent  why  the 
buyer  could  not,  at  any  time  before  the  expiration 
of  the  time  limit,  exercise  his  option  to  resell  and 
give  notice.  Exercising  the  option  and  enforcing 
rights  thereunder  are  clearly  different  and  distinct 
matters,  in  the  absence  of  an  express  provision 
limiting  the  time  of  giving  notice  as  concurrent 
with  the  expiration  of  the  option  time.  Thus,  it  is 
held  in  California,  that  an  agreement  providing 
that  if  the  vendee  should  be  dissatisfied  with  the 
land  at  the  end  of  the  year,  and  should  give  the 
vendor  thirty  days'  notice  and  a  release  of  title, 
the  latter  would  return  the  price  paid  with  inter- 
est, a  notice  of  dissatisfaction  with  offer  of  release 
given  and  tendered  seventy-eight  days  before  the 
expiration  of  the  year  is  good.^ 

It  is  generally  held  of  options  like  those  under 

1  Porter  v.  Plymouth  Gold  M.  Co.,  29  Mont.  347,  74  P.  938,  101  A.  S.  E. 
569;  also,  Schultz  v.  O'Rourke,  18  Mont.  418,  4.5  P.  634. 
It  is  otherwise  where  the  option  is  to  repurchase  "on  or  before  12 
months  from  date,"  Scott  v.  Goodin,  21  Cal.  App.  178,  131  P.  76. 

2Herberger  v.  Husman,  90  Cal.  583,  27  P.  428;  also,  Union  Coll.  Co.  v. 
Oliver,  23  Cal.  App.  318,  137  P.  1082,  guaranty  to  refund  "in  12 
months  from   date. ' ' 
25 — Option  Contracts. 


§  854  LAW    OF    OPTION    CONTRACTS  386 

consideration,  that  the  time  for  the  exercise  of  the 
option  arises  upon  the  date  fixed  and  may  be  exer- 
cised within  a  reasonable  time  thereafter.^ 

Under  an  option  to  re-purchase  ''at  the  expira- 
tion of  three  years,"  the  time  to  elect  and  give  the 
required  thirty  days'  notice  is  within  a  reasonable 
time  after  the  expiration  of  the  three  years.* 

Sec.  854.  ALTERNATIVE  STIPULATIONS. 
— Where  the  contract  is  in  the  alternative,  the 
party  bound  must  make  his  election  on  the  day  the 
promise  is  to  be  performed,^  and  if  he  fails  to  do 
so,  he  loses  his  election  and  the  promisee  may  elect 
which  alternative  he  will  demand.^  And  when  the 
election  is  with  the  promisee  under  a  covenant  to 
pay  a  certain  sum  of  money  on  a  certain  day,  or 
return  a  certain  bond,  and  the  promisee  does  not 
elect  on  or  before  such  day,  the  obligation  to  pay 
the  money  becomes  absolute.^ 

3  See  Sec.  858;  Hollis  v.  Libby,  101  Me.  302,  64  Atl.  621,  holding  one 

year  and  eight  months  after  the  time  fixed  is  not  reasonable;  except 
under  special  circumstances,  Moench  v.  Hower,  137  Iowa  621,  115 
N.  W.  229. 

4  Rogers  v.  Burr,  97  Ga.  10,  25  S.  E.  339,  s.  c.  105  Ga.  432,  31  S.  E. 

438,  70  A.  S.  R.  50.  The  Supreme  Court  of  Utah  in  Tilton  v.  Sterling 
C.  &  C.  Co.,  28  Utah  173,  77  P.  758,  107  A.  S.  R.  689,  says  this 
decision  is  incorrect  and  refused  to  apply  it  to  an  option  to  purchase 
the  property  "at  the  expiration"  of  the  lease  and  holding  that  "at 
the  expiration ' '  means  the  day  the  lease  expired. 

iRewrick  v.  Goldstone,  48  Cal.  554;   Center  v.  Center,   38  N.   H.   318; 
Marshall  v.  Ferguson,  23  Cal.  65. 

2McNitt  V.  Clark,  7  Johns.   (N.  Y.)  465;  Haskins  v.  Bern,  19  Utah  89, 
56  P.  953;   Growl  v.  Goodenberger,  112  Mich.  683,  71  N.  W.  485. 

s  Ramsey  v.  Walthan,  1  Mo.  395. 

Choice  V.  Moseley,  1  Bailey  (S.  C.)  136,  19  Am.  Dec.  661,  holding 
failure  to  perform  either  stipulation  is  breach  by  the  promisor  where 
the  election  is  with  him. 


387  ELECTION — SPECIFIED  TIME  §  855 

Defendant  contracted  with  plaintiff  and  other 
stockholders  of  a  corporation  to  cause  to  be 
returned  to  them  their  notes  given  for  stock,  on 
surrender  of  certificates  for  the  stock  and  relin- 
quishment of  all  claims  against  the  corporation. 
Plaintiff,  a  stockholder,  was  not  a  party  to  the 
original  agreement,  but  learning  of  the  agreement, 
was  told  he  was  entitled  to  the  benefit  of  it,  but 
delayed  for  a  year  after  he  knew  he  was  entitled  to 
such  benefit,  and  after  defendant  had  secured  his 
notes  and  it  was  held  that  plaintiff's  failure  to  elect, 
within  a  reasonable  time  to  accept  the  benefits  of 
the  agreement,  barred  any  rights  he  might  have 
under  the  agreement.* 

Sec.  855.  CLAUSE  RESERVINa  TO  OP- 
TIONOR  RIGHT  TO  SELL.— An  option  to 
renew  a  lease,  provided  the  premises  are  not  dis- 
posed of  before  the  expiration  of  the  leased  term, 
is  terminated  by  a  conveyance  made  in  good  faith 
by  way  of  advancement  and,  of  course,  an  election 
made  after  that  event  is  too  late,'  but  the  optionee 
in  a  lease  giving  the  lessees  the  "first  refusal,"  at  a 
certain  price,  at  any  time  they  wish  to  do  so, 
requires  the  lessor,  if  he  desires  to  sell  the  premises, 
to  give  notice  thereof  to  the  lessees  and  if  they 
refuse  to  purchase,  the  lessor  may  then  sell  to 
others  at  any  price  he  sees  fit,  but  that  until  such 
notice  is  given,  the  lessees  have  the  option  to  pur- 
chase at  any  time  during  the  existence  of  the  lease.^ 

4  Libbey  v.  Packwood,  11  Wash.  176,  39  P.  444. 

1  Elston  V.  SchiUing,  42  N.  Y.  79. 

2  Schroeder  v.  Gemeinder,  10  Nev.  355 ;  see,  Bettens  v.  Hoover,  12  Cal. 

App.  313,  107  P.  329;  Cummings  v.  Nielson,  42  Utah  157,  129  P.  619. 


§  855  LAW  OF  OPTION  CONTRACTS  388 

Under  an  option  whereby  the  lessor  agreed  that 
it  would  give  the  lessee  the  opportunity  to  pur- 
chase, the  lessor  on  deciding  to  sell  was  merely 
bound  to  notify  the  lessee  and  to  give  him  an  oppor- 
tunity to  buy  upon  the  terms  fixed  by  the  lessor.^ 
But  upon  a  sale  of  the  property  in  partition  pro- 
ceedings caused  by  the  optionors,  the  option  became 
enforceable  by  the  optionee,  though  the  option 
provided  that  the  optionors  would  not  sell  the  prop- 
erty without  first  notifying  the  optionee  of  their 
intention  to  sell,  as  the  proceedings  were  a  mani- 
festation of  their  intention  to  sell.* 

A  lease  of  a  store  **to  hold  for  the  term  of  three 
years,"  with  the  privilege  of  "two  years  in  addition 
unless  the  (lessor)  shall  sell  said  store,  in  which 
case  the  privilege  of  two  years  in  addition  shall  be 
null  and  void,"  becomes  null  and  void  and  the 
privilege  also  becomes  void  in  case  of  a  sale  by  the 
lessor  either  before  the  beginning  or  during  the 
running  of  the  two  years.^ 

An  owner  of  slaves  agreed  to  sell  the  residue  of 
■them  after  selecting  three  for  himself  and  subse- 
quently he  sold  three  of  the  slaves,  and  it  was  held 
thereby  he  elected  to  sell  the  residue.® 

2  The  time  within  which  to  elect  does  not  run  until  optionee  is  notified 

that  the  option  had  been  awarded  to  him  as  one  of  several  successive 
optionees  under  his  father 's  will,  Austin  v.  Tawney,  L.  R.  2  Ch.  143. 

3  Chandler  &  Co.  v.  McDonald- Weber  Co.,"  215  Mass.  365,  102  N.  E.  319. 

4  Myers  v.  Metzger,  61  N.  J.  Eq.  522,  48  Atl.   1113,  reversed  on  other 

grounds,  63  N.  J.  Eq.  779,  52  Atl.  274* 

6  Knowles  v.  Hull,  97  Mass.  206. 
6  Arnold  v.  Arnold,  17  N.  C.  467. 


389  ELECTION — REASONABLE  TIME  §  856 

Sec.  856.  REASONABLE  TIME.  GENER- 
ALLY.— A  bare  offer  without  time  limit  is  ordi- 
narily held  to  be  withdrawn  if  not  accepted 
immediately.  This  is  undoubtedly  true  in  those 
cases  where  the  parties  are  personally  present  and 
the  circumstances  are  such  as  to  imply  an  imme- 
diate acceptance.^  The  nature  of  an  option  contract, 
in  the  absence  of  any  restricting  stipulations, 
implies  that  the  optionee  shall  have  a  reasonable 
time  to  elect,  and,  therefore,  the  rule  is  that  where 
the  option  contract  does  not  expressly  fix  the  time 
which  the  option  privilege  is  to  run,  the  law  fixes 
a  reasonable  time,  and,  of  course,  the  election  must 
be  made  within  such  time.^ 

Whether  what  is  a  reasonable  time  in  a  particu- 
lar case  is  a  question  of  law  to  be  decided  by  the 
court,  or  a  question  of  fact  to  be  found  by  the  jury, 

1  Patterson  v.  Farmington  St.  Ey.  Co.,  76  Conn.  628,  51  Atl.  853,  858; 

Longworth  v.  Mitchell,  26  Ohio  St.  334. 

2  Vassault  v.  Edwards,  43  Cal.  458 ;  Fitzpatrick  v.  Woodruff,  96  N.  Y. 

561;  Viser  v.  Rice,  33  Tex.  139;  Larmon  v.  Jordan,  56  HI.  204; 
New  England  Box  Co.  v.  Prentiss,  75  N.  H.  246,  72  Atl.  826 ;  Bowen 
V.  McCarthy,  85  Mich.  26,  48  N.  W.  155;  Eaves  &  Collins  v.  Iron 
Co.,  73  Ga.  459;  Topping  v.  Root,  5  Cow.  (N.  Y.)  404;  Minn.  etc. 
Ey.  Co.  V.  Columbus  etc.  Co.,  119  U.  S.  149,  30  L.  Ed.  376,  7  S.  Ct. 
168;  Mossie  v.  Cyrus,  61  Ore.  17,  119  P.  485;  Hanley  v.  Watterson, 
39  W.  Va.  214,  19  S.  E.  536 ;  Brooks  v.  Trustee  Co.,  76  Wash.  589, 
136  P.  1152;  Cummings  v.  Nielsen,  42  Utah  157,  129  P.  619,  stock; 
Heydrick  v.  Dickey,  154  Ky.  475,  157  S.  W.  915,  159  S.  W.  666. 
An  offer  to  sell  real  estate  made  by  telegram  requires  an  answer  within 
the  time  specified,  and  if  no  time  is  specified,  then  within  a  reason- 
able time,  and  impliedly  a  quick  reply  by  telegram,  Thompson  v. 
Burns,  15  Idaho  572,  99  P.  111. 

As  to  propositions  by  mail,  James  E.  Mitchell  &  Co.  v.  Wallace,  27  Ky. 
L.  Rep.  967,  87  S.  W.  303. 

As  to  renewals  of  leases,  see  Sec.  852. 

As  to  option  to  return,  etc.,  see  See.  853,  858. 

As  to  extensions,  see  Sec.  859. 


§  857  LAW  OF  OPTION  CONTRACTS  390 

is  a  subject  involved  in  much  judicial  conflict.'  It 
is  believed,  however,  that  when  the  question  of 
reasonableness  of  time  can  be  decided  by  the  court 
without  passing  on  the  facts,  it  is  a  question  of  law 
for  the  court.  Otherwise  it  is  a  question  of  fact  to 
be  submitted  to  the  jury."* 

Parol  evidence  is  not  admissible  to  show  that  at 
the  time  the  option  was  executed  the  parties  under- 
stood or  agreed  that  it  was  to  remain  open  for  any 
specified  time,  nor  to  prove  their  understanding  as 
to  what  would  be  a  reasonable  time.^  Nor,  may  a 
suit  for  specific  performance  be  resisted  on  the 
ground  that  the  option  was  not  fair  because  not 
limited  in  time.^ 

Sec.  857.  REASONABLE  TIME.  CON- 
STRUCTION.— What  is  a  reasonable  time  where 
the  option  is  silent,  is  to  be  determined  from  all 

3  Brooks  V.  Trustee  Co.,  76  Wash.  589,  136  P.  1152,  law;  Morse  v.  Bellows, 

7  N.  H.  549,  28  Am.  Dec.  372,  law;  Loeb  v.  Stern,  198  HI.  371, 
64  N.  E.  1043,  law;  Stone  v.  Harmon,  31  Minn.  512,  19  N.  W.  88; 
standard  Box  Co.  v.  Mut.  Biscuit  Co.,  10  Cal.  App.  746,  103  P.  938, 
law;  Smith  v.  Bangham,  156  Cal.  359,  104  P.  689,  28  L.  K.  A.  (N.  S.) 
522,  question  of  fact ;  Elliott  v.  DeLaney,  217  Mo.  14,  116  S.  W.  494, 
question  of  fact;  U.  B.  Blalock  &  Co.  v.  W.  D.  Clark  &  Bro.,  133  N.  C. 
306,  45  S.  E.  642,  question  of  fact;  Moxley'a  Administrators  v. 
Moxley,  59  Ky.  309. 

4  Brooks  V.  Miller,  103  Ga.  712,  30  S.  E.  630 ;  note  to  17  Am.  Dec.  544. 
»  Stone  V.  Harmon,  31  Minn.  512,  19  N.  W.  88. 

Standard  Box  Co.  v.  Mut.  Biscuit  Co.,  10  Cal.  App.  746,  103  P.  938, 
term  implied  by  law  comes  within  rule. 

6  Cummings  v.  Nielson,  42  Utah  157,  129  P.  619. 

Case  where  price  for  mine  was  made  payable  out  of  the  gross  output; 

proper   to    plead    what    is    reasonable    time,    Pritchard   v.    McLeod, 

205  Fed.  24,  123  C.  C.  A.  332. 
Case  where  optionee  was  held  estopped  from  asserting  claim  under 

option  without  time  limit,  as  against  third  party,  Hanley  v.  Watter- 

Bon,  39  W.  Va.  214,  19  S.  E.  536. 


391  ELECTION — REASONABLE  TIME  §  857 

the  facts  and  circumstances.  The  inquiry  resolves 
itself  into  an  investigation  as  to  what  time  it  is 
rational  to  suppose  the  parties  contemplated,  and 
the  law  will  decide  this  to  be  that  time  which  as 
rational  men  they  ought  to  have  understood  each 
other  to  have  had  in  mind.^  Or,  as  said  in  another 
case,  such  time  as  is  necessarily  convenient  to  do 
what  the  contract  requires  to  be  done.^ 

Where  one  party  to  a  contract  agreed  to  furnish 
and  the  other  party  to  receive  20,000  tons  of  iron 
ore,  at  the  rate  of  fifty  tons  per  day,  with  the  right 
in  the  party  furnishing  it  to  elect  to  furnish  a 
second  lot  of  20,000  tons,  it  was  necessary  to  notify 
the  other  party  of  such  election  within  a  reasonable 
time,  and  the  time  allowed  to  complete  the  delivery 
of  the  first  20,000  tons  would  be  the  longest  which 
could  be  allowed  as  a  reasonable  time.* 

A  contract  to  furnish  coal,  not  fixing  its  duration, 
terminates  by  implication  when  the  optioned  coal 
becomes  exhausted.* 

1  Larmon  v.  Jordan,  56  111.  204. 

Decisions  holding  option  not  exercised  within  reasonable  time:  Viser 
V.  Eice,  33  Tex.  139,  two  years;  Standard  Box  Co.  v.  Mut.  Biscuit 
Co.,  10  Cal.  App.  746,  103  P.  938,  ten  months;  Mossie  v.  Cyrus, 
61  Ore.  17,  119  P.  485,  ten  months;  Noe  v.  Saylor,  143  Ky.  254, 
136  S.  W.  209,  ten  months;  Eees  v.  Pellow,  97  Fed.  167,  38  C.  C.  A. 
94,  stock,  three  months;  Kellow  v.  Jory,  141  Pa.  144,  21  Atl.  522, 
four  years;  time  fixed  was  "whenever  called  upon  to"  convey; 
Swank  v.  Fretts,  209  Pa.  625,  59  Atl.  264,  two  and  one-half  years; 
Stevens  v.  McChrystal,  150  Fed.  85,  five  years;  Bowen  v.  McCarthy, 
85  Mich.  26,  48  N.  W.  155,  thirty-four  days. 

2  Hollis  v.  Libby,  101  Me.  302,  64  Atl.  621. 

3  Eaves  &  Collins  v.  Iron  Co.,  73  Ga.  459. 

4  McKell  v.  Chesapeake  etc.  R.  Co.,  186  Fed.  39,  108  C.  C.  A.  141  affirmed, 

175  Fed.  321,  99  C.  C.  A.   109. 


§  858  LAW   OP   OPTION    CONTRACTS  392 

An  offer  to  sell  property  of  a  fluctuating  value, 
like  shares  of  stock,  must  be  exercised  promptly.^ 

Where  time  of  performance  is  not  specified  in  the 
option  contract  and  the  parties  arrange  for  the 
removal  of  encumbrances  prior  to  performance, 
without  naming  a  specified  date,  the  removal  of  the 
encumbrances  within  a  reasonable  time  is  suf- 
ficient.® 

A  mere  option  to  purchase  land  indeterminate  as 
to  time,  and  accompanied  by  a  deed  deposited  in 
escrow,  is  terminable,  at  any  time,  upon  reasonable 
notice  by  the  vendor.' 

Sec.  858.  REASONABLE  TIME.  CON- 
STRUCTION, CONTINUED.— An  agreement  by 
a  seller  of  bonds  to  allow  the  purchasers  "at  any 
time"  to  return  the  bonds  and  withdraw  the  invest- 
ment with  interest,  merely  gives  the  purchaser  a 
reasonable  time  within  which  to  act;  the  contract 
was  not  intended  to  run  in  perpetuity.^ 

An  agreement  by  a  seller  of  stock  to  take  back 
the  stock  at  cost  without  interest,  at  any  time  within 
a  certain  day,  '4f  at  that  time  you  desire  me  to  do 
so,"  means  that  the  election  to  return  must  be 

B  McCracken  v.  Harned,  66  N.  J.  L.  37,  48   Atl.  513,  seven  years  not 

reasonable. 
Six   years    unreasonable,    Brooks   v.    Trustee   Co.,    76    Wash   .589,    136 

P.  1152. 
Park  V.  Whitney,  148  Mass.  278,  19  N.  E.  161,  seven  months. 

6  Cramer  v.  Mooney,  69  N.  J.  Eq.  164,  44  Atl.  625. 

7  Stone  v.  Snell,  77  Neb.  441,  109  N.  W.  750. 

1  Brooks  V.  Trustee  Co.,  76  Wash.  589,  136  P.  1152;  see,  Fitzpatrick  v. 
Woodruif,  96  N.  Y.  561,  three  years  reasonable  time. 


393  ELECTION — EXTENSION  OP  TIME  §  859 

exercised  at  the  specified  date  or  within  a  reason- 
able time  thereafter.^ 

An  option  to  a  purchaser  to  return  the  goods  if 
not  satisfied,  must  be  exercised  within  a  reasonable 
time.^ 

A  contract  for  the  repurchase  of  land  and  stipu- 
lating no  time  for  performance,  must  be  performed 
within  a  reasonable  time,  which  means  such  time 
as  would  bar  plaintiff's  remedy  if  defendant's  pos- 
session had  been  adverse/ 

A  purchaser  of  an  article  under  an  agreement 
giving  him  a  specified  period  in  which  to  use  it  and 
return  it  at  the  expiration  of  the  period  if  dissatis- 
fied, has  the  full  period  of  the  grant  for  the  trial 
and  has  also,  in  the  absence  of  any  stipulation  on 
the  point,  a  reasonable  time  thereafter  to  signify 
his  election  to  accept  it  or  return  it.^ 

Under  an  agreement  giving  a  first  refusal  to 
purchase  at  a  price  offered  by  a  third  person,  the 
optionee  has  a  reasonable  time  to  elect  after  notice 
of  an  offer  by  a  third  person.^ 

Sec.  859.  EXTENSION  OF  TIME  TO  ELECT. 
GENERALLY. — The  extension  of  the  option  time 
limit  is  in  reality  a  new  offer  in  the  sense  that 
unless  the  agreement  for  the  extension  is  supported 

2  Park  V.  Whitney,  148  Mass.  278,  19  N.  E.  161;  also,  Hollis  v.  Libby, 

101  Me.  302,  64  Atl.  621. 

3  Ide  V.  Brody,  156  111.  App.  479. 

4  Magee  v.  Catching,  33  Miss.  672. 

5  Springfield  Engine  Stop.  Co.  v.  Sharp,  184  Mass.  266,  68  N.  E.  224 ; 

Dickey  v.  Winston  Cigarette  Mach.  Co.,  117  Ga.  131,  43  S.  E.  493. 

6  Jones  V.  Moncrief-Cook  Co.,  25  Okl.  856,  108  P.  403. 


§  859  LAW    OF    OPTION    CONTRACTS  394 

by  a  new  consideration,  the  offer  may  be  withdrawn 
by  the  optionor  at  any  time  before  acceptance.  If, 
however,  there  is  a  new  consideration  to  support 
the  agreement  for  the  extension,  it  is  binding  upon 
the  optionor  during  the  time  fixed  by  the  extension 
in  the  same  manner  as  the  original  option  where 
such  option  is  supported  by  a  consideration/ 

If  the  option  contract  is  extended  and  the 
optionee  elects  within  the  extended  time,  or  where 
the  time  is  not  expressly  stipulated,  then  within  a 
reasonable  time  or  before  withdrawal  by  the 
optionor,  the  election  ripens  the  option  contract 
into  a  completed  contract  of  sale.^  On  the  other 
hand,  if  the  optionee  fails  to  elect  until  after  the 
option  is  withdrawn,  his  rights  are  at  an  end.* 

Where  the  extension  does  not  expressly  fix  the 
time,  or  where  it  arises  out  of  conduct,  it  seems  that 
a  reasonable  time  will  be  allowed.^   But  it  is  held, 

1  As  to  consideration,  see  Sec.   334. 

While  the  extension  is  considered  a  new  offer,  still  the  contract  rights 
of  the  parties  will  be  determined  by  the  original  offer  or  option, 
the  time  only  being  extended.  See  Eggleston  v.  Wagner,  46  Mich. 
610,  10  N.  W.  37. 
-  Correspondence  held  not  to  be  an  extension,  Peterson  v.  Rankin,  161 
Iowa  431,  143  N.  W.  418. 

An  extension  does  not  give  lessee  the  right  to  another  extension  includ- 
ing the  option  privilege,  Pearce  v.  Turner,  150  111.  116,  36  N.  E.  962. 

2  Vassault  v.  Edwards,  43  Gal.  458. 

3  See,  Coleman  v.  Applegarth,  68  Md.  21,  11  Atl.  284,  6  A.  S.  R,  417; 

Ide  v.  Leiser,  10  Mont.  5,  24  P.  695,  24  A.  S.  R.  17;  Standiford  v. 
Thompson,  135  Fed.  991,  68  C.  C.  A.  425,  extension  for  payment; 
Patterson  v.  Farmington  St.  Ry.  Co.,  76  Conn.  628,  57  Atl.  853; 
also,  Page  v.  Shainwald,  169  N.  Y.  246,  62  N.  E.  356. 
Cleaves  v.  Walsh,  125  Mich.  638,  84  N.  W.  1108,  in  this  caso  the  tim« 
to  make  payment  was  shortened,  but  the  rule  is  the  same. 

4  See,  Hartman  v.  McAlister,  5  N.  C.  207. 


395  ELECTION — EXTENSION  OF  TIME  §  860 

on  particular  facts,  that,  in  such  cases,  the  optionor 
may  not  terminate  the  right  without  previous 
notice.** 

Sec.  860.  EXTENSION  OF  TIME  TO  ELECT. 
AGREEMENT  FOR.— That  the  optionor  during 
the  life  of  the  option  conveyed  the  land  to  a  resi- 
dent of  an  adjoining  state,  did  not  extend  the  time 
for  the  exercise  of  the  option.'  An  agreement 
extending  time  for  the  payment  of  an  installment 
of  the  price,  v^here  it  is  so  limited,  does  not  extend 
the  option  time.^  Nor,  does  an  agreement  for 
removal  of  property  of  the  tenant  on  the  premises, 
at  the  termination  of  the  lease. ^ 

Where,  on  the  date  the  option  expired,  the 
optionee  stated  to  the  optionor  that  he  would  take 
the  land  but  refused  to  give  up  the  option  contract, 
but  stated  he  would  give  up  the  contract  if  he  did 
not  buy  within  two  weeks,  the  statement  of  the 
optionor  that  he  would  be  back  in  two  weeks  (hav- 
ing previously  told  the  optionee  that  he  could  not 

5  Henion  v.  Bacon,  91  N.  Y.  S.  399,  100  App.  Div.  99. 

As  to   oral  extension  being  within  the  Statute  of  Frauds,   see  Sees. 

409,  412,  413. 
As  to  right  and  power  of  eity  to  defer  its  option  to  purchase  franchise, 

see,  Gathright  v.  H.  M.  Byllesby  &  Co.,  154  Ky.  106,  157  S.  W.  45. 

1  Merritt  v.  Joyce,  117  Minn.  235,  135  N.  W.  820. 

2  Merk  v.  Bowery  Min.  Co.,  31  Mont.  298,  78  P.  519,  but  it  changes  the 

rule  as  to  time  being  of  essence  by  virtue  of  express  clause  to  that 
effect  in  the  original  option. 

3  Bodwell  Water  Power  Co.  v.  Old  Town  El.  Co.,  96  Me.  117,  51  Atl.  S02, 

distinguishing  Franklin  Land  M.  &  W.  Co.  v.  Card,  84  Me.  528, 
24  Atl.  960,  on  the  ground  that  in  the  latter  the  tenant  was  author- 
ized to  continue  in  possession  till  his  outlays  for  improvements  were 
paid. 


§  861  LAW   OP   OPTION   CONTRACTS  396 

get  the  land  for  less  than  the  price  named) ,  is  not 
an  extension  of  the  option.* 

The  optionor  was  a  co-tenant  in  common  of  the 
land  and  gave  a  written  option  to  purchase  within 
a  stated  time.  Shortly  before  the  expiration  of  the 
time,  the  optionee  represented  to  the  optionor  that 
he  had  decided  to  take  the  land  on  the  terms  pro- 
posed if  he  would  furnish  an  abstract  of  title  which 
should  be  approved  by  his  attorney  as  showing  a 
perfect  title.  There  was  no  time  after  the  letter 
was  written  to  have  the  abstract  made  and  exam- 
ined before  the  option  would  expire.  One  of  the 
defendants  answered  that  he  had  no  doubt  the  title 
was  good,  and  that  he  would  have  the  abstract 
made.  It  was  held  the  correspondence  did  not 
operate  to  extend  the  option,  and  that  it  did  not 
create  a  new  contract  binding  upon  either  party, 
but  amounted  to  no  more  than  negotiations  looking 
to  the  future.^ 

Sec.  861.  THE  SAME.  CASES.— Defendants 
agreed  to  convey  certain  land  to  plaintiffs  for  a 
certain  price  if  they  desired  to  purchase  after  the 
completion  of  an  oil  well  on  an  adjoining  tract,  the 
contract  to  be  closed  within  ten  days  after  accep- 
tance of  the  option.  The  well  flowed  oil  May  2, 
1906,  and  on  the  3rd,  plaintiffs  told  defendants 
they  would  take  the  land  and  would  close  the  deal 
on  the  5th  of  May.  They  did  not  do  so,  and  def en- 

4  Cummins  v.  Beavers,  103  Va.  230,  48  S.  E.  891,  106  A.  S.  R.  881,  1  Ann. 
Gas.  986. 

6  James  v.  Darby,  100  Fed.  224,  40  C.  C.  A.  341;  see,  Fulton  r.  Mes- 
senger, 61  W.  Va.  477,  56  S.  E.  830,  election  in  time,  but  extension 
to  make  survey  and  furnish  abstract  of  title. 


397  ELECTION — EXTENSION  OF  TIME  §  861 

dants  notified  them  that  the  time  would  not  be 
extended  beyond  the  19th,  after  which  the  lessees 
of  plaintiffs  brought  in  a  valuable  oil  well  thereon, 
when  plaintiffs  claimed  the  right  to  complete  the 
purchase,  and  it  was  held  the  option  expired  May 
19th,  and  that  performance  thereafter  could  not  be 
compelled.^ 

Where  the  optionee,  within  the  stipulated  time, 
declines  to  make  the  purchase  within  that  time,  on 
account  of  a  mistake  in  the  description  of  the  prop- 
erty and  brings  suit  to  reform  such  description  and 
to  enforce  the  contract  as  reformed,  the  court  can 
not,  on  an  amended  complaint,  extend  the  time 
within  which  plaintiffs  may  determine  whether  or 
not  they  will  elect  to  accept  the  property  as 
described  in  the  complaint  and  decree  specific  per- 
formance against  defendants  in  the  event  of  accep- 
tance.^ 

When  the  optionor  and  optionee  agreed  that 
unless  the  latter  should,  within  twenty  days,  exer- 
cise his  option  for  the  purchase  of  the  land,  he 
should  pay  a  certain  siun  in  cash  "for  renewal  of 
said  proposition  for  thirty  days,"  the  optionee  hav- 
ing failed  to  exercise  the  option,  or  to  make  the 
payments  specified  within  twenty  days,  could  not 
thereafter  exercise  the  option  though  he  offered  to 
do  so  within  the  additional  thirty  days.^ 

An  endorsement  by  a  lessor  on  a  lease  containing 
an  option  to  purchase,  extending  the  ''within  con- 

1  Laughner  v.  Smith,  232  HI.  534,  83  N.  E.  1052. 

2  Pope  V.  Hoopes,  90  Fed.  451,  33  C.  C.  A.  595 ;  see,  Hopwoorl  v.  McClaus- 

land,  120  Iowa  218,  94  N.  W.  469;  Vassault  v.  Edwards,  43  Gal.  458; 
Clarno  v.  Grayson,  30  Ore.  Ill,  46  P.  426,  437. 

3  Tevis  V.  Nugent,  22  K7.  L.  Eep.  894,  59  S.  E.  9. 


§  861  LAW    OF    OPTION    CONTRACTS  398 

tract"  until  a  date  named,  extends  the  whole 
contract,  including  the  option  to  purchase/ 

Where  an  option  to  purchase  is  inserted  in  a 
lease  for  one  year,  with  such  right  of  renewal  from 
year  to  year,  not  exceeding  two  years,  upon  the 
understanding  that  the  option  could  be  exercised  in 
any  year  during  the  tenancy,  such  option  continues 
under  a  renewal  for  the  second  year,  though  the 
option  clause  is  left  out  of  the  second  lease  by 
agreement,  as  unnecessary,  on  the  mutual  under- 
standing and  agreement  that  the  option  was 
extended.^ 

A  lease  contained  an  option  to  purchase  at  any 
time  during  sawing  of  the  timber  referred  to  in 
the  lease,  which  the  lessee  was  required  to  saw 
during  the  first  and  second  years.  The  failure  of 
the  lessee  to  saw  the  required  quantity  during  such 
time  did  not  operate  to  extend  the  option  time  so 
as  to  entitle  him  to  exercise  the  right  of  option 
after  the  expiration  of  the  second  year  on  the 
ground  that  the  lumber  was  not  all  sawed.® 

In  an  action  for  specific  performance,  wherein 
plaintiff  vendee  testified  he  offered  to  perform,  if 
the  defendant  would  stop  an  adjoining  owner  from 
moving  buildings  off  the  land,  a  letter  written  by 
defendant  after  plaintiff's  time  to  perform  had 
expired,  in  which  he  asked  the  plaintiff  to  see  the 
adjoining  owner  about  the  buildings,  stating  he 
would  have  the  adjoining  owner  enjoined  if  he  did 
not  stop,  and  asking,  "How  are  you  coming  along 

4  Grumnier  v.  Price,  101  Ark.  611.  143  S.  W.  95. 

5  Abbott  V.  76  Land  Co.,  87  Cal.  323,  25  P.  693 ;  under  successive  leases, 

Schields  v.  Horbach,  28  Neb.  359,  44  N.  W.  465. 

•  Felton  T.  CheUis,  81  Vt.  10,  69  Atl.  149. 


399  ELECTION — TIME  AS  ESSENCE  §  862 

with  your  deal?"  but  making  no  reference  to  the 
contract,  did  not  constitute  an  extension  of  the  time 
for  plaintiff  to  perform  his  pai-t  of  the  contract/ 

Sec.  862.  TIME  AS  ESSENCE  OF  ELEC- 
TION.— ^At  common  law,  time  of  performance  is 
always  of  the  essence  of  a  contract,  but  in  equity 
time  is  not  regarded  as  of  the  essence  unless  the 
parties  express  or  imply  an  intent  to  make  it  of  the 
essence.^ 

7  Peterson  v.  Rankin,  161  Iowa  431,  143  N.  W.  418. 
Where  an  option  is  extended  on  condition  that  the  optionees  satisfy 
the  optionor  that  they  can  comply  with  the  conditions  of  the  option, 
the  burden  of  proof  is  on  optionees  to  show  optionor  is  satisfied. 
Acts  of  secretary  held  not  to  waive  condition  on  which  option  was 
granted,   Washington   v,   Eosario   M.   Co.,   28    Tex.    Civ.   App.    430, 
67   S.  W.  459. 
Case  where  extension  of  time  to  optionee  was  held  not  to  affect  rights 
of  purchasers  from  the  devisees  of  the  will,  the  option  having  been 
given  by  the  executors,  Trogden  v.  WUliams,  144  N.  C.  192,  56  S.  E. 
865,   10  L.  R.  A.    (N.  S.)    867. 
Contract  held  sale  and  not  extension,  or  new  option,  FuUenwider  v. 

Rowan,  136  Ala.  287,  34  So.  975. 
Extension  to  carry  out  an  agreement  of  sale,  held  not  to  convert  the 
agreement  into  an  option,  Standiford  v.  Kloman,  234  Pa.  443, 
83  Atl.  311;  see,  also,  Seymour  v.  Canfield,  122  Mich.  212,  80  N.  W. 
1096. 
Held  option  in  lease  could  be  exercised  at  the  end  of  the  fixed  time 
or  by  renewal  of  the  lease  at  the  end  of  every  succeeding  year 
until  lease  was  terminated,  Thomas  v.  Gottlieb  etc,  Co.,  102  Md.  417, 
62  Atl.  633. 

1  Ellis  V.  Bryant,  120  Ga.  890,  48  S.  E.  352;  Roberts  v.  Braffett, 
33  Utah  51,  92  P.  789. 
Crawford  v.  Toogood,  L.  E.  13  Ch.  Div.  153,  holding  in  order  to  make 
time  of  the  essence  of  a  contract  after  it  has  been  entered  into,  the 
time  fixed  must  be  reasonable.  Lease  and  option  case  where,  under 
special  circumstances,  election  was  made  after  option  time  limit  and 
specific  performance  decreed;  Pegg  v.  Wisden,  16  Beav.  239,  16  Jur. 
1105,  51  Eng.  Reprint  770. 


§  862  LAW   OP    OPTION   CONTRACTS  400 

The  decisions  concur  in  holding  that  in  an  option 
contract,  because  of  its  one-sided  nature,  time  of 
election  is  of  the  essence  in  equity  as  well  as  at  law, 
whether  expressly  so  stipulated  or  not,-  and  that, 
therefore,  the  failure  of  the  optionee  to  exercise  his 
right  of  election  and  to  give  notice  within  the  time 
stipulated  in  the  option,  or  implied  by  law,  ends 
his  option  rights.^ 

2Neeson  v.  Smith,  47  Wash.  386,  92  P.  131;  Winders  v.  Kenan,  161 
N.  C.  628,  77  S.  E.  687;  Watson  v.  Coast,  35  W.  Va.  463,  14  S.  E. 
249,  intimates  otherwise;  Carter  v.  Phillips,  144  Mass.  100,  10  N.  E. 
500;  Kentucky  etc.  Co.  v.  Warwick  Co.,  109  Fed.  280,  48  C.  C.  A. 
363,  see,  also,  decisions  in  next  note;  rule  as  to  mining  property, 
see  cases  in  note  6,  Sec.  920. 

S  Martin  v.  Morgan,  87  Cal.  203,  25  P.  350,  22  A.  S.  R.  240 ;  Commercial 
Bank  v.  Weldon,  148  Cal.  601,  84  P.  171;  Vassault  v.  Edwards, 
43  Cal.  458;  Magoffin  v.  Holt,  62  Ky.  (1  Duv.)  95;  Stembridge 
V.  Stembridge,  87  Ky.  91,  7  S.  W.  611,  9  Ky.  L.  Rep.  948;  Larned 
V.  Wentworth,  114  Ga.  208,  39  S.  E.  855;  Hardy  v.  Ward,  150 
N.  C.  385,  64  S.  E.  171 ;  Trogden  v.  Williams,  144  N.  C.  192,  56  S.  E. 
865,  10  L.  R.  A.  (N.  S.)  867;  Morton  v.  Nichols,  12  Brit.  Col.  9; 
Wheeling  Creek  etc.  Co.  v.  Elder,  170  Fed.  215;  Standiford  v. 
Thompson,  135  Fed.  991,  68  C.  C.  A.  425,  extension;  Woods  v. 
McGraw,  127  Fed.  914,  63  C.  C.  A.  556;  Hollmann  v.  Conlon,  143 
Mo.  369,  45  S.  W.  275;  Dunnaway  v.  Day,  163  Mo.  415,  63  S.  W. 
731;  Estes  v.  Furlong,  59  111.  298;  Dyer  v.  Duffy,  39  W.  Va.  148, 
19  S.  E.  540,  24  L.  R.  A.  339 ;  Patterson  v.  Farmington  St.  Ry.  Co., 
76  Conn.  628,  57  Atl.  853;  Indiana  etc.  L.  Co.  v.  Pharr,  82  Ark.  573, 
■  102  S.  W.  686;  Swank  v.  Fretts,  209  Pa.  625,  59  Atl.  264;  Boston 
etc.  R.  Co.  V.  Rose,  194  Mass.  142,  80  N.  E.  498 ;  Clarno  v.  Grayson, 
30  Ore.  Ill,  46  P.  426;  Lockman  v.  Anderson,  116  Iowa  236,  89 
N.  W.  1072;  Frey  v.  Camp,  131  Iowa  109,  107  N.  W.  1106;  Kruegel 
V.  Berry,  75  Tex.  230,  9  S.  W.  863;  Grier  v.  Stewart,  (Tex.  Civ.  App.) 
136  S.  W.  1176;  Longworth  v.  Mitchell,  26  Ohio  St.  334;  Ball  v. 
Canada  Co.,  24  Grant  Ch.  (U.  C.)  281;  Nevitt  v.  McMurray,  14  Ont. 
App.  126;  Bluthenthal  v.  Atkinson,  93  Ark.  252,  124  S.  W.  510; 
Coyle  V.  Kierski,  (Del.  Ch.)  89  Atl.  598;  Jones  v.  Noble,  66  Ky. 
(3  Bush.)  695. 
The  rule  has  reference,  of  course,  to  the  time  expressly  fixed  by  the 
agreement;  if  no  time  is  expressly  fixed,  then  the  right  of  election 
runs  for  a  reasonable  time,  see,  Clarno  v.  Grayson,  30  Ore.  Ill, 
46  P.  426,  429. 


401  ELECTION — TIME  AS  ESSENCE  §  862 

Courts  look  upon  election  as  a  condition  prece- 
dent to  the  vesting  of  any  property  right  at  all  in 
the  optionee.  The  case  differs,  therefore,  from  pen- 
alties and  forfeitures  of  property  rights  already 
acquired,  and  from  timely  payment  of  the  price 
following  an  election.* 

3  There  should,  perhaps,  be  a  qualification  of  the  rule  of  the  text  when 

the  option  is  part  of  a  lease  or  other  contract  which  furnishes  the 
consideration  for  the  option,  or  where  the  acts  done  under  the  lease 
are  with  a  view  to  the  exercise  of  the  option.  In  such  cases  there 
is  reputable  authority  that  time  is  not  necessarily  of  the  essence. 
See  Schroeder  v.  Gemeinder,  10  Nev.  355;  McCormick  v.  Stephany, 
61  N.  J.  Eq.  208,  48  Atl.  25.    See  note  2,  Sec.  864;  note  3,  Sec.  868. 

4  Steele  v.  Bond,   32  Minn.   14,   18   N.  W.   830 ;    and  according   to   this 

decision  the  fact  that  the  optionee  paid  a  large  sum  as  consideration 
for  the  option  is,  therefore,  immaterial.  In  this  case,  which  was  an 
option  in  a  lease  of  the  premises,  the  price  was  $11,500  and  the 
consideration  paid  for  the  option  privilege  to  purchase  was  $3000. 
The  court  viewed  the  option  privilege  as  an  entirely  independent 
transaction,  and  strictly  held  to  the  general  rule  that  the  optionee 
could  not  be  helped  out  for  his  failure  to  pay  in  time  because  the 
rule  as  to  forfeiture  did  not  apply.  A  different,  and  in  the  author 's 
opinion  a  better  view  is  taken  in  the  cases  cited  in  note  3,  supra, 
and  besides  where,  as  in  the  Minnesota  case,  so  large  a  sum  is  paid 
for  the  option,  it  would  seem  more  equitable  to  hold  that  the  effect  is 
to  vest  in  the  optionee  an  equitable  estate.  See  Clarno  v.  Grayson, 
30  Ore.  Ill,  46  P.  426,  429-30;  Ely  v.  Beaumont,  5  S.  &  R.  (Pa.) 
124;  but  as  to  the  general  rule,  see,  Davis  v.  Thomas,  1  Russ  &  M. 
506,  39  Eng.  Reprint  195;  I.  X.  L.  etc.  House  v.  Berets,  32  Utah 
454,  91  P.  279;  McCauley  v.  Coe,  150  111.  311,  37  N.  E.  232,  234; 
Loekman  v.  Anderson,  116  Iowa  236,  89  N.  W.  1072;  L'Engle  v. 
Overton,  61  Fla.  653,  53  So.  381;  Nelson  v.  Stephens,  107  Wis.  136, 
82  N.  W.  163;  Patterson  v.  Farmington  St.  Ry.  Co.,  76  Conn.  628, 
57  Atl.  853,  859;  Bluthenthal  v.  Atkinson,  93  Ark.  252,  124 
S.  W.  510. 

Same  rule  applies  to  option  to  repurchase,  see  Jeffreys  v.  Charlton, 
72  N.  J.  Eq.  340,  65  Atl.  711. 

Essence  clause  in  lease  with  option  held  to  apply  to  option.  Snider  v. 
Yarbrough,  43  Mont.  203,  115  P.  411. 

An  option  to  purchase  differs  materially  from  a  condition  subsequent 
capable  of  working  a  forfeiture  to  the  optionor,  Woodall  v.  Bruen, 
(W.  Va.)   85  S.  E.  170. 

26 — Option  Contracts. 


§  863  LAW    OF    OPTION    CONTRACTS  402 

In  option  contracts,  courts  view  any  delay  in 
election,  beyond  tlie  fixed  option  time,  with  strict- 
ness, since,  as  it  is  said,  it  is  optional  with  the 
optionee  whether  or  not  he  will  elect,  and  that,  in 
the  meantime,  the  optionor  is  bound.^ 

But  as  pointed  out  in  the  following  sections,  the 
general  rule  is  subject  to  the  qualification  that 
courts  of  equity  may  and  do  grant  relief  to  an 
optionee  in  default  in  cases  where  the  delay  or  fail- 
ure is  attributable  to  inequitable  conduct  on  the 
part  of  the  optionor,  amounting  to  estoppel,^  or 
where  there  is  mistake,  or  some  other  equitable 
ground  for  invoking  its  jurisdiction,^  or  where 
there  has  been  providential  intervention.* 

Sec.  863.  ELECTION.  EQUITABLE  RE- 
LIEF TO  OPTIONEE.   GENERALLY.— In  the 

preceding  sections  of  this  chapter,  we  have  endeav- 
ored to  present  the  rules  of  law  necessary  to  be 
observed  by  an  optionee  desiring,  by  election,  to 
turn  his  option  into  a  binding  promise  on  the  part 
of  the  optionor.  These  general  rules  can  be  sum- 
marized as  follows :  the  election  must  be  timely,  that 
is,  it  must  be  made  within  the  contract  time  if 
expressed,  or  otherwise  within  a  reasonable  time; 
it  must  be  made  by  the  optionee  and  communicated 

5  Jones  V.  Moncrief-Cook  Co.,  25  Okl.  856,  108  P.  403 ;  Meiclling  v.  Tref z, 

48  N.  J.  Eq.  638,  23  Atl.  824;  Winders  v.  Kenan,  161  N.  C.  628, 
77  S.  E.  687. 

6  See  Sees.  866,  869. 

7  Ellis  V.  Bryant,  120  Ga.  890,  48  S.  E.  352,  payment  being  the  act  of 

election;  Wilkins  v.  Evans,  1  Del.  Ch.  156;  Usher  v.  Livermore, 
2  Iowa  117;  Taylor  v.  Longworth,  14  Pet.  (U.  S.)  172,  10  L.  Ed- 
405;  Steele  v.  Bond,  32  Minn.  14,  18  N.  W.  830. 

8  See  Sec.  864. 


403  ELECTION — EQUITABLE  RELIEF  §  863 

to  the  optionor  in  the  mode  and  at  the  place 
expressed  in  the  contract  or  implied  by  law ;  and  it 
must  be  unconditional,  meaning  by  this  that  the 
election  must  be  upon  the  exact  terms  and  condi- 
tions of  the  option.  To  these  must  be  added  the  rule 
that  the  failure  of  the  optionee  to  meet  these 
requirements,  works  an  end  to  his  option  rights. 
But  this  last  rule  is  based  on  the  assumption  that 
the  failure  of  the  optionee  was  due  to  his  own 
neglect  or  fault  and  was  not  brought  about  by  con- 
duct ofsthe  optionor,  nor  caused  by  circumstances 
and  events  beyond  the  control  of  the  optionee. 

It  becolnes  necessary  now  to  present  the  view 
that  these  rules,  the  strict  enforcement  of  which  was 
so  much  insisted  upon  by  the  early  decisions,  are, 
nevertheless,  subject  to,  and  qualified  by,  certain 
other  overruling  equitable  rules,  in  accordance  with 
which  courts  of  equity  grant  relief  in  cases  involv- 
ing fraud  or  mistake  and  likewise,  under  special 
circmnstances,  where  performance  is  prevented  by 
accident,  and  also  enforce  the  rule  of  estoppel 
where  the  conduct  of  the  optionor  has  been  such  as 
to  make  that  rule  applicable.^  With  reference  to 
accident  and  act  of  God,  it  would  seem,  on  prin- 
ciple, that  equity  has  no  jurisdiction  to  extend  the 
time  so  as  to  cover  an  overtime  election,  except  the 
facts  and  circumstances  are  such  as  to  make  a  case 
upon  some  other  equitable  ground  within  its  juris- 

1  In  cases  where  the  conduct  of  the  optionor  is  not  involved,  there  is  no 
equitable  ground  upon  which  to  base  waiver  or  estoppel  since  the 
act  of  election  or  other  collateral  condition,  the  performance  of 
which  is  a  condition  precedent  to  election,  is  necessary  to  raise  the 
bilateral  contract,  and  the  rule  with  reference  to  forfeiture,  appli- 
cable to  bilateral  contracts,  can  not  be  invoked,  except  upon  the 
ground  of  fraud  or  mistake.  Equity  can  not  extend  the  time  for 
election.    See,  Briles  v.  Paulson,   (Cal.)    149  P.  169. 


§  864  LAW    OF    OPTION    CONTRACTS  404 

diction,  but  as  will  be  seen  in  the  following  sections, 
there  are  a  few  cases  where  it  would  seem,  courts 
have  granted  relief  for  pure  accident  and  some- 
times for  providential  interference. 

Sec.  864.  ELECTION.  EQUITABLE  RE- 
LIEF. ACCIDENT  AND  ACT  OF  GOD.— Death 
of  the  optionor  and  refusal  of  the  administrator  to 
receive  the  purchase  money  and  non-residence  of 
some  and  infancy  of  other  heirs,  excuse  a  delay  of 
twenty-one  days  in  electing  and  giving  notice.^  So, 
where  the  lessee  was  prevented  from  giving  notice 
of  renewal  of  a  lease  within  the  prescribed  time, 
because  of  an  accidental  injury  received  by  him,  he 
having  served  notice  at  the  earliest  opportunity 
and  the  lessor  having  suffered  no  loss  from  the 
delay.  Specific  performance  of  a  covenant  for 
renewal  of  the  lease  was  granted  notwithstanding 
time  was  of  the  essence.^ 

1  Page  V.  Hughes,  41   Ky.    (2   B.   Mon.)    439.    The  court  quoting  Lord 

Thurlow,  said:  "Accident  or  misfortune  which  the  [lessee]  could 
not  prevent  and  by  means  of  which  he  was  disabled  from  applying 
for  the  renewal  at  the  stated  time,  according  to  the  lease ' '  saved 
the  forfeiture  and  entitled  him  to  specific  execution  and  that  this 
seemed  to  be  perfectly  consistent  with  the  * '  philosophy  and  harmony 
of  equity  jurisprudence. ' ' 

2  Monihon  v.  Wakelin,  6  Ariz.  225,  56  P.  735.   This  case,  like  some  others 

(see  note  3,  Sec.  862),  views  an  option  in  a  lease  as  a  real  contract, 
and  therefore,  not  governed  strictly  by  the  rules  applicable  to  pure 
optSons,  and  holds  that  though  time  was  of  the  essence,  equity  would, 
under  the  circumstances,  permit  the  lessee  to  make  his  election  after 
the  expiration  of  the  fixed  contract  time. 
In  Usher  v.  Livermore,  2  Iowa  117,  it  is  said  that  time  may  be  made 
of  the  essence  of  a  contract,  but  in  equity,  when  the  precise  time 
has  been  omitted  by  accident,  chance  or  misfortune,  and  the  party  has 
shown  himself  ready,  and  desirous  of  performing  at  the  earliest  day, 
under  the  circumstances,  the  precise  time  is  not  vital. 


405  ELECTION — EQUITABLE  RELIEF  §  865 

In  a  North  Carolina  case  it  is  said  that  if  the 
parties  agree  upon  a  day  of  performance,  in  the 
absence  of  waiver,  or  those  providential  interven- 
tions recognized  as  sufficient  to  relieve  them  from 
strict  performance,  the  courts  are  not  permitted  to 
do  so.^  It  is  held,  under  the  Louisiana  Code,  that 
when  an  obligation  is  to  come  into  existence  only 
in  case  a  certain  thing  is  done  within  a  certain 
time,  and  it  is  not  done  within  that  time,  no  obliga- 
tion arises,  and  that,  except  for  the  acts  of  the 
obligee,  it  is  immaterial  what  was  the  cause  of  the 
thing  not  having  been  done,  specially  mentioning 
the  acts  of  third  persons  and  vis  major,  as  not 
exceptions.^ 

Sec.  865.  ELECTION.  EQUITABLE  RE- 
LIEF. MISTAKE.— A  lessee  supposing  he  had 
the  option  until  the  24th  of  March,  1887,  applied 
to  the  assignee  of  the  lessor's  interest,  prior  to 
March  1,  1887  (the  last  day  of  the  option  time), 
to  have  the  option  extended  for  two  years.  The 
assignee  agreed  to  give  him  an  answer  on 
March  7,  1887,  at  which  time  he  informed  the 
lessee  that  the  option  would  not  be  extended,  but 
promised  to  have  the  deed  ready  on  March  24, 1887. 
On  that  day  the  lessee  tendered  the  amount  stipu- 
lated in  the  lease  as  the  price.  The  court  remarking 
that  there  was  no  doubt  the  parties  understood, 
intended  and  believed  that  the  option  time  expired 
on  the  24th  of  March,  held  that  on  the  facts,  the 

3  Hardy  v.  Ward,  150  N.  C.  385,  64  S.  E.  171.  176. 

4  JeniaiDgs  etc.  Synd.  v.  Oil  Co.,  119  La.  793,  44  So.  481. 


§  866  LAW  OF  OPTION  CONTRACTS  406 

lessee  was  entitled  to  specific  performance.*  But  it 
would  be  held  otherwise  where  the  optionor,  with- 
out intent  to  deceive,  stated  to  the  optionee  the 
wrong  date,  it  not  appearing  that  the  optionee 
asked  for  an  inspection  of  the  option  and  did  not 
make  any  effort  to  ascertain  the  date.^ 

Sec.  866.  ELECTION.  EQUITABLE  RE- 
LIEF. MISCELLANEOUS  CASES  GRANT- 
ING RELIEF. — In  a  case  involving  a  lease  and 
option  to  purchase,  the  lessee  entered  with  a  view 
of  purchasing  and  made  improvements,  but  was 
unable  to  make  payment  of  the  price  until  a  few 
days  after  it  was  due,  the  lessor  having  gone  away, 
but  did  make  tender  and  a  demand  for  a  deed  upon 
the  lessor's  return,  ten  days  later,  which  was 
refused.   The  court  granted  specific  performance.^ 

Where  the  failure  of  a  tenant  to  appoint  an 
appraiser,  within  the  time  stipulated,  to  fix  the 
value  of  the  premises  as  the  basis  for  renewal,  was 
not  wilful  and  it  did  not  appear  that  any  new  rights 
had  intervened,  or  that  the  position  of  the  parties 
had  been  changed  by  the  delay  in  the  appointment 
of  appraisers,  or  that  damage  would  result,  while 
if  relief  was  refused  the  tenant  would  lose  a  valu- 

t  Keyport  Brick  &  T.  Mfg.  Co.  v.  Lorillard,    (N.  J.  Eq.)    19  Atl.  381, 
affirmed  48  N.  J.  Eq.  295,  22  Atl.  203. 

2  McKenzie  v.  Murphy,  31  Colo.  274,  72  P.  1075. 

Mere  inadvertence  is  not  sufficient  to  excuse  delay,  I.  X.  L.  etc.  House 
V.  Berets,  32  Utah  454,  91  P.  279. 

1  Wilson  V,  Herbert,  76  Md.  489,  25  Atl.  685, 

Case  where  part  of  price  paid  within  time  (payment  being  election) 
and  balance  delayed  until  after  expiration  of  option  time  owing  to 
objection  by  optionor  to  statement  of  accounts,  Wilkins  v.  Evans, 
1  Del.   Ch.  156. 


407  ELECTION — EQUITABLE  RELIEF  §  867 

able  building,  equity  will  excuse  the  delay  and  grant 
specific  performance  of  the  covenant  to  renew.^ 

The  grantor  of  an  option  who  prevents  its  exer- 
cise within  the  time  specified  in  the  grant,  can  not 
take  advantage  of  the  failure  to  exercise  it  in  due 
time,  but  must  give  a  reasonable  time  therefor  after 
the  obstruction  he  interposed  is  removed.* 

Sec. 867.  ELECTION.  EQUITABLE  RE- 
LIEF. MISCELLANEOUS  CASES  DENYING 
RELIEF. — A  tenant  occupied  premises  for  busi- 
ness purposes  for  nearly  ten  years  under  a  lease 
with  covenant  for  an  extension  of  the  lease,  on 
written  notice,  at  a  day  fixed,  and  had  spent  a  large 
sum  in  fitting  the  premises  for  his  business,  and 
had  built  up  a  valuable  business,  and  was  unexpect- 
edly in  a  foreign  country  on  the  day  he  was 
required  to  give  notice  of  his  intention  to  renew, 
but  gave  notice  eighteen  days  thereafter,  immedi- 
ately upon  his  return  from  abroad,  and  the  court 
held  that  equity  could  give  him  no  relief  as  the 
notice  of  renewal  was  a  condition  precedent.  It 
appeared,  however,  that  the  lessee  had  the  right  to 
give  notice  at  any  time  during  the  ten  year  term.^ 

Where  the  optionee  gave  notice  of  election  by 
letter  through  the  mail,  and  the  letter  was  not 
received  by  the  optionor,  the  failure  to  get  the 
notice  to  the  optionor  in  time,  is  not  one  that  a 
court  of  equity  will  correct,  where  the  contract  did 

2  Simon  v.  Schraitt,  118  N.  Y.  S.  326. 

3  Blodgett  V.  Lanyon  Zinc  Co.,  120  Fed.  893,  58  C.  C.  A.  79. 

iDoepfner  v.  Bowers,  106  N.  Y.  S.  932. 


§  868  LAW   OF   OPTION    CONTRACTS  408 

not  require  notice  by  mail,  and  it  could  have  been 
given  personally  to  the  optionor.^ 

Sec.  868.  ELECTION.  WAIVER  AND 
ESTOPPEL. — The  fundamental  conception  of 
waiver  is  some  act  by  one  of  the  parties  to  the  con- 
tract sufficient  to  excuse  performance  by  the  other 
party  of  some  one  or  more  of  the  stipulations  of 
the  contract  on  his  part.^  It  is  a  well  settled  prin- 
ciple in  the  law  of  options  that  unless  the  optionee 
timely  exercises  his  right  of  election  in  the  mode 
and  in  accordance  with  the  terms  of  the  option  and 
gives  timely  notice  thereof  to  the  optionor,  his 
option  rights  are  at  an  end.  Since  waiver  can  only 
arise,  so  to  speak,  from  conduct,  is  it  possible  that 
the  conduct  of  the  optionor  may  be  such  as  to  dis- 
pense with  election  ?  There  may  be  conduct  on  the 
part  of  the  optionor  which  will  waive  a  timely 
exercise  of  the  option  right  and  notice  thereof,  or 
an  insufficient  or  a  conditional  election,  or  a  formal 
notice,  but  it  is  not  believed  that  conduct  on  the 
part  of  the  optionor,  short  of  estoppel,  can  entirely 
dispense  with  an  election  of  some  kind  brought  to 
the  knowledge  of  the  optionor.^ 

2  Bluthenthal  v.  Atkinson,  93  Ark.  252,  124  S.  W.  510. 

1  Acts  and  conduct  of  third  parties  will  not  work  waiver  or  estoppel, 

Bradley  v.  Bradley,  14  Ont.  L.  Eep.  473,  10  Ont.  Wkly.  Rep.  223. 
Vendee  of  lessor  who  is  not  a  party  to  the  lease-option  contract,  can 
not,  by  recognizing  the  lease  after  his  purchase,  render  the  lease 
effective  so  aa  to  make  an  obligation  contained  therein  binding  on 
the  vendor,  Frank  v.  Stratford-Handcock,  13  Wyo.  37,  77  P.  134, 
110  A.  S.  E.  963,  67  L.  R.  A.  571. 

2  See  Kelsey  v.  Crowther,  162  U.  S.  404,  40  L.  Ed.  1017,  16  S.  Ct.  808; 

Abbott  V.  76  Land  Co.,  101  Cal.  567,  53  P.  445;  Mansfield  v.  Hodgdon, 
147  Mass.  304,  17  N.  E.  544;  Borst  v.  Simpson,  90  Ala.  373,  7  So. 
814;    Mason   v.   Payne,   47    Mo.    517;    Byers   v.   Denver   C.   R.    Co., 


409  ELECTION — WAIVER  AND  ESTOPPEL  §  868 

Before  an  agreement  of  sale  can  arise  out  of  an 
option  contract  there  must  be  an  act  of  some  kind, 
at  some  time,  on  the  part  of  the  optionee,  evidencing 
his  intention  to  exercise  the  option.  Waiver  will 
not,  and  can  not,  supply  this  necessary  act  on  the 
part  of  the  optionee  unless  there  is  involved  in  such 
conduct,  constituting  waiver,  an  act  evidencing  an 
intention  to  elect,  or,  unless  the  conduct  on  the 
part  of  the  optionor  is  such  as  to  estop  him.^ 

13  Colo.  552,  22  P.  951,  953;   see,  Pegg  v.  Wisden,   16  Beav.  239, 
16  Jur.  1105,  51  Eng.  Reprint  770. 

2  Election  varying  from  terms  of  option,  see  McCowen  v.  Pew,   18  Cal. 
App.  302,  123  P.  191,  199. 

As  to  fraud  etc.,  see  Cusack  v.  Gunning  System,  109  Dl.  App.  588, 
extension  of  lease. 

Conspiracy  to  prevent  election,  Breyfogle  v.  Walsh,  80  Fed.  172, 
25  C.  C.  A.  357;  Weaver  v.  Burr,  31  W.  Va.  736,  8  S.  E.  743, 
3  L.  R.  A.  94. 

Of  course,  if  the  option  contemplates  the  doing  or  performance  of 
some  act  by  the  optionee  as  consideration  for  the  option,  the  per- 
formance of  the  act,  in  itself,  may  constitute  an  election,  without 
notice  to  the  optionor.  This,  however,  is  by  force  of  the  agreement, 
see  Goldberg  v.  Drake,  145  Mich.  50,  108  N.  W.  367,  accceptance  of 
option  written  thereon  in  absence  of  optionor,  see,  also,  McCarty  v. 
Helbing,   (Ore.)   144  P.  499.  . 

Under  a  "refusal"  the  election  is  not  waived,  the  time  being  con- 
trolled by  the  acts  of  the  optionor,  Cummings  v.  Nielson,  42  Utah 
157,    129   P.   619. 

There  can  be  no  waiver  of  acceptance  of  a  mere  offer.  See  Tilton  v. 
Sterling,  28  Utah  173,  77  P.  758,  107  A.  S.  R.  689;  Marsh  v.  Lott, 
8  Cal.  App.  384,  97  P.   163. 

8  See,  Raddatz  v.  Florence  Inv.  Co.,  147  Wis.  636,  133  N.  W.  1100, 
where  payment  was  the  act  of  election  but  was  not  in  time  the  court 
saved  the  right  of  the  lessee-optionee,  because  of  the  conduct  of 
the  lessor,  placing  its  decision  on  the  rule  as  to  forfeiture.  See,  also, 
Scott  v.  Hubbard,  67  Ore.  498,  136  P.  653 ;  Tilton  v.  Sterling  C.  & 
C.  Co.,  28  Utah  173,  77  P.  758,  107  A.  S.  R.  689;  Merritt  v.  Joyce, 
117  Minn.  235,  135  N.  W.  820. 
The  distinction  between  a  bare  election  and  notice,  and  election  con- 
sisting of  payment,  or  involving  payment  of  the  price  should  be 
kept  in  mind.    Thus,  in  a  deed  granting  land  on  condition  that  the 


§  869  LAW    OF    OPTION    CONTRACTS  410 

Sec.  869.  WAIVER  AXD  ESTOPPEL.  CASES 
HOLDING  ACTS  CONSTITUTE  WAIVER.— 
Where  a  lessee,  in  a  lease  containing  an  option  to 
purchase,  was  ignorant  of  his  rights  and  relied  on 
the  lessor's  agents  to  apprise  him  of  his  obligations 
as  they  arose,  and  upon  such  reliance  made 
improvements,  and  the  lessor  treated  him  as  hav- 
ing elected  to  purchase,  it  was  held  the  lessee  had 
sufficiently  elected  to  purchase.^ 

Where  the  lessee  holds  over  and  pays  rent,  under 
a  lease  giving  him  the  option  to  renew,  on  notice, 
prior  to  expiration  of  the  term,  notice  is  waived.^ 

When,  by  the  terms  of  the  option,  the  optionee 
was  to  send  written  notice  of  election  and  he  sent 
such  notice  by  an  agent  who  read  it  to  the  optionor 
and  notified  him  that  it  would  be  served  upon  him 
the  date  fixed  by  the  option,  a  statement  by  the 
optionor  that  he  would  not  accept  the  notice  and 

estate  conveyed  shall  not  vest  until  and  unless  a  certain  payment 
shall  be  made  on  or  before  a  certain  time,  payment  is  in  pursuance 
of  a  contract  already  made  and,  therefore,  the  absolute  refusal  of 
the  grantor  to  perform  before  the  time  fixed  for  payment,  would  be 
a  waiver  of  a  timely  payment  or  tender.  If,  on  the  other  hand, 
the  transaction  should  be  construed  to  be  an  option  and  the  payment 
the  act  of  election,  no  contract  could  arise  without  an  election,  see 
Borst  V.  Simpson,  90  Ala.  373,  7  So.  814;  Thomson  v.  Kyle,  39  Fla, 
582,  23  So.  12,  63  A.  S.  R.  193. 
3  As  to  oral  extension  and  waiver  see  Sec.  413  and  note. 

1  Eaddatz  v.  Florence  Inv.  Co.,  147  Wis.  636,  133  N.  W.  1100 ;  Andrews 
V.  Marshall  Creamery  Co.,  118  Iowa  595,  92  N.  W.  706,  60  L.  R.  A. 
399,  96  A.  S.  R.  412;  Bullock  v.  Cutting,  140  N.  Y.  S.  686,  notice 
in  the  alternative,  no  objection  being  made  by  optionor. 

zKean  v.  Story  &  Clark  Piano  Co.,  121  Minn.  198,  140  N.  W.  1031; 
Sanders  v.  Middleton,  112  Me.  433,  92  Atl.  488;  Remm  v.  Landou. 
43  Ind.  App.  91,  86  N.  E.  973;  Quinn  v.  Valiquette,  80  Vt.  434, 
68  Atl.  515;   see  Bockmann  v.  Davis,  172  HI.  App.  505. 


411  ELECTION — WAI\T:R  AND  ESTOPPEL  §  869 

that  lie  intended  to  keep  the  coal  covered  by  the 
option,  was  a  waiver  of  further  notice.^ 

An  optionor  who  agrees  to  extend  the  time  limit 
of  the  option  and  then  puts  the  optionee  off  his 
guard,  will  be  estopped  from  taking  advantage  of 
an  election  within  the  time  limit  first  agreed  upon, 
and  the  optionee  will  have  the  extended  time  within 
which  to  elect.'' 

So,  when  the  optionor  evades  tender,  or  causes 
the  optionee  to  be  misled  as  to  his  rights,^  or  deals 
with  the  optionee  after  the  expiration  of  the  option 
time,^  or  treats  and  recognizes  the  election  as  suf- 
ficient. "^ 

Where  a  deed  provides  for  a  repurchase  of  the 
property  by  the  grantor  within  two  years,  the 
option  to  repurchase  survives  after  such  time  when 
the  grantee  receives  remittances  on  the  investment, 

3  Jones  V.   Sowers,   204  Pa.   329,   54   Atl.    169,   in  this  case  it   will   be 

observed  there  was  in  effect  a  timely  oral  election,  but  it  was  not 
in  writing  as  required.  The  refusal  waived  the  formal  written  notice, 
the  court  holding  that  written  notice  could  be  waived  by  parol. 

4  Longfellow  v.  Moore,  102  HI.  289, 

5  Brewer  v.  Sowers,  118  Md.  681,  86  Atl.  228 ;  Guilford  v.  Mason,  22  R.  I. 

422,  48  Atl.  386;  L'Engle  v.  Overstreet,  61  Fla.  653,  55  So.  381; 
Cook  V.  Jones,  96  Ky.  283,  28  S.  W.  9G0,  16  Ky.  L.  Rep.  469. 
Oral  agreement  fixing  time  and  place  of  election  and  failure  of  optionor 
to  keep  appointment,  Fletcher  v.  Painter,  81  Kan.  195,  105  P.  500. 

eMcCarty  v.  Helbling,  (Ore.)  144  P.  499;  Lester  v.  Hutson,  (Tex.  Civ, 
App.)  167  S.  W.  321;  Morrell  v.  Studd,  83  L.  J.  Ch.  114  (1913), 
2  Ch.  648,  109  L.  T.  628. 

7  McCowen  v.  Pew,  18  Cal.  App.  302,  123  P.  191,  199,  it  was  claimed 
the  election  was  conditional;  see,  also.  Gates  v.  McNeU,  (Cal.) 
147  P.  944,  holding  failure  of  optionor  to  object  to  alleged  conditional 
election,  was  waiver;  also,  Cape  Fear  L.  Co.  v.  Small,  84  S,  C.  434, 
66  S.  E.  880. 


§  870  LAW    OF    OPTION    CONTRACTS  412 

though  at  a  lower  per  cent  than  provided  in  the 
deed.^ 

Sec.  870.  WAIVER  AND  ESTOPPEL.  CASES 
HOLDING  ACTS  NOT  WAIVER.— Notice  by  a 
lessor  (the  lease  containing  an  option  to  purchase) 
prior  to  the  expiration  of  the  time  limit,  that  he 
would  not  convey,  does  not  excuse  an  election  and 
notice  by  the  optionee.  The  court  said  that  until 
*' acceptance"  of  the  option,  no  contract  of  pur- 
chase existed,  nor  any  obligation  on  the  part  of  the 
optionor  to  convey.^ 

So,  the  failure  of  the  optionor  (of  land)  to  tender 
an  abstract  of  title  as  he  agreed  to  do,  does  not 
relieve  the  optionee  from  the  necessity  of  election 
and  notice  within  the  time  limit.  The  court  said 
the  election  or  offer  to  perform  was  a  condition 
precedent  to  the  optionee's  right  to  specific  per- 
formance.^ 

The  fact  that  the  optionor,  after  the  expiration 
of  the  time  limit  of  the  option,  expressed  a  willing- 
ness to  perform,  does  not  amount  to  a  waiver.^  Nor 

8  Connolly  v.  Keenan,  87  N.  Y.  S.  630,  42  Misc.  R.  589. 

1  Tilton  V.  SterUng  C.  Co.,  28  Utah  173,  77  P.  758,  107  A.  S.  R.  689; 
also,  Abbott  v.  76  Land  Co.,  101  Cal.  567,  53  P.  445, 

2Kelsey  v.  Crowther,  162  U.  S.  404,  40  L.  Ed.  1017,  16  S.  Ct.  SOS, 
affirming  s.  c.  7  Utah  519,  27  P.  695,  and  lays  down  the  rule  that 
a  default  or  failure  of  the  optionor  does  not  excuse  an  election  by 
the  optionee;  Hessell  v.  Neal,  25  Colo.  App.  300,  137  P.  72;  Brooke 
V.  Garrod,  3  Kay.  &  J.  608,  2  DeG.  &  J.  66,  69  Eng.  Reprint  1252; 
see  Crawford  v.  Toogood,  L.  R.  13  Ch.  Div.  153. 

8  Codding  v.  Wamsley,  4  N.  Y.  Sup.  Ct.  Rep.  (4  Tomp.  &  C.)  49, 
1  Hun.  585. 


41S  ELECTION — EFFECT  OP  §  871 

does  the  fact  that  the  optionor  served  notice  of 
forfeiture  after  breach  on  the  part  of  the  optionee.* 
Failure  of  the  lessor  to  mention  the  non-receipt 
of  notice  of  renewal  of  the  lease  after  the  expira- 
tion of  the  term,  when  approached  by  the  optionee 
with  reference  to  repairs,  does  not  constitute 
waiver  of  notice  of  renewal.^ 


Sec.  871.  EFFECT  OF  SUFFICIENT  OR 
INSUFFICIENT  ELECTION.— The  effect  of  a 
sufficient  and  timely  election  and  notice  is  to  con- 
vert the  option  into  a  binding  promise  on  the  part 
of  the  optionor  to  convey,  and  this  results  whether 
or  not  the  option  contract  is  supported  by  a  con- 
sideration.^ 

4  Low  V.  Young,  158  Iowa  15,  138  N.  W.  828;  or  failed  to  object  until 
advised  of  this  right  under  the  option,  Neill  v.  Hitchman,  201  Pa. 
207,  50  Atl.  987. 

SBluthenthal  v.  Atkinson,  93  Ark.  252,  124  S.  W.  510. 

To  amount  to  waiver  of  tender  of  return  of  share  of  stock  to  seller 
there  must  be  a  distinct  and  absolute  refusal  to  perform  and  it 
must  be  so  treated  by  the  adverse  party,  Alexander  v.  Bosworth, 
(Cal.  App.)   147  P.  607. 

1  See,  Linn  v.  McLean,  80  Ala.  360 ;  Smith  v.  Post,  167  Cal.  69,  138  P. 
705;  Walter  G.  Reese  Co.  v.  House,  162  Cal.  740,  124  P.  442;  Smith 
V.  Bangham,  156  Cal.  359,  104  P.  689,  28  L.  R.  A.  (N.  S.)  522; 
McCowen  v.  Pew,  18  Cal.  App.  302,  123  P.  191 ;  Rheingans  v.  Smith, 
161  Cal.  362,  119  P.  494,  Ann.  Cas.  1913B,  1140;  Vassault  v.  Ed- 
wards, 43  Cal.  458;  Copp  v.  Longstreet,  5  Colo.  App.  282,  38  P.  601, 
option  is  merged  into  contract  of  sale  and  purchase;  Nutmeg  etc. 
Corp.  V.  Fiske,  81  Conn.  463,  71  Atl.  499,  renewal  of  lease;  South  Flor- 
ida etc.  Co.  V.  Walden,  59  Fla.  606,  51  So.  554;  Simpson  v.  Sanders, 
130  Ga.  265,  60  S.  E.  541;  Carter  v.  Love,  206  111.  310,  69  N.  E.  85; 
Perkins  v.  Hadsell,  50  111.  216;  Rampton  v.  Dobson,  156  Iowa  315,  136 
N.  W.  682;  McFarland  v.  McCormick,  114  Iowa  368,  86  N.  W.  369; 
Goodpaster  v.  Porter,  11  Iowa  161;  King  v.  Raab,  123  Iowa  632,  99 
N.  W.  306,  lease  and  option;  Chadsey  v.  Condley,  62  Kan.  853,  62  P. 
663;  Murphy  T.  &  Co.  v.  Reid,  125  Ky.  585,  101  S.  W.  964,  31  Ky.  L. 
Rep.  176,  10  L.  R.  A.   (N.  S.)    195;   Green  etc.  Min.  Co.  v.  Brown, 


§  871  LAW    OF    OPTION    CONTRACTS  414 

If  the  election  is  one  which  in  form  meets  the 
requirements  of  the  Statute  of  Frauds,  then,  it 
would  seem,  that  by  such  an  election  the  option  is 
turned  into  an  executory  contract  with  mutual 
obligations  on  the  parties  as  in  other  bilateral  con- 
tracts.^ 

Under  an  option  to  purchase,  the  effect  of  lack 
of  sufficient  or  timely  election  and  notice  is  to  end 
the  option  rights  of  both  parties  under  the  option.^ 

140  Ky.  332,  131  S.  W.  13,  mining  privileges;  Thomas  v.  Gottlieb 
etc.  Co.,  102  Md.  417,  62  Atl.  633;  Boston  etc.  R.  Co.  v.  Rose. 
194  Mass.  142,  80  N.  E.  498 ;  Gustin  v.  Union  School  Dist.,  94  Mich. 
502,  54  N.  W.  156,  34  A.  S.  R.  361;  Cooper  v.  Lansing  Wheel  Co., 
94  Mich.  272,  54  N.  W.  39,  34  A.  S.  R.  341 ;  Ide  v.  Leiser,  10  Mont. 
5,  24  P.  695,  24  A.  S.  R.  17;  Raiche  v.  Morrison,  47  Mout.  127, 
130  P.  1074;  Donahue  v.  Potter  etc.  Co.,  63  Neb.  128,  88  N.  W.  171  ; 
Bryant  Timber  Co.  v.  Wilson,  151  N.  C.  154,  65  S.  E.  932;  Brooks 
V.  Wentz,  61  N.  J.  Eq.  474,  49  Atl.  147;  Delaware  Trust  Co.  v. 
Calm,  195  N.  Y.  231,  88  N.  E.  53;  Benedict  v.  Pincus,  191  N.  Y. 
377,  84  N.  E.  284;  Paddock  v.  Davenport,  107  N.  C.  710,  12  S.  E. 
464;  Beddow  v.  Flage,  22  N.  D.  53,  132  N.  W.  637;  Friendly  v. 
Elwert,  57  Ore.  599,  105  P.  404,  112  P.  1085,  Ann.  Caa.  1913A,  357 ; 
Penn  Min.  Co.  v.  Martin,  210  Pa.  53,  59  Atl.  436;  Penn  Min.  Co.  v. 
Smith,  210  Pa.  49,  59  Atl.  316;  Boyer  v.  Nesbitt,  227  Pa.  398,  76  Atl. 
103;  Fessler's  Appeal,  75  Pa.  483,  499;  Newell's  Appeal,  100  Pa.  513; 
Bradford  v.  Foster,  87  Tenn.  4,  9  S.  W.  195 ;  Witherspoon  v.  Staley, 
(Tex.  Civ.  App.)  156  S.  W.  557;  Pollock  v.  Brookover,  60  W.  Va.  75, 
53  S.  E.  795,  6  L.  R.  A.  (N.  S.)  403;  Watson  v.  Coast,  35  W.  Va. 
463,  14  S.  E.  249 ;  Cheney  v.  Cook,  7  Wis.  413 ;  Frank  v.  Stratf  ord- 
Handcock,  13  Wyo.  37,  77  P.  134,  110  A.  S.  R.  963,  67  L.  R.  A.  571 ; 
Castle  Creek  W.  Co.  v.  City  of  Aspen,  146  Fed.  8,  76  C.  C.  A.  516, 
8  Ann.  Cas.  660;  Johnston  v.  Trippe,  33  Fed.  530;  Couch  v.  McCoy, 
138  Fed.  696;  Brown  v.  Slee,  103  U.  S.  828,  26  L.  Ed.  618;  Minne- 
apolis etc.  Ry.  Co.  v.  Columbus  etc.  Co.,  119  U.  S.  149,  30  L.  Ed. 
376,  7  S.  Ct.  168;  Willard  v.  Tayloe,  8  Wall.  (U.  S.)  557,  19 
L.  Ed.  501. 

2  Sees.  416,  417. 

B  Harper  v.  Independence  Dev.  Co.,  13  Ariz.  176,  108  P.  701 ;  Indiana 
etc.  L.  Co.  V.  Pharr,  82  Ark.  573,  102  S.  W.  686;  Larned  v.  Went- 
worth,  114  Ga.  208,  39  S.  E.  855;  Sutherland  v.  Parkins,  75  111.  338; 
Spafford  v.  Hedges,  231  HI.  140,  83  N.  E.  129;  Bashor  v.  Cady, 
2  Ind.  582;  O'Neill  v.  Risinger,  77  Kan.  63,  93  P.  340,  oU  and  gas 


415  ELECTION — ^EFFECT  OP  §  871 

However,  if  the  option  is  one  of  sale  and  return  the 
effect  is  directly  the  opposite :  the  sale  is  completed 
as  a  general  rule  by  failure  to  elect  to  return  in 
time.* 

An  election  once  made  can  not  be  withdrawn  by 
the  optionee^  unless,  of  course,  the  optionor  refuses 
to  perform  or  otherwise  breaches  the  contract.^ 

The  primary  obligation  on  the  part  of  the 
optionor  upon  proper  and  timely  election,  is  to 

option;  Stembridge  v.  Stembridge,  87  Ky.  91,  7  S.  W.  611,  9  Ky.  L. 
Kep.  948;  Noe  v.  Saylor,  143  Ky.  254,  136  S.  W.  209;  Jennings  etc. 
Syndicate  v.  Oil  Co.,  119  La.  793,  44  So.  481;  Cameron  v.  Shumway, 
149  Mich.  634,  113  N.  W.  287,  extension;  Hollmann  v.  Conlon, 
143  Mo.  369,  45  S.  W.  275;  Watkins  v.  YouU,  70  Neb.  81,  96  N.  W. 
1042;  Jeffreys  v.  Charlton,  72  N.  J.  Eq.  340,  65  Atl.  711;  Page  v. 
Shainwald,  169  N.  Y.  246,  62  N.  E.  356,  return ;  Atlantic  Product  Co. 
V.  Dunn,  142  N.  C.  471,  55  S.  E.  299,  lease  and  option;  Barnes  v. 
Eea,  219  Pa.  279,  68  Atl.  836;  Connor  v.  Renneker,  25  S.  C.  514; 
Kruegel  v.  Berry,  75  Tex,  230,  9  S.  W.  863;  Tilton  v.  Sterling  C. 
Co.,  28  Utah  173,  77  P.  758,  107  A.  S.  R.  689;  Haskins  v.  Dem, 
19  Utah  89,  56  P.  953 ;  Fulton  v.  Messenger,  61  W.  Va.  477,  56  S.  E. 
830 ;  Cummings  v.  Town  of  Lake  Realty  Co.,  86  Wis.  382,  57  N.  W. 
43;  Richardson  v.  Hardwick,  106  U.  S.  252,  27  L.  Ed.  145,  1  S.  Ct. 
213;  McConkey  v.  Peach  etc.  Co.,  68  Fed.  830,  16  C.  C.  A.  8, 
affirmed,  161  U.  S.  500,  40  L.  Ed.  786,  16  S.  Ct.  640,  does  not  bind 
optionor  to  sell;  Ranelagh  v.  Melton,  34  L.  J,  Ch.  227,  11  L.  T.  Rep. 
409,  13  Wkly.  Rep.  150,  62  Eng.  Reprint  627. 

3  Where,  after  defendant's  inability  to  perform  a  contract  to  buy  land, 

he  was  given  a  lease  and  option  to  purchase,  his  failure  to  exercise 
such  option  terminated  all  his  right  to  the  land.  Stone  v.  Powell, 
(Iowa)    150  N.  W.  15. 

4  Guss  V.  Nelson,  200  U.  S.  298,  50  L.  Ed.  489,  26  S.  Ct.  260,  affirmed, 

s.  c.  14  Okl.  296,  78  P.  170;  see  Sees.  828,  830,  853. 

5  Burner  v.  Burner,  115  W.  Va.  484,  79  S.   E.  1050;   Linn  v.  McLean, 

80  Ala.  360,  deposit  in  post-office;  Collins  v.  Whigham,  58  Ala.  438; 
Cherryvale  Water  Co,  v.  Cherryvale,  65  Kan.  219,  69  P,  176,  failure 
of  water  supply  after  election;  Castle  Creek  W.  Co,  v.  City  of 
Aspen,  146  Fed.  8,  76  C,  C.  A.  516,  8  Ann.  Cas.  660,  estoppel  to 
choose  another  alternative  optional  provision;  withdrawal  by  one  of 
several  optionees,  Burton  v.  Shotwell,  76  Ky.  271. 

6  Corson  v.  Mulvany,  49  Pa.  88,  88  Am.  Dec.  485, 


§  872  LAW   OF    OPTION    CONTRACTS  416 

convey  the  propei'ty  and  to  perform  the  agreement 
on  his  part  with  reference  to  the  conveyance  of  the 
title,  which  usually,  in  addition  to  a  deed  of  convey- 
ance, consists  of  the  furnishing  of  an  abstract  or 
certificate  of  title,  removal  of  encumbrances,  giving 
possession,  etc.  These  subjects  as  far  as  they  relate 
to  the  option  agreement,  will  be  presented  later  on. 

The  obligation  on  the  part  of  the  optionee  is  to 
pay  the  price  in  accordance  with  the  terms  of  the 
agreement,  a  subject  which  will  be  treated  in  the 
next  chapter. 

Sec.  872.  SAME.  MISCELLANEOUS  CASES. 
— The  decisions  cited  in  the  notes  to  the  next  pre- 
ceding section  do  not  disclose  any  facts  justifying 
an  extended  presentation.  They  all  hold  to  the  rules 
announced.  There  are  a  few  decisions,  however, 
exhibiting  facts  to  which  attention  should  be  called. 

When  the  option  is  without  time  limit,  upon  the 
expiration  of  a  reasonable  time,  it  may  be  revoked, 
and  a  sale  thereafter  of  the  stock  by  the  optionor, 
at  an  advanced  price,  gives  the  optionee  no  interest 
therein.^ 

Upon  election  to  renew  a  lease  on  the  same  terms, 
the  lessee  holds  under  the  original  lease  and  not 
under  the  notice,  as  the  effect  of  the  notice  is  merely 
to  extend  the  term  of  the  original  lease.  ^ 

Upon  exercise  of  his  option,  the  optionee  becomes 
the  equitable  owner  of  the  land  and  the  optionor 

1  Rees  V.  Pellow,  97  Fed.  167,  38  C.  C.  A.  94. 

2  Wiener  v.  Graff  &  Co.,  7  Cal.  App.  580,  95  P.  167 ;  Bettens  v.  Hoover, 

12  Cal.  App.  313,  107  P.  329;   see  Sees.  831,  834. 


417  ELECTION — EFFECT  OP  §  872 

the  equitable  owner  of  the  purchase  money.'  This 
is  in  accordance  with  the  general  rule  relating  to 
agreements  of  sale  and  purchase.  Prior  to  election, 
however,  the  optionee  is  not  an  equitable  owner 
within  the  rule.^  When  an  option  is  contained  in 
the  lease,  an  election  to  purchase  under  the  option 
and  tender,  ends  the  lease  and  the  rent  thereunder.^ 

A  mining  agreement  providing  for  the  payment 
of  the  price  in  installments  is  not  a  continuing  offer 
as  each  pajrment  is  made,  but  on  the  first  payment, 
it  becomes  a  contract  of  sale.^  The  optionee  is  not 
entitled  to  possession  of  the  property  in  the  absence 
of  an  express  stipulation  to  that  effect,  at  least  until 
he  makes  tender  and  demands  deed.'^ 

Due  and  timely  exercise  of  the  option  cuts  oif  the 
right  of  the  wife  of  the  optionor  to  declare  a  home- 
stead on  the  land,  and  separate  property  of  her 
husband  (optionor),  with  knowledge  of  a  prior 
option  agreement  for  its  sale  by  her  husband,  and  it 
is  immaterial  whether  the  optionee  exercised  his 
option  to  purchase  before  or  after  the  declaration 
of  homestead  was  filed  for  record.* 

3  Waters  v.  Bew,  52  N.  J.  Eq.  787,  29  Atl.  590. 

Relation  of  vendor  and  vendee  does  not  arise  until  election.  Waterman 
V.  Banks,  144  U.  S.  394,  36  L.  Ed.  479,  12  S.  Ct.  646;  see  Sec.  514. 

4  See  Sec.  502. 

5  See  Sec.  519. 

6  Reed  v.  Hickey,   13  Cal.  App.  136,   109  P.  38;   see  Obery  v.  Lander, 

179  Mass.  125,  60   N.  E.  378,  payment  of  installment  of  price  on 
three  lots  of  stock. 

7  Frank  v.  Stratford-Handcoek,   13  Wyo.  37,   77  P.   134,   110   A.   S.  R. 

963,  67  L.  R.  A.  571;  Jersey  City  v.  Flynn,  74  X.  J.  Eq.  104,  70  Atl, 
497;   see  See.  513. 

8  Smith  V.  Bangham,  156  Cal.  359,  104  P.  GS9,  £8  L.  R.  A.  (N.  S.)  522. 
27 — Option   Contracts. 


§  872  LAW  OF  OPTION  CONTRACTS  418 

The  doctrine  of  forfeiture  peculiar  to  land  con- 
tracts has  no  application  to  an  option  not  raised  to 
a  bilateral  contract  by  election.  Upon  its  expira- 
tion without  election,  the  option  is  at  an  end.  There 
is  nothing  to  forfeit  at  the  time  election  is  due  to 
be  made,^  and  an  expired  option  contract  can  not 
be  revived  except  upon  proof  of  a  new  contract.^" 

9  Election  is  a  condition  precedent ;   no  estate  can  vest  if  not  made ; 
it  is  not  a  condition  subsequent,  Bluthenthal  v.  Atkinson,   93  Ark. 
252,  124  S.  W.  510,  512. 
Payments  made  by  optionee  are  forfeited  to  optionor,  even  without 

notice,  Commercial  Bank  v.  Weldon,   148  Cal.  601,  84  P.   171. 
Where  the  optionee  failed  timely  to  elect  he  can  not  claim  that  the 
optionor   breached   the   agreement   by   his   inability   to   give   a    fee, 
simple  title,  the  optionor  having  only  a  bond  for  title,  Kingsley  T. 
Kressly,  60  Ore.  167,  118  P.  678,  Ann.  Gas.  1913E,  746. 

10  Page  V.  Shainwald,  169  N.  Y.  246,  62  N.  E.  356. 


CHAPTEE  IX. 

PAYMENT  AND  TENDER. 

Sec.  901.     Generally. 

Sec.  902.     By  whom  payment  or  tender  may  be  made. 

Sec.  903.     To  whom  payment  or  tender  may  be  made. 

Sec.  904.     Place   of  payment  or  tender. 

Sec.  905.     Place  of  payment  or  tender,  continued. 

Sec.  906.     Sufficiency  of  tender. 

Sec.  907.     Sufficiency  of  tender,  continued.    Cases. 

Sec.  908.     Amount  of  payment  or  tender.    Generally. 

Sec.  909.     Amount  of  payment  or  tender.    Interest,  taxes,  rents,  insur- 
ance, etc. 

Sec.  910.     Amount  of  payment  or  tender.    The  same. 

Sec.  911.     Amount  of  payment  or  tender  under  arbitration  and   valua- 
tion clauses. 

Sec.  912.     Failure  to  object  as  waiver  of  form,  mode  and  amount. 

Sec.  913.     Time  of  payment.    Generally.     (Fixed  time.) 

Sec.  914.     Time  of   payment.    Payment  as  election   distinguished  from 
payment  as  performance. 

Sec.  915.     Same.    Cases  holding  payment  not  necessary  to  election. 

Sec.  916.     Same.   Cases  holding  payment  or  tender  necessary  to  election. 

Sec.  917.     The  same,  continued. 

Sec.  918.     Time  of  payment.    Construction  of  particular  clausea. 

Sec.  919.     Time  of  payment  not  of  the  essence,  when. 

Sec.  920.     Time  of  payment  essential.    Generally. 

Sec.  921.     Same.    Delivery  of  deed  and  payment  of  price  as  concurrent 
acts. 

Sec.  922.     Same.    Delivery  of  deed  and  payment  of  price  as  concurrent 
acts,  continued. 

Sec.  923.     Time  of  payment.    Waiver  and  estoppel.    Generally. 

Sec.  924.     Waiver  and  estoppel.    Payment  considered  as  act  of  election. 

Sec.  925.     Same.    Cases  holding  payment  or  tender  necessary. 

Sec.  926.     The  same.     Cases  holding  payment  or  tender  not  necessary. 

Sec.  927.     Time  of  payment.    Waiver.    Nature  and  essentials  of  acts  to 
constitute. 

Sec.  928.     Time  of  payment.   Waiver  and  estoppel.   Conduct  of  optionor. 
Generally. 

(419) 


LAW   OF   OPTION    CONTRACTS  420 

Sec.  929.     Same,  continued. 

Sec.  930.  Time  of  payment.  Waiver  and  estoppel.  Refusal  and  repudia- 
tion by  optionor.    Generally. 

Sec.  931.     Time  of  payment.   Waiver  by  accepting  past  due  payments. 

Sec.  932.     Time  of  payment.   Waiver  by  recognition  of  optionee's  rights. 

Sec.  933.  Time  of  payment.  Waiver  and  estoppel.  Evasion  by  optionor 
and  absence. 

Sec.  934.  Time  of  payment.  Waiver  arising  under  options  like  ' '  first 
refusals. ' ' 

Sec.  935.     Time  of  payment.    Waiver  by  one  joint  optionor. 

Sec.  936.  Time  of  payment.  Waiver.  Effect  of  encumbrances,  dower 
right,  etc. 

Sec.  937.     Time  of  payment.    Death  of  optionor. 

Sec.  938.     Time  of  payment.    Accident  and  mistake. 

Sec.  939.     Time  of  payment.     Waiver   under   agreement    for    extension. 

Sec.  940.  Time  of  payment.  Waiver.  Effect  of  possession  and  improve- 
ments by  optionee. 

Sec.  941.     Time  of  payment.    Waiver.    Effect  of  part  performance. 

Sec.  942.  Time  of  payment.  Tender  in  pleadings  and  miscellaneous 
cases. 

Sec.  943.     Effect  of  payment  or  tender. 


421  PAYMENT  AND  TENDER  §§  901,  902 

Section  901.  GENERALLY.— An  option  con- 
tract is  brought  into  legal  existence  by  an  offer  of 
one  person  to  sell  an  option  privilege  on  property, 
to  another,  and  the  acceptance  of  that  offer,  by  the 
latter,  there  being  a  consideration  to  support  the 
contract.  The  option  is  raised  to  a  binding  promise 
on  the  part  of  the  optionor  to  sell,  by  a  timely  and 
proper  exercise  of  the  option  privilege  to  purchase. 
The  next  and  usually  the  final,  but  necessary  step 
in  the  perfection  of  the  optionee's  right  to  enforce 
the  contract  thus  raised  is  payment  or  tender  of  the 
purchase  price  of  the  property.^  These  subjects, 
except  the  last,  have  been  presented  in  preceding 
chapters  and  we  are  now  brought  to  a  consideration 
of  this  last  step,  one  which  involves  the  person  by 
whom  and  to  whom  payment  or  tender  may  be 
made,  the  amount  of  payment  or  tender,  and  the 
place  where  and  the  time  when  it  must  be  made. 
To  this  must  be  added  the  very  important  subjects 
of  waiver  and  estoppel,  and  reference  must  be  made 
again  to  the  distinction  between  payment  as  an  act 
of  election  necessary  to  turn  the  option  into  a  bind- 
ing promise,  and  payment  as  an  act  in  the  perform- 
ance of  the  contract  thus  raised. 

Sec.  902.  BY  WHOM  PAYMENT  OR  TEN- 
DER MAY  BE  MADE.— Payment  or  tender  may 
be  made  by  the  optionee  himself,  by  any  person 

1  Deitz  V.  Stephenson,  51  Ore.  596,  95  P.  803. 

Thomas  v.  Kelly,  3  S.  C.  (3  Rich.)  210,  16  Am.  Rep.  716,  ease  where 
optionee  under  will  failed  to  pay  the  appraised  value  of  the  planta- 
tion. 


§  902  LAW  OP   OPTION   CONTRACTS  422 

authorized  by  Mm/  by  his  assignee,^  or  by  any  other 
person  who  has  assumed  the  obligation  of  making 
payment.^  It  may  also  be  made  by  the  personal 
representative  of  the  deceased  optionee.*  The  right 
of  a  joint  tenant  or  of  a  tenant  in  common  to  make 
payment  and  tender  on  behalf  of  all  the  other  ten- 
ants must  be  determined  from  the  terms  of  the 
contract  between  them.  Under  an  ordinary  bilat- 
eral contract  where  the  several  tenants  are  bound 
to  make  pa}^nent,  the  rule  is,  that  any  one  of  the 
several  co-tenants  may  make  payment  or  tender 
on  behalf  of  all.^  Under  an  option  contract,  if  the 
election  has  already  been  timely  and  properly  made 
so  as  to  bind  all  of  the  tenants  to  perform,  it  would 
seem  that  any  one  of  the  tenants  may  make  pay- 
ment or  tender  on  behalf  of  all.  Where  election  has 
not  been  made  by  all  the  tenants,  or  where  payment 

1  It  may  not  be  made  by  a  stranger  unless  at  the  time  the  optionor  is 

informed  on  whose  behalf  the  tender  is  made,  Mahler  v.  Newbaur, 
32  Gal.  168,  91  Am.  Dec.  571. 
Tender  is  good  though  not  stated  whether  it  is  made  by  the  debtor, 
his  purchaser,  or  agent,  Johnston  v.  Gray,  16  Serg.  &  R.  (Pa.)  361, 
16  Am.  Dec.  577 ;  Wyllie  v.  Matthews,  60  Iowa  187,  14  N.  W.  232 ; 
Keystone  L.  etc.  Co.  v.  Jenkinson,  69  Mich.  220,  37  N.  W.  198; 
McDougald  v.  Dougherty,  11  Ga.  570. 

2  See  Harrington  v.  Barnes,  64  Mass.  (10  Gush.)   106;  Blair  v.  Hamilton, 

48  Ind.  32. 
But  assignee  may  not  substitute  his  own  notes  for  deferred  payments, 
Rice  V.  Gibbs,  40  Neb.  264,  58  N.  W.  724. 

3  Bell  V.  Mendenhall,  71  Minn.  331,  73  N.  W.  1086. 

4  By  uncle  of  infant   good,   though  not  appointed  guardian.   Brown  v. 

Dysinger,  1  Rawle   (Pa.)   408. 

6  See  Gentry  v.  Gentry,  33  Tenn.  87,  60  Am.  Dee.  137,  tenant  in  common. 

Poehler  v.  Reese,  78  Minn.  71,  80  N.  W.  847,  case  where  tender  by  one 

tenant  in  common  was  held  sufficient  as  to  himself  and  other  tenants, 

they   being   minors;    see   Bender   v.   Bean,   52   Ark.    132,   12   S.  W. 

180,   241. 


423  PAYMENT  OR  TENDER — TO  WHOM  §  903 

in  itself  is  the  act  of  election,  it  is  probably  the 
rule,  by  weight  of  authority,  that  one  tenant  may 
not  make  tender  or  payment  on  behalf  of  all  so  as 
to  bind  any  tenant,  other  than  himself,  to  the  per- 
formance of  the  obligation.® 

Sec.  903.  TO  WHOM  PAYMENT  OR  TEN- 
DER ]\iAY  BE  MADE.— Pa\Tnent  or  tender  of  the 
price  must  be  made  to  the  person  named  in  the 
option.^  If  no  third  person  is  expressly  named  in 
the  option,  then  it  must  be  made  to  the  optionor  f 
unless  it  be  made  to  some  other  person  designated 
by  the  optionor,  or  impliedly  authorized  by  him  to 
receive  it.^  It  follows,  therefore,  that  payment  or 
tender  to  a  person  not  authorized  to  receive  it,  is 
insufficient.'* 

6  See  Sec.  805. 

1  Te  Poel  V.  Shutt,  57  Neb.  592,  78  N.  W.  288 ;  and  where  so  made,  is 

good,  Brewer  v.  Brewer,  19  Ala.  481. 

2  Hoyt  V.  Hall,  16  N.  Y.  Super.  Ct.  42 ;  King  v.  Finch,  60  Ind.  420. 

3  Hoyt  V.  Hall,  16  N.  Y.  Super.  Ct.  42,  third  person  designated ;  to  trustee 

for  collection  of  debts,  Hayward  v.  Munger,  14  Iowa  516 ;  to  trustee 
of  cestui  que  trust,  Chahoou  v.  Hollenbeck,  16  Serg.  &  R.  (Pa.)  425, 
16  Am.  Dec.  587;  Kleeb  v.  Mclnturff,  71  Wash.  419,  128  P.  1076; 
to  agent,  Stansbury  v.  Embrey,  128  Tenn.  103,  158  S.  W.  991, 
47  L.  R.  A.  (N.  S.)  980;  Lanz  v.  McLaughlin,  14  Minn.  72;  Deg- 
ginger  v.  Martin,  48  Wash.  1,  92  P.  674,  the  principal  being  absent 
from  the  state;  to  beneficiary  in  transaction  involving  fraud,  Harris 
V.  Staples,  (Tex.  Civ.  App.)  89  S.  W.  801;  to  oflBcer  of  corporation, 
Louisville  R.  Co.  v.  Williams,  33  Ky.  L.  Rep.  168,  109  S.  W.  874; 
Smith  V.  Old  Dominion  etc.  Ass'n,  119  N.  C.  257,  26  S.  E.  40; 
Birmingham  Paint  etc.  Co.  v.  Crampton,  (Ala.)  39  So.  1020;  Briede 
v.  Babst,  131  La.  159,  59  So.  106;  to  sheriff  under  process  of  law, 
Couchmans  v.  Boyd,  24  Ky.  395. 

4  Thurber  v.   Jewett,   3    Mich.    295,   servant;    McGuire   v.    Bradley,    118 

HI.  App.  59,  servant;  King  v.  Finch,  60  Ind.  420,  court  will  not 
relieve. 


§  903  LAW   OF   OPTION    CONTRACTS  424 

Where  there  are  several  joint  optionors,  pajTiient 
or  tender,  as  distinguished  from  election,  to  one  of 
them,  is  sufficient.^ 

Whether  payment  to  the  optionor's  grantee  of 
the  optioned  property  is  good,  would  seem  to 
depend  upon  the  terms  of  the  grant,  that  is  to  say, 
whether  by  the  terms  of  the  grant  the  grantee 
becomes  entitled  to  the  option  money  and  also 
whether  the  optionee  has  notice  of  the  transfer  and 
of  the  rights  of  the  grantee.® 

4  Deposit  in  bank  not  good,  Cassville  Roller  Mill  Co.  v.  Aetna  Ins.  Co., 

105  Mo.  App.  146,  79  S.  W.  720. 

To  wife  of  insane  party  not  sufficient,  Boyce  v.  Prichett's  Heirs, 
36  Ky.  (6  Dana)  231. 

5  Moore  v.  Bevier,  60  Minn.  240,  62  N.  W.  281. 

Tender  to  one  of  two  tenants  in  common  of  lands,  (the  wife  of  the 
optionor-tenant  under  a  contract  which  was  void  as  to  her  because 
not  separately  acknowledged,  etc.)  is  not  good  as  against  the  hus- 
band, Ledwith  v.  Reichard,  203  Pa.  277,  52  Atl.  251. 

6  See  Burt  v.  Henry,  10  Ala.  874,  tender  to  assignee  of  note  for  price. 

Harrington  v.  Barnes,  64  Mass.  (10  Gush.)  106,  tender  to  vendor  and 
not  to  his  grantee  under  conveyance  made  subsequent  to  bond  for 
title. 

McLaughlin  v.  Royce,  108  Iowa  254,  78  N.  W.  1105,  where  the  option 
to  *»;purchase  was  from  the  optionee's  grantee  (the  purchaser),  and 
his  heirs  and  assigns,  it  was  held  payment  must  be  made  to  the 
grantee's  grantee,  the  optionor  (the  original  grantor)  having  notice 
of  the  transfer. 

In  Frank  v.  Stratford-Handcock,  13  Wyo.  37,  77  P.  134,  67  L.  R.  A. 
571,  110  A.  S.  R.  963,  it  was  held  the  election  and  tender  were 
properly  made  to  the  original  optionor. 

Noyes  v.  Clark,  7  Paige  (N.  Y.)  179,  32  Am.  Dee.  620,  tender  to 
debtor  after  notice  of  assignment,  where  assignee's  residence  is 
unknown  and  he  can  not  be  found,  is  good. 

Mere  transfer  of  the  property  by  the  vendor  is  not  an  abandonment 
of  the  contract ;  there  is  no  privity  of  contract  between  the  pur- 
chaser and  the  grantee  of  the  vendor;  hence  it  is  necessary  to  make 
tender  to  vendor  to  put  him  in  default,  Parkside  Realty  Co.  v. 
MacDonald,  166  Cal.  426,  137  P.  21. 


425  PAYMENT  AND  TENDER — PLACE  OP  §  904 

Pa^Tnent  and  tender  to  the  personal  representa- 
tive of  a  deceased  optionor  is,  after  his  appoint- 
ment, generally  held  sufficient.^ 

Deposit  of  the  price  with  the  original  optionor 
with  notice  to  an  interA^ening  purchaser,  is  good.^ 

Sec.  904.  PLACE  OF  PAYMENT  OR  TEN- 
DER.— If  the  option  expressly  designates  the  place 
where  notice  of  election  shall  be  given  and  tender 
of  the  price  made,  notice  must  be  given  and  tender 
made  at  that  place,^  and  a  tender  made  at  such 
place  is  sufficient.^  On  the  other  hand,  if  the  place 
is  left  to  implication,  then  the  rule  is  that  the  tender 
must  be  made  at  the  place  where  the  option  agree- 
ment was  executed,^  and  at  the  residence  or  office 
of  the  optionor.* 

7  Parker  v.  Lincoln,  12  Mass.  16,  guardian ;  Todd  v.  Parker,  1  N.  J.  L.  45, 

before  qualification. 

But  where  option  fixes  place  of  tender,  one  made  there  is  good  though 
optionor  is  dead,  Mueller  v.  Nortmann,  116  Wis.  468,  93  N.  W.  538, 
96  A.  S.  E.  997. 

8  Horgan  v.  Eussell,  24  N.  D.  490,  140  N.  W.  99,  43  L.  R.  A.  (N.  S.)  1150. 

1  And  in  such  case  readiness  to  pay  at  the  place  is  sufficient,  Drown  v. 

Ingels,  3  Wash.  424,  28  P.  759.  But  refusal  to  receive  payment  or 
tender  at  a  place  other  than  that  fixed  by  the  agreement  is  a  waiver 
of  payment  at  the  stipulated  place,  see  Union  Mut.  L.  Ins.  Co.  v. 
Union  Mills  Plaster  Co.,  37  Fed.  286,  3  L.  R.  A.  90. 

2  Mueller  v.  Nortmann,  116  Wis.  468,  93  N.  W.  538,  96  A.  S.  R.  997;  Roche 

V.  Osborne,  (N.  J.  Eq.)  69  Atl.  176. 

3  Mossie  V.  Cyrus,  61  Ore.  17,  119  P.  485. 

4  Greenawalt  v.  Este,  40  Kan.  418,  19  P.  803;  Hinish  v.  Oliver,  66  Kan. 

282,  71  P.  520;  Herman  v.  Winter,  20  S.  D.  196,  105  N.  W.  457. 
The  general  rule  as  to  payment  of  money  is  that,  if  no  place  of  pay- 
ment is  specified  in  the  contract,  it  is  the  duty  of  the  debtor  to  seek 
the  creditor  and  make  payment  to  him  personally,  but  if  he  is  out 
of  the  state,  readiness  to  pay  within  the  state  will  be  as  effective 
as  valid  payment  so  far  as  forfeiture  is  concerned,  Hale  v.  Patton, 
60  N.  Y.  233,  19  Am.  Rep.  168. 


§  905  LAW    OF   OPTION    CONTRACTS  426 

Where  no  place  is  designated  in  tlie  option,  the 
optionor  may  determine  whether  the  payment  shall 
be  made  where  the  land  is  situated  or  at  his  resi- 
dence in  another  state.  ^ 

A  personal  tender  is  probably  good  in  every  case 
where  no  objection  is  made  by  the  optionor. 

Under  a  contract  for  the  sale  of  land,  situate  in 
Texas,  contained  in  a  letter  from  the  owner,  written 
from  his  home  in  Kentucky,  in  answer  to  an  inquiry 
of  plaintiff,  and  offering  to  sell  it  for  a  certain 
amount,  cash  in  hand,  plaintiff  must  make  or  tender 
payment  in  Kentucky,  the  place  of  residence  of  the 
proposed  vendor.* 

Sec.  905.  PLACE  OF  PAYMENT  OR  TEN- 
DER, CONTINUED.— Where  the  optionor  evades, 
tender  at  his  house  and  to  his  son  living  there  with 
him  is  good,^  notwithstanding  the  general  rule  that 
personal  tender  is  necessary. 

When  the  optionee,  on  the  day  of  the  maturity 
of  the  option,  visited  the  office  of  the  optionor  for 
the  purpose  of  consummating  the  trade,  and  so 
notified  the  person  in  charge,  the  optionor  being 
absent,  such  act  constituted  a  tender  of  ]3erform- 

6  Veith  V.  McMurtry,  26  Neb.  341,  42  N.  W.  6 ;  see  Sawyer  v.  Brossart, 
67  Iowa  678,  25  N.  W.  876,  56  A.  S.  R.  371,  residence  of  vendor. 

6  Scott  V.  Grant,  37  Tex.  Civ.  App.  169,  84  S.  W.  265;  see  Greenawalt  v. 
Este,  aupra;  Gilbert  v.  Baxter,  71  Iowa  327,  32  N.  W.  364;  De  Jonge 
V.  Hunt,  103  Mich.  94,  61  N.  W.  341 ;  Egger  v.  Nesbit,  122  Mo.  667, 
27  S.  W.  385,  43  A.  S.  R.  596;  Baker  v.  Holt,  56  Wis.  100,  14 
N.  W.  8;  Arnett  v.  Tuller,  134  Ga.  609,  68  S.  E.  330. 

1  Smith  V.  Smith,  25  Wend.  (N.  Y.)  405;  see  Stein  v.  Leeman,  161  Cal. 
502,  119  P.  663,  civil  code  Cal.  Sec.  1489;  Walter  G.  Reese  Co.  v. 
House,  162  Cal.  740,  124  P.  442,  good  at  residence;  Holmes  v.  Myles, 
141  Ala.  401,  37  So.  588,  letter  to  residence. 


427  PAYMENT  AND  TENDER SUFFICIENCY  OF  §  906 

ance.^  Where  the  optionor  died  before  the  expira- 
tion of  the  time  limit  a  tender  by  the  optionee  made 
at  the  place  specified  in  the  option  was  held  good.^ 

When  plaintiff  (notwithstanding  defendant's 
statement  that  he  would  not  convey)  called  at  the 
home  of  defendant  (vendor)  with  the  money  to 
make  the  payment  and  was  told  by  defendant's 
family  that  defendant  was  absent,  and  they  thought 
he  was  at  a  certain  place  out  of  the  state,  and  plain- 
tiff thereupon  sent  defendant  a  registered  letter 
and  deposited  the  money  in  the  bank,  instructing 
the  cashier  to  deliver  the  same  on  deposit  of  the 
deed,  the  tender  was  sufficient  and  enabled  plaintiff 
to  maintain  suit  for  specific  performance  under  the 
South  Dakota  statutes  relating  to  extinguishment 
and  performance  of  obligations.^ 

Sec.  906.  SUFFICIENCY  OF  TENDER.— 
Tender  is  an  offer  of  performance  by  a  debtor  or 
other  person  who  is  under  obligation  to  pay  the 
debt,  or  to  perform  the  obligation,  the  actual  pay- 
ment or  performance  being  prevented  by  the 
refusal  of  the  creditor  or  person  entitled  to  per- 
formance to  accept  the  same.^ 

2Lumaghi  v.  Abt,  126  Mo.  App.  221,  103  S.  W.  104;   Judd  v.  Ensign, 
6  Barb.   (N.  Y.)    258. 
And  where  the  option  designates  the  place  of  payment  as  the   office 
of  M,  a  tender  to  M  at  his  office  is  good,  Mueller  v.  Nortmann,  11(5 
Wis.  468,  93  N.  W.  538,  96  A.  S.  R.  997. 

8  Mueller  v.  Nortmann,  116  Wis.  408,  93  N.  W.  538,  96  A.  S.  R.  997,  but 
it  is  not  good  if  the  place  of  tender  was  not  the  one  fixed  by  the 
option,  Prince  v.  Robinson,   14  Fed.   631. 

4  Herman  v.  Winter,  20  S.  D.   196,  105  N.  W.  457. 

1  Cape  Fear  Lumber  Co.  v.  Small,  84  S.  C.  434,  66  S.  E.  880. 


§  906  LAW  OP   OPTION    CONTRACTS  428 

To  constitute  a  valid  tender  at  common  law  tlie 
party  must  have  the  money  at  hand,  immediately 
under  control  and  must  then  and  there  not  only  be 
ready  and  willing,  but  produce  and  offer  to  pay  the 
money  to  the  other  party  upon  performance  by 
him  of  the  requisite  conditions.^  Actual  production 
of  the  money,  however,  is  not  necessary  where  the 
party  to  whom  the  money  is  due  refuses  to  accept 
it,^  or  by  his  conduct  shows  an  intention  on  his  part 
not  to  accept  it.  In  such  cases,  if  the  debtor  has 
the  money  immediately  available,  at  the  time  of  his 
offer,  the  tender  is  good.'' 

A  tender  does  not  discharge  the  debt;  it  is  an 
offer  of  performance  only ;  the  creditor  still  has  the 
right  to  payment  of  the  money.  The  effect  of  a 
valid  tender,  however,  is  to  stop  interest  from  the 
date  of  the  tender,^  and  in  any  suit  to  recover  the 
amount  tendered,  in  which  the  debtor's  plea  of 
tender  is  sustained,  the  debtor  is  entitled  to  recover 
his  costs,^  and  the  creditor  obtains  judgment  only 
for  the  amount  tendered. 

2  Heine   v.    TreadweU,    72    Cal.    217,    13   P.    503,   505;    Shank   v.    Groflf, 

45  W.  Va.  543,  32  S.  E.  248 ;  Deitz  v.  Stephenson,  51  Ore.  596,  95 
P.  803,  ability  not  shown. 

3  See  note  1,  this  section;  Stephenson  v.  Kilpatrick,  166  Mo.  262,  65  S.  W. 

773 ;  Latimer  v.  Capay  Val.  L.  Co.,  137  Cal.  286,  70  P.  82 ;  Hoffman 
V.  Van  Dieman,   62  Wis.  362,  21  N.  W.  542,  evasion  of  tender. 
But  a  refusal  by  optionor  to  remain  at  his  office  while  optionee  pro- 
cured the  money  at  a  bank,  is  not  a  waiver,  Smith  &  Rice  Co.  v. 
Canady,  213  Mass.  122,  99  N.  E.  968. 

4  Actual  production  of  the  money  is  waived  when  the  tender  is  refused, 

the  ready  money  being  immediately  at  hand,   Steckel  v.   Standley, 
107  Iowa  694,  77  N.  W.  489. 

5  McPheters  v.  Kimball,  99  Me.  505,  59  Atl.  853 ;   Thompson  v.  Lyon, 

40  W.  Va.  87,  20  S.  E.  812. 

6  Berthold  v.  Eeyburn,  37  Mo.  586. 


429  PAYMENT  AND  TENDER — SUFFICIENCY  OF  §  907 

A  tender  to  be  valid  must  be  in  accordance  with 
the  stipulations  of  the  contract  and  at  the  time  and 
place  and  in  the  mode  therein  specified."^ 

The  technicalities  of  the  common  law  rule  do  not 
apply  where  delivery  of  the  stock  and  payment  of 
the  price  are  concurrent  acts.  In  such  case  readi- 
ness, willingness  and  ability  to  pay  are  sufficient 
especially  where  the  optionor  evades  and  no  par- 
ticular time  or  place  is  fixed  for  the  performance/ 
Nor,  is  an  actual  tender  necessary  where  the 
optionee  arranges  for  payment  with  the  bank  with 
which  the  optionor  had  deposited  the  deed  in 
escrow  to  be  taken  up  when  the  title  to  the  land 
should  be  perfected,  it  appearing  that  the  bank  was 
ready  to  pay  the  money  when  the  title  was  per- 
fected and  the  deed  should  be  ready  f er  delivery, 
and  it  further  appearing  that  an  actual  tender 
would  have  been  refused  by  the  vendor  if  made.^ 

Sec.  907.  SUFFICIENCY  OF  TENDER, 
CONTINUED.  CASES.— When  payment  is  a 
necessary  part  of  election  mere  readiness  on  the 
part  of  the  optionee  to  pay  is  not  sufficient.  The 
optionee  must  pay  the  monej^  as  directed  in  the 
option,  or  the  optionor  is  not  bound.  ^   Where  the 

7  See  Sees.  904,  913. 

8  Guilford  v.  Mason,  22  E.  I.  422,  48  Atl.  386;  nor  does  the  rule  apply 

where,  upon  election,  the  optionor  said  he  had  the  money  to  pay 
with  and  wanted  to  pay  but  the  optionee  said  he  did  not  want  the 
money  and  preferred  to  let  it ' '  lay, ' '  ^Tieatland  v.  Silsbee,  159  Mass. 
177,  34  N.  E.  192;  Boynton  v.  Woodbury,  101  Mass.  346,  agreement 
to  repurchase  shares  of  stock. 

SMeCarty  v.  Helbling,   (Ore.)   144  P.  499. 
1  Bundy  v.  Dare,  62  Iowa  295,  17  N.  W.  534. 


§  907  LAW    OF   OPTION    CONTRACTS  430 

price  of  the  land  is  fixed  at  a  certain  sum  per  acre, 
a  tender  in  the  language  of  the  option,  reciting  that 
the  optionee  is  able,  ready  and  willing  to  pay, 
though  not  stating  the  aggregate  amount,  is  suf- 
ficient.^ 

Tender  of  a  check  in  pa3anent  of  the  price  at  the 
bank  where  the  escrow  is  held,  which  is  refused  by 
the  optionor  but  which  the  cashier  then  offers  to 
cash  and  to  give  the  money  to  the  optionor,  is  good.^ 

When,  at  the  time  of  the  option,  the  currency 
consisted  only  of  gold  and  silver,  a  legal  tender  in 
payment  of  the  price  was  required  to  be  made  in 
gold  and  silver  only,  notwithstanding  the  act  of 
Congress  making  United  States  notes  legal  tender 
for  debts/ 

If  the  option  gives  the  privilege  of  paying  the 
whole  of  the  price  in  cash,  a  tender  of  the  price  in 
cash  is  sufficient  although  other  provisions  of  the 
option  with  reference  to  security  in  case  of  pay- 
ment of  the  price  partly  in  cash,  are  indefinite  and 
uncertain.^ 

Where,  in  an  option,  the  deferred  payments  are 
to  be  evidenced  by  a  note  and  secured  by  mortgage, 
a  tender  of  the  cash  paj^ment  without  tender  of  the 
note   and  mortgage   is   insufficient.^    Where   the 

2  Stein  V.  Leeman,  161  Cal.  502,   119  P.  663.    In  this  case  the  amount 

was  subsequently  tendered  in  court,  and  there  was  no  objection  to 
the  tender. 

3  Watkins  v.  Youll,  70  Neb.  81,  96  N.  W.  1042;  Kessler  v.  Pruitt,  14  Idaho 

175,  93  P.  965. 

4Willard  v.  Tayloe,  8  Wall.    (U.  S.)   557,  19  L.  Ed.  501. 

5  Beddow  v.  Flags,  22  N.  D.  53,  132  N.  W.  637. 

6  Longfellow  v.  Moore,  102  111.  289.    The  tender  here  spoken  of  is  tender 

necessary  to  entitle  optionee  to  a  conveyance,  and  not  tender  as  an 
act  of  election. 


431  PAYMENT  OR  TENDER — AMOUNT  OP  §  908 

optionees  are  minor  heirs  and  the  option  calls  for 
a  cash  payment  and  a  purchase  money  mortgage 
for  the  balance,  an  offer  of  the  cash  and  the  note 
and  mortgage  of  the  guardian  of  the  minors  author- 
ized by  the  court,  is  sufficient.'^ 

When  by  the  terms  of  the  contract  the  price  is  to 
be  paid  in  installments,  an  offer  by  a  purchaser  of 
a  lump  sum  is  not  a  legal  tender  and  does  not  place 
the  vendor  in  default.* 

Sec.  908.  AMOUNT  OF  PAYMENT  OR  TEN- 
DER. GENERALLY.— To  make  tender  good  it  is 
necessary,  of  course,  that  it  be  in  accordance  with 
the  provisions  of  the  option  contract.  A  tender  of 
money,  therefore,  for  a  less  amount  than  required 
by  the  option  is  not  sufficient,^  unless  excused  upon 

7  Ankeny  v.  Richardson,  187  Fed.  550,  109  C.  C.  A.  316. 

Assignee  of  optionee  may  not  substitute  his  own  note  for  that  of  the 
original  optionee,  Rice  v.  Gibbs,  40  Neb.  264,  58  N.  W.  724,  over- 
ruling s.  c.  33  Neb.  460,  50  N.  W.  436;  but  may  that  of  the 
assignor  and  himself,  Souffrain  v.  McDonald,  27  Ind.  269. 

8  Hanson  v.  Fox,  1.55  Cal.  106,  99  P.  489,  29  L.  R.  A.   (N.  S.)   338. 

1  Bennett  v.  Farkas,  126  Ga.  228,  54  S.  E.  942 ;  see  Rude  v.  Levy, 
43  Colo.  482,  96  P.  560,  24  L.  R.  A.  (N.  S.)  91,  127  A.  S.  R.  123; 
Champion  G.  Min.  Co.  v.  Champion  Mines,  164  Cal.  205,  128  P.  315. 

Part  payment  is  not  sufficient,  and  tender  of  the  balance  after  the 
expiration  of  the  time  limit  is  too  late,  Binford  v.  Steele,  161  N.  C. 
660,  77  S.  E.  954;  see  Fink  v.  Hough,  (Tex.  Civ.  App.)  153  S.  W. 
676;  Horgau  v.  Russell,  24  N.  D.  490,  140  N.  W.  99,  43  L.  R.  A. 
(N.  S.)  1150,  where  the  amount  of  outstanding  mortgage  was 
deducted  from  the  tender,  Brewer  v.  Sowers,  118  Md.  681,  86  Atl. 
228,  where  amount  of  mortgage  was  paid  into  court ;  allowance  for 
street  where  price  is  by  the  acre,  Sterricker  v.  McBride,  157  111.  70, 
41  N.  E.  744. 

On  the  facts  a  tender  of  the  cash  portion  of  the  price  less  an 
amount  necessary  to  clear  encumbrances  on  the  property  is  sufficient, 
especially  where  the  optionor  claims  he  is  not  bound  by  the  option, 
Murphy  v.  Hussey,  117  Tja.  390,  41  So.  692;  Brewer  v.  Sowers,  supra. 


§  908  LAW   OF   OPTION   CONTRACTS  432 

some  equitable  ground,  such  as  evasion  by  the 
optionor.^ 

An  option  on  land  at  $4  per  acre  "for  an  undi- 
vided one-half  of  all  of  said  described  lands"  was 
construed  as  requiring  the  optionee  to  pay  $4  per 
acre  for  the  entire  area  in  order  to  acquire  an 
undivided  half  interest  therein.^ 

When  the  price  is  fixed  at  a  certain  sum  per  acre 
and  the  option  describes  the  land  by  metes  and 
distances  and  recites  that  it  contains  410  acres 
"more  or  less/'  the  acreage  is  determined  by  the 
actual  acreage  and  not  by  the  number  of  paper 
acres/ 

A  lease  gave  the  tenant  an  option  to  purchase  and 
provided  that  in  case  the  landlord  decided  to  sell 
he  would  give  the  tenant  notice  and  the  "refusal 
to  purchase."  The  option  to  buy  was  for  a  stated 
sum  and  it  was  held  that  a  tender  of  the  amount 
for  which  the  landlord  offered  to  sell  to  another, 
which  was  less  than  the  stated  price,  was  not  suf- 
ficient.^ 

1  Case  where  timber  was  cut  prior  to  election,  McCowen  t.  Pew,  147  Cal. 

299,  81  P.  958. 

Bill  praying  for  a  decree  for  part  payment  of  the  price  is  not  equiva- 
lent to  a  tender,  Jersey  City  v.  Flynn,  74  N.  J.  Eq.  104,  70  Atl.  497. 

The  rule  " de  minimis,"  etc.,  applies,  Ackerman  v.  Maddux,  26  N.  D. 
50,  143  N.  W.  147;  Irvin  v.  Gregory,  79  Mass.  (13  Gray)  215. 

2  Emerson  v.  Fleming,  246  HI.  353,  92  N.  E.  890. 

3  Stein  V.  Archibald,  151  Cal.  220,  90  P.  536. 

4  Warden  v.  Telsa,  87  N.  Y.  S.  853,  93  App.  Dec.  520;   see  Weaver  v. 

Burr,  31  W.  Va.  736,  8  S.  E.  743,  3  L.  E.  A.  94. 

6  Bennett  v.  Farkas,   126  Ga.  228,  54  S.  E.  942. 

Where  the  lessee  was  given  the  preference  right  to  purchase  in  case  the 
lessor  sold,  at  the  sale  price,  the  sale  must  be  bona  fide  and  the  price 
not  fictitious  or  fraudulent.  Ogle  v  Hubbel,  1  Cal.  App  357,  82  P. 
217;     Manchester  S.  C.  Co.   v.   Manchester  R.   Co.,   2  Ch.  Div.   37, 


433  PAYMENT  OR  TENDER — AMOUNT  OP  §  909 

A  tender  of  $16,000  cash  with  interest  on  $10,000 
for  one  year  is  good  under  an  option  in  a  lease 
providing  the  lessor  would  convey  the  property  for 
$6000  cash  and  a  note  for  $10,000  payable  in  one 
year  with  interest.® 

Sec.  909.  AMOUNT  OF  PAYMENT  OR 
TENDER.  INTEREST,  TAXES,  RENTS,  IN- 
SURANCE, ETC.— When  the  optionor  is  in 
default  in  not  tendering  his  deed,  he  can  not  recover 
interest  during  the  period  of  his  default.^  If  the 
optionee  has  had  the  use  of  the  lands  after  tender 
of  the  price  which  was  not  brought  into  court,  he 
is  chargeable  with  interest  on  the  amount  of  the 
tender.^  Where  the  closing  of  the  sale  is  delayed 
by  the  optionor  in  order  to  enable  him  to  furnish 
abstracts,  interest  on  deferred  payments  of  the 

70  L.  J.  Ch.  468,  84  L.  T.  Rep.  (N.  S.)  436,  17  T.  L.  R.  410, 
49  Wkly.  Rep.  418;  see  Marske  v.  Willard,  169  111.  276,  48  N.  E. 
290,  providing  optionee  will  pay  "as  much  as  any  other  person"; 
see  Sees.  211  and  212. 

6  Zimmerman  v.  Brown,    (N.  J.  Eq.)    36  Atl.   675;   see  Handy  t.  Rice, 
98  Me.  504,  57  Atl.  847. 

1  Consolidated  Coal  Co.  v.  Findley,  128  Iowa  696,  105  N.  W.  206 ;  Finlen 

V.  Heinze,  32  Mont.  354,  80  P.  918;  McCarty  v.  Helbling,  (Ore.) 
144  P.  499. 

Optionor  not  entitled  to  interest  on  purchase  money  while  in  possession 
and  refusing  to  perform.  Brewer  v.  Sowers,  118  Md.  681,  86  Atl.  228. 

But  optionee  entitled  to  interest  on  principal  of  mortgage  being  fore- 
closed and  which  was  discharged  by  him,  Brewer  v.  Sowers,  supra. 

2  Rankin  v.  Rankin,  216  HI.  132,  74  N.  E.  763,  affirming  s.  c.  117  111. 

App.  636. 
Optionee  is  entitled  to  interest  on  payment  made   from  date  of   his 

demand  for  return,  Buttner  v.   Smith,    (Cal.)    36   P.   652;    but  not 

when    he    is    paying   rent,    Grummer    v.    Price,    101    Ark.    611,    143 

S.  W.  95. 
28 — Option  Contracts. 


§  910  LAW    OF    OPTION    CONTRACTS  434 

price  runs  from  the  time  of  the  conveyance  and  not 
from  the  precise  time  fixed  by  the  option.^ 

When  taxes  have  been  paid  by  the  optionor,  after 
making  the  option,  a  tender  of  their  amount  is 
essential  to  the  optionee's  right  to  enforce  specific 
performance/ 

The  lessee  in  a  lease  containing  an  option  is 
entitled  to  have  the  balance  of  the  insurance  money 
in  lessor's  hands  credited  as  a  payment  on  the 
price,  he  having  exercised  his  option  to  purchase.' 

A  provision  in  a  lease  giving  the  lessee  an  option 
to  purchase  and  providing  that  the  conveyance 
shall  be  at  the  "cost  and  charge"  of  the  grantee 
therein,  does  not  require  an  assignee  of  the  lessee  to 
pay  a  counsel  fee  to  the  vendor  for  the  examination 
of  the  assignee's  title  to  ascertain  if  he  is  entitled 
to  a  conveyance.^ 

Sec.  910.  AMOUNT  OF  PAYMENT  OR  TEN- 
DER. THE  SAME.— Where  the  lessee  exercises 
his  option  to  purchase  before  the  expiration  of  the 

3  Moore  v.  Beiseker,  147  Fed.  367,  77  C.  C.  A.  545. 

Interest   is   not    chargeable    from    date    of    refused    tender,    Stein   v. 
Leeman,  161  Cal.  502,  119  P.  663,  affirming  90  P.  536. 

4  Vance  v.  Newman,  72  Ark.  359,  80  S.  W.  574,  105  A,  S.  B.  42;   see 

Murphy  v.  Hussey,  117  La.  390,  41  So.  692,  optionee  deducted  taxes 
and  incumbrances;  Brink  v.  Mitchell,  135  Wis.  416,  116  N.  W.  16; 
effect  of  non-payment  of  taxes,  Ankeny  v.  Eichardson,  187  Fed. 
550,  109  C.  C.  A.  316. 
As  to  payment  of  street  assessments  see.  King  v.  Raab,  123  Iowa  632, 
99  N.  W.  306;  TJ.  S.  Internal  Revenue  Tax  on  optioned  whiskey, 
Moise  V.  Company,  79  Neb.  124,  112  N.  W.  372. 

6  Williams  v.  Lilley,  67  Conn.  50,  34  Atl.  765,  37  L.  E.  A.  150 ;  Wilbour 
V.  Trow's  Printing  etc.  Co.,  1  N.  Y.  S.  Rep.  231,  40  Hun.  639, 
rebate  of  insurance  premium  and  allowance  for  taxes;  see  Sec.  512. 

e  Hollander  v.  Central  M.  &  S.  Co.,  109  Md.  131,  71  Atl.  442,  23  L.  E.  A. 
(N.  S.)    1135. 


435  PAYMENT  AND  TENDER — AMOUNT  OF  §  910 

leasehold  term,  he  is  not  required  to  tender  rent  for 
the  imexpired  term.  Tender  of  the  price  for  the 
land  alone  is  sufficient/ 

Where  the  optionor  wrongfully  resumed  posses- 
sion of  the  mine  before  time  of  performance  had 
expired,  and  operated  it,  extracting  about  $19,000 
of  ore,  netting  $3500,  it  was  held  the  optionee  was 
not  entitled  to  specific  performance  in  the  absence 
of  a  demand  for  an  accounting  by  the  optionor  for 
the  ore,  and  tender  of  the  balance  due  on  the  price, 
or  an  allegation,  in  his  complaint  for  specific  per- 
formance, of  willingness  to  pay  such  balance.^ 

A  lessee  in  a  lease  containing  an  option  to  pur- 
chase failed  to  perform  all  of  the  covenants  therein 
on  his  part,  but  the  lessor  did  not  claim  a  forfeiture 
and  the  lessee  exercised  his  option  to  purchase 
within  the  time  limit  and  tendered  the  full  amount 
of  the  price  and  sufficient  in  addition  to  cover  all 
losses  on  account  of  his  default,  and  it  was  held 
that  he  was  entitled  to  specific  performance.^ 

Where,  at  the  time  of  the  exercise  of  the  option 
to  purchase,  the  land  was  subject  to  a  mortgage,  the 

1  Lee  V.  Cochran,  157  Ala.  311,  47  So.  581.    In  this  case  the  election  was 

made  before  the  maturity  of  the  annual  rental;  the  optionee  was 
not  required  to  pay  the  annual  rental ;  the  election  was  Aug.  30, 
1907,  the  next  annual  rental  matured  Oct.  1,  following;  the  ruling 
turned  on  the  particular  language  of  the  lease  (option). 
No  right  to  credit  of  rent  on  extension,  Grummer  v.  Price,  101  Ark. 
611,  143  S.  W.  95. 

2  Clarno  v.   Grayson,  30   Ore.   Ill,  46  P.  426,  also  that   court  will  not 

repossess  the  optionee  and  fix  new  time  to  pay  balance. 
Case  where  timber  was  cut  before  option  was  exercised,  McCowen  v. 
Pew,  147  Cal.  299,  81  P.  958. 

3  Bell  V.  Wright,  31  Kan.  236,  1  P.  595.   Lessee  failed  to  pay  taxes  and 

build  fence,  both  of  which  were  quite  immaterial  if  the  optionee 
took   the  land. 


§  911  LAW    OP   OPTION    CONTRACTS  436 

optionee  was  entitled  to  exercise  Ms  option  on  ten- 
dering the  agreed  price  less  the  amount  of  the 
mortgage/  The  price,  under  an  option  contained 
in  a  lease,  remains  the  same  for  the  second  year  as 
the  first  where  the  lessor  does  not  change  the  price 
as  permitted  by  the  terms  of  the  lease,  and  refuses 
the  price  and  tender  and  also  repudiates  the  con- 
tract.^ 

Sec.  911.  AMOUNT  OF  PAYMENT  OR  TEN- 
DER UNDER  ARBITRATION  AND  VALUA- 
TION CLAUSES.— These  clauses  usuaUy  involve 
the  more  important  question  of  their  enf orcibility, 
a  subject  which  is  presented  in  another  place. ^  The 
purpose  of  such  clauses  is  to  leave  the  price  open 
for  determination  by  the  parties  themselves,  by 
arbitrators  or  by  appraisers,  at  the  time  of  or  after 
exercising  the  option  privilege.  The  amount  of  the 
purchase  price,  therefore,  is  not  known  until  it  has 
been  fixed,  in  accordance  with  the  terms  of  the  con- 
tract, by  the  parties  designated  or  provided  in  the 
agreement,  or,  in  some  cases,  by  the  court.  Neces- 
sarily payment  or  tender  can  not  be  made  until  the 
amount  of  the  purchase  price  has  been  thus  fixed 
and  if  the  proceedings  are  free  from  fraud,  mis- 
take, etc.,  the  amount  to  be  paid  or  tendered  is  the 
amount  so  fixed. 

4  Smiddy  v.  Grafton,  163  Cal.  16,  124  P.  433,  Ann.  Gas.  1913E,  921;  see 

McLaughlin  v.  Royce,  108  Iowa  254,  78  N.  W.  1105. 

5  Abbott  V.  76  Land  Co.,  87  Cal.  323,  25  P.  693. 

Vendee  not  allowed  a  deduction  on  the  price  because  of  an  outstanding 
but  unexercised  option  on  same  land,  Shuemaker  v.  Nissley,  225  Pa. 
430,  74  Atl.  241. 

1  See  Sees.  1212,  1213. 


437  PAYMENT  AND  TENDER OBJECTIONS  TO,  WAIVED        §  912 

Sec.  912.  FAILURE  TO  OBJECT  AS 
WAIVER  OF  FORM,  MODE  AND  AMOUNT.— 
With  reference  to  the  form  and  the  mode  of  tender, 
any  objection  which  the  optionor  has  an  opportu- 
nity of  stating  at  the  time  and  which  could  then  be 
obviated  by  the  optionee,  is  waived  if  not  then 
stated.^ 

If  no  objection  is  made  to  a  tender  of  a  certificate 
of  deposit  upon  the  ground  that  it  is  not  legal 
tender,  or  that  it  is  for  too  large  an  amount,  and 
that  the  creditor  can  not  make  change,  such  objec- 
tions are  waived.^  When  the  optionor  made  no 
objection  to  the  acceptance  of  a  draft  for  the  cash 
payment  required  by  an  option,  and  also  where  the 
optionee  failed  to  assume  a  mortgage  as  part  pay- 
ment, (the  optionor  not  being  able  to  convey 
because  he  had  an  option  only  on  the  land)  the 
tender  is  a  substantial  compliance  with  the  option.^ 

A  tender  in  bank  notes  not  made  a  legal  tender, 
is  valid  unless  objected  to  at  the  time  on  the  ground 
they  are  not  legal  tender.'* 

1  The  Codes  of  California  state  the  general  rule  on  the  subject,  see 
Civil  Code,  Section  1501,  and  Code  of  Civil  Procedure,  Section  2076. 

2Gradle  v.  Warner,  140  HI.  123,  29  N.  E.  1118;   Schaeffer  v.  Coldren, 

237  Pa.  77,  85  Atl.  98,  Ann.  Cas.  1914B,  175,  check. 
Bradford  v.  Foster,  87  Tenn.  4,  9  S.  W.  195,  objection  to  check  as 

tender  of  the  price,  in  specific  performance,  can  not  be  raised  after 

final   decree. 
As  to  payment  of  rent  by  check,  Kentucky  Lumber  Co.  v.  NeweU, 

105  S.  W.  972,  32  Ky.  L.  Kep.  396;  Pershing  v.  Feinberg,  203  Pa. 

144,  52  Atl.  22. 
Offer  to  pay  unliquidated  debt  by  cheek  when  refused,  is  good,  Shank 

V.  Groff,  45  W.  Va.  543,  32  S.  E.  248. 
Too  large  amount  and  demand  for  change,  where  refused.  People's 

Fur.  &  C.  Co.  v.  Crosby,  57  Neb.  282,  77  N.  W.  658,  73  A.  S.  E.  504. 

3  Primm  v.  Wise,  126  Iowa  528,  102  N.  W.  427. 

4  Gaylord  v.  McCoy,  161  N.  C.  685,  77  S.  E.  959. 


§  912  LAW   OF    OPTION    CONTRACTS  438 

When,  at  the  time  of  payment,  the  optionor 
makes  no  objection  to  the  terms  of  payment,  a  sub- 
sequent purchaser  from  him  can  not  do  so.''  Objec- 
tion must  be  made  at  the  time  of  tender.® 

Objection  alone  that  the  tender  was  too  late  pre- 
vents the  vendor  from  questioning  the  authority  of 
the  agent  who  makes  the  tender."^  A  refusal  to 
accept  a  tender  from  a  purchaser,  on  the  ground  of 
nothing  owing,  is  a  waiver  of  the  right  to  object  to 
the  time,  mode  and  sufficiency  of  the  tender,*  and 
generally  an  objection  on  particular  grounds,  is  a 
waiver  of  all  other  grounds,  including  a  conditional 
election.^ 

Accepting  an  installment  gf  the  price  without 
added  interest  then  due,  waives  forfeiture  for  non- 
payment of  entire  amount  of  the  installment,  unless 
the  vendor  gives  the  purchaser  notice  and  a  reason- 
able time  to  pay  the  balance.^** 

Failure  of  the  optionor  to  object  to  an  election 
which  proposes  to  fix  a  day  for  concluding  the  pur- 
chase, not  fixed  by  the  option,  is  not  a  waiver  of 

eVeith  V.  McMurtry,  26  Neb.  341,  42  N.  W.  6. 

6  Kentucky  Chair  Co,  v.  Commonwealth,  105  Ky.  455,  49  S.  W.  197, 

20  Ky.  L.  Rep.  1279. 

7  Keller  v.  Fisher,  7  Ind,  718 ;  see  Pennsylvania  Min.  Co.  v.  Thomas, 

204  Pa.  325,  54  Atl.  101 ;  Zeimantz  v.  Blake,  39  Wash-  6,  80  P.  822. 

8  Lucy  V.  Davis,  163  Cal.  611,  126  P.  490. 

»  Gates  V.  McNeil,  (Cal.)  147  P.  944,  conditional  election;  Rankin  v. 
Rankin,  216  HI.  132,  74  N.  E.  763;  Kreutzer  v.  Lynch,  122  Wis. 
474,  100  N.  W.  887;  see  Coy  v.  Minn.  &  St.  L.  R.  R.  Co.,  116 
Iowa,  558,  90  N.  W.  344;  Dowd  v.  Clarke,  54  Cal.  48,  demand  of 
right  to  purchase  waived  failure  to  tender  interest ;  Keene  v.  Zindorf , 
81  Wash.  152,  142  P.  484,  interest;  Montgomery  v.  DePicot,  153  Cal. 
509,  96  P.   305. 

10  Garney  v.  Berkley,  56  Wash.  24,  104  P.  1108. 


439  PAYaiENT — TIME  OF  §  913 

the  insufficiency  of  the  election  where  the  optionor 
treats  the  election  as  a  mere  proposal  to  which  he 
replies  with  a  demand  for  an  additional  price/ ^  but 
when  the  stock  to  be  delivered  is  placed  in  escrow 
with  a  bank  with  the  assent  of  the  purchaser,  objec- 
tion to  the  mode  of  tender  was  waived,  the  pur- 
chaser refusing  to  perform,  claiming  he  had  been 
advised  he  would  not  have  to  purchase  the  shares/^ 

Sec.  913.  TIME  OF  PAYMENT.  GENER- 
ALLY. (FIXED  TIME.)— The  parties  to  a 
contract  for  the  payment  of  money  have  the  right 
to  fix  thereby  the  time  for  its  payment  and  the 
failure  of  the  creditor  to  pay  on  the  day  fixed,  is  a 
breach  entitling  the  debtor  at  once  to  enforce  pay- 
ment by  action.  In  such  case,  that  is,  a  contract 
involving  the  payment  of  money  only,  such  as  a 
promissory  note,  the  creditor  is  not  entitled  to 
relief  at  law  or  in  equity  under  the  rule  of  for- 
feiture because  that  rule  does  not  apply  to  such 
contracts.^ 

An  option  contract  and  the  bilateral  contract 
raised  therefrom  by  election  are  contracts  having 
for  their  object  the  acquisition  of  property  in  con- 
sideration of  the  payment  of  a  price  therefor. 

11  Knox  V,  McMurray,  159  Iowa  171,  140  N.  W.  652. 

12  Hoover  v.  Wolfe,  167  Cal.  337,  139  P.  794,  the  stock  was  placed  in 

escrow  before  the  expiration  of  the  time  limit. 
Demand  for  survey  of  land,  Cole  v.  Killam,  187  Mass.  213,  72  N.  E.  947. 
Demand   for   deed  with   full  covenants,  McCormick  v.   Stephanj,   61 

N.  J.  Eq.  208,  48  Atl.  25. 

1  Houston  V.  Curran,  101  HI.  App.  203,  affirmed ;  Curran  v.  Houston,  201 
111.  442,  66  N.  E.  228;  Witcher  v.  Webb,  44  Cal.  127;  see,  however, 
Adams  v.  Rutherford,  13  Ore.  78,  8  P.  896. 


§  913  LAW  OF   OPTION    CONTRACTS  440 

Under  the  latter  form  of  contract,  failure  on  the 
part  of  the  optionee  or  purchaser  to  pay  the  price 
or  any  installment  of  the  price  on  the  day  fixed  by 
the  contract,  is  a  breach  of  the  contract,  but  unlike 
a  breach  of  contract  involving  the  payment  of 
money  only,  the  breach  will  not,  in  all  cases,  work 
a  discharge  of  the  contract,  and  therefore,  a  for- 
feiture of  the  rights  of  the  purchaser.  A  court  of 
equity  abhors  forfeiture  and  penalties  and,  there- 
fore, it  has  become  a  rule  of  that  court  that  where 
the  effect  of  a  breach  is  to  work  a  forfeiture,  it  will, 
in  a  proper  case,  relieve  the  purchaser  and  permit 
him  to  make  payment  at  a  day  subsequent  to  that 
fixed  by  the  contract. 

The  payment  referred  to,  is  a  payment  maturing 
after  election  and  therefore  one  to  be  made  under 
the  bilateral  contract.  Where  payment  is  the  act 
of  election,  or  is  made  a  condition  precedent, 
whether  the  rule  of  forfeiture  applies  depends  on 
the  facts.  Ordinarily  where  time  is  not  of  the 
essence  and  compensation  can  be  made,  equity  will 
grant  relief.* 

Where  the  facts  of  a  particular  case  do  not  bring 
it  within  the  rule  of  forfeiture,  the  failure  to  make 
payment  is,  as  we  have  seen,  a  breach  of  the  con- 
tract by  the  purchaser,  and  the  effect  of  such  breach 

2  See  Chipman  v.  Thompson,  Walk.  Ch.  (Mich.)  405,  holding  the  sub- 
stantial difference  which  governs  courts  of  equity  in  cases  of  condition 
is  not  whether  the  condition  be  precedent  or  subsequent  but  whether 
compensation  can  or  can  not  be  made;  also  Selden  v.  Camp,  95  Va. 
527,  28  S.  E.  877;  City  Bank  of  Baltimore  v.  Smith,  3  Gill.  &  J. 
(Md.)  265,  distinguishing  between  interposing  to  prevent  divesting 
of  estate  and  giving  estate;  case  holding  equity  can  not  relieve 
against  breach  of  condition  precedent.  Wells  v.  Smith  2  Edw.  Ch. 
(N.  Y.)  78;  Barnet  v.  Passumpsie  T.  Co.,  15  Vt.  757,  purchaser 
negligent. 


441  PAYMENT — TIME  OP  §  913 

is,  ordinarily,  to  end  his  rights  under  the  contract 
where  the  vendor  is  not  in  default  or  breach  him- 
self. But  again,  this  general  rule  is  subject  to  the 
qualification  that  the  court  will  relieve  the  pur- 
chaser from  a  default  in  making  pajnnent  or  tender 
of  the  price,  within  the  stipulated  time,  when  such 
default  was  caused  by  the  inequitable  conduct  of 
the  vendor,  or  was  due  to  fraud,  accident,  or  mis- 
take.' 

But  in  the  absence  of  some  controlling  equity, 
failure  to  pay  or  tender  at  the  appointed  time, 
discharges  the  vendor. 

Thus,  an  unexplained  delay  of  5  months  after 
notice  of  election,  to  make  a  payment  within  the 
time  fixed  by  the  option  will  prevent  specific  per- 
formance of  the  contract."*  The  failure  of  the 
optionee  to  pay  the  amount  specified  at  the  stipu- 
lated time  amounts  to  a  decision  on  his  part  not  to 
purchase  upon  the  terms  proposed  and  deprives 
him,  or  after  his  death,  his  administrator,  of  any 
right  to  enforce  the  contract.^ 

A  tender  of  the  price  after  the  expiration  of  the 
fixed  time,  in  the  absence  of  any  controlling  equity, 
does  not  entitle  the  lessee-optionee  to  specific  per- 
formance of  the  option  to  purchase  in  the  lease, 
where  the  lease  provides  that  if  the  lessee  made 

8  Codding  V.  Wamsley,  (N.  Y.)  4  Thomp.  &  C.  49,  1  Hun.  585;  Mix  v. 
Balduc,  78  HI.  215;  Coyle  v.  Kierski,  (Del.  Ch.)  89  Atl.  598,  negli- 
gence of  optionee  and  her  attorney;  Smith  v.  Miller,  54  Ind.  App.  37; 
101  N.  E.  316;  Lonergan  v.  Goodman,  241  Dl.  200,  89  N.  E.  349; 
Levy  V.  Lyon,  153  Cal.  213,  94  P.  881. 

4Crandall  t.  WiUig,  166  El.  233,  46  N.  E.  755;  Richardson  v.  Hardwick, 
106  U.  S.  252,  27  L.  Ed.  145,  1  S.  C,  213;  Roberts  v.  Xorton, 
66  Conn.  1,  33  Atl.  532. 

5  Stcaibridge  v.  Stembridge,  87  Ky.  91,  7  S.  W.  611,  9  Ky.  L.  Rep.  948. 


§  914  LAW   OF    OPTION    CONTRACTS  442 

default  in  tlie  payment  of  the  price  named  and 
taxes  and  assessments,  he  would  surrender  posses- 
sion, the  court  holding  that  the  promise  of  the 
lessee  to  pay  was  not  enforceable.® 

Sec.  914.  TIME  OF  PAYMENT.  PAYMENT 
AS  ELECTION  DISTINGUISHED  FROM 
PAYMENT  AS  PERFORMANCE.— In  a  leading 
case  it  is  said,  the  language  of  the  contract  itself 
controls  as  to  what  act  or  acts  constitute  an  elec- 
tion ;  that  under  the  terms  of  one  option,  election 
may  consist  of  payment  or  tender  of  the  purchase 
price,  while  under  the  terms  of  another  option, 
election  may  consist  of  a  mere  notice  of  election  to 
purchase  or  some  other  specified  act,  leaving  pay- 
ment of  the  price  and  execution  of  deed  of  convey- 
ance as  subsequent  matters  in  perf onnance  of  the 
contract  raised  by  the  election;  that  in  the  first 
case,  there  is  an  election  upon  payment  or  tender  of 
the  price,  and  in  the  second,  there  is  an  election 
by  performance  of  the  particular  act  accepting  the 
terms  proposed  by  the  option,  the  payment  of  the 
price  being  a  condition  subsequent,  or  rather,  the 
performance  of  the  executory  contract  raised  by 
the  election.^ 

In  consequence  of  this  distinction,  if  the  election, 
by  mere  notice,  is  timely  and  properly  made,  a 
binding  promise  on  the  part  of  the  optionor  is 

6  L'Engle  v.  Overstreet,  61  Fla.  653,  55  So.  381. 

iBreen  v.  Mayne,  141  Iowa  399,  118  N.  W.  441;  see  Binfofd  v.  Steele, 
161  N.  C.  660,  77  S.  E.  954;  Smith's  Appeal,  69  Pa.  St.  474;  Byers 
V.  Denver  Circle  E.  Co.,  13  Colo.  552,  22  P.  951,  953;  Boston  etc. 
R.  Co.  V.  Rose,  194  Mass.  142,  80  N.  E.  498,  time  of  election  of 
essence,  but  not   time  for  delivering  deed. 


443  PAYMENT  AND  ELECTION  DISTINGUISHED  §  915 

raised,  and  a  tender  of  payment  of  the  price,  by 
the  optionee,  three  days  after  the  expiration  of  the 
stipulated  time  is,  on  the  facts,  within  time  and 
valid  in  equity.^ 

On  the  other  hand,  if,  by  the  terms  of  the  option, 
payment  of  the  price,  or  some  part  thereof,  is  made 
a  condition  precedent  to  the  exercise  of  the  right 
to  buy,  and  the  option  may  impose  such  condition, 
the  money  must  be  paid  or  tendered,  and  a  mere 
notice  of  intention  to  buy,  or  that  the  optionee  will 
take  the  property,  does"  not  change  the  relation  of 
the  parties,  and  does  not  raise  a  binding  promise 
on  the  part  of  the  optionor.* 

Sec.  915.  SAME.  CASES  HOLDING  PAY- 
MENT NOT  NECESSARY  TO  ELECTION.— 
Under  an  agreement  to  sell  coal  giving  the  pur- 
chaser *'an  option  or  privilege  of  buying"  the  coal 
at  any  time  within  nine  months  from  the  date 
thereof,  an  election  within  the  nine  months  without 
tender  of  the  price  within  that  time  is  sufficient.^ 

2  Watson  V.  Coast,  35  W.  Va.  463,  14  S.  E.  249;  Hardy  v.  Ward,  150 
N.  C.  385,  64  S.  E.  171;  Beddow  v.  Flage,  22  N.  D.  53,  132  N.  W. 
637;  Zimmerman  v.  Brown,  (N.  J.  Eq.)  36  Atl.  675;  Mills  v. 
Haywood,  L.  E.  6  Ch.  Div.  196;  Eanelagh  v.  Melton,  34  L.  J.  Ch. 
227,  11  L.  T.  Eep.  409,  13  Wkly.  Rep.  150,  62  Eng.  Reprint  627; 
Horgan  v.  Eussell,  24  N.  D.  490,  140  N.  W.  99,  43  L.  E.  A.  (N.  S.) 
1150. 

8  Winders  v.  Kenan,  161  N.  C.  628,  77  S.  E.  687;  Borst  v.  Simpson, 
90  Ala.  373,  7  So.  814;  see  cases  Sec.  916. 

iPenn.  Min.  Co.  v.  Martin,  210  Pa.  53,  59  Atl.  436,  the  word  "buy" 
used  in  the  option  was  construed  as  not  requiring  the  payment  of 
the  price  within  the  stipulated  time ;  see,  also,  Penn  Min.  Co.  v. 
Smith,  207  Pa.  210,  56  Atl.  426;  Penn  Min.  Co.  v.  Smith,  210  Pa. 
49.   59   Atl.   316. 


§  916  LAW   OP   OPTION    CONTRACTS  444 

Under  an  option  on  coal  lands  at  a  certain  price 
per  acre,  ''one-third  to  be  in  cash  on  delivery  of 
deed  and  the  balance  in  two  equal  annual  install- 
ments," an  election  and  notice  in  time  without 
payment  or  tender  is  good.^ 

Where  a  city  has  the  charter  right  to  purchase 
the  franchise  and  property  of  a  water  corporation, 
*'on  payment  to  such  corporation  of  actual  cost," 
etc.,  of  the  plant,  payment  of  the  price  is  not  part 
of  the  act  of  election,^  nor  is  it  where  the  agreement 
provides  that  payment  of  a  certain  amount  of  the 
price  shall  be  made  "on  delivery  of  the  deed."* 

Sec.  916.  SAME.  CASES  HOLDING  PAY- 
MENT OR  TENDER  NECESSARY  TO  ELEC- 
TION.— An  option  provided  "the  price  agreed 
upon  is  $12,000  cash  upon  payment  of  which  the 
said  C.  H.  L.  will  make  deed,"  etc.  It  was  held, 
under  this  option,  that  to  entitle  the  optionee  to  a 
conveyance,  he  must  not  only  elect  but  also  tender 
the  price  within  the  option  time.^  The  option  used 
the  word  "buy"  and  the  court  held  the  word 
meant  both  "acceptance"  and  payment,  reaching 
a  conclusion  at  variance  with  the  Pennsylvania 

2  Turner  t.  McCormick,  56  W.  Va.  161,  49  S.  E.  28,  107  A.  S.  B.  904, 
67  L.  E.  A.  853. 

sEockport  W.  Co.  v.  Eockport,  161  Mass.  279,  37  N.  E.  168. 

4  Breen  v.  Mayne,  141  Iowa  399,  118  N.  W.  441 ;  see  Zimmerman  v. 
Brown,  (N.  J.  Eq.)  36  Atl.  675;  see  Sec.  921,  as  to  payment  of 
price  and  delivery  of  deed  being  concurrent  acts. 

iKillough  V.  Lee,  2  Tex.  Civ.  App.  260,  21  S.  W.  970;   Pollock  v.  Eid- 
dick,  161  Fed.  280. 
Where  the  option  requires  the  optionee  to  "complete"  the  sale  within 
the  time  limit,  payment  is  included,  Dawson  v.  Dawson,  8  Sim.  346, 
59  Eng.  Eeprint   137. 


445  PAYMENT  AND  ELECTION  DISTINGUISHED  §  916 

court  considering  the  same  word  in  another  but 
similar  option  contract.^  Unless  this  decision  can 
be  distinguished  by  reason  of  fact  that,  by  the 
terms  of  the  option,  the  price  was  payable  in 
''cash,'*  within  the  time  limit,  irrespective  of  the 
delivery  of  the  deed,  it  stands  opposed  to  several 
well  considered  decisions  cited  in  the  next  preced- 
ing section  of  this  chapter.^ 

The  principle  of  the  cited  case  is  supported  by 
one  from  North  Carolina"*  but  the  latter  entirely 
ignores  the  rule  that  under  the  terms  of  the  option 
there  under  consideration  payment  of  the  price  and 
delivery  of  the  deed  were  dependent  covenants.  It 
based  its  decision  upon  Weaver  v.  Burr,^  a  case 
subsequently  distinguished  by  the  same  court  in 
Watson  V.  Coast,*^  on  the  ground  that  the  use  of  the 
word  ''cash"  made  payment  or  tender  of  the  price 
a  part  of  the  election.  The  dissenting  opinion  of 
Justice  Snyder,  in  the  Weaver  case,  destroys  it  as 
a  precedent,  except  possibly  as  distinguished  in  the 
Watson  case.  It  should  be  noted  also  that  the 
Weaver  case  was  overruled  in  Barrett  v.  McAllis- 
ter'^  on  the  point  that  tender  must  be  made  regard- 
less of  the  right  of  the  optionee  to  delivery  of  deed. 
The  Trodgen  decision,  therefore,  must  be  consid- 

2  Penn  Min.  Co.  v.  Martin,  210  Pa.  53,  59  Atl.  436. 

3  See,  also,  Veith  v.  McMurtry,  26  Neb.  341,  42  N.  W.  6. 

4  Trodgen  v.   Williams,     144   N.   C.   192,    56   S.   E.    865,    10   L.   E.   A. 

(N.  S.)   867. 

5  Weaver  v.  Burr,  31  W.  Va.  736,  8  S.  E.  743,  3  L.  E.  A.  94. 

6  Watson  V.  Coast,  35  W.  Va.  463,  14  S.  E.  249. 

7  Barrett  v.  McAllister,  33  W.  Va.  738,  11  S.  E.  220. 

Under  an  option  to  repurchase,  payment  of  the  price  or  tender  is  a 
condition  precedent  to  a  reconveraDce,  see  Hubert  v.  Sistrunk,  (Ala.) 
53  So.  819;   also  Sees.   828,  853. 


§  917  LAW    OF    OPTION    CONTRACTS  446 

ered  as  one  where  by  the  express  terms  of  the 
option,  pa\Tnent  was  made  a  part  of  the  election, 
or  it  is  not  in  accord  with  the  weight  of  judicial 
authority,  and  there  seems  to  be  sufficient  room  for 
interpretation  on  this  point  to  justify  the  decision 
of  the  court  on  that  ground. 

Sec.  917.  THE  SAME,  CONTINUED.— In 
another  case  an  option  to  purchase  timber  provided, 
"if  accepted  the  above  mentioned  parties  are  to 
have  for  said  timber  an  additional  amount  of  $2450 
in  cash  upon  the  making  of  the  contract  for  the 
sale  of  said  timber.'^  It  was  held  the  optionee  was 
required  to  pay  or  tender  the  amount  before  the 
expiration  of  the  option  to  entitle  him  to  main- 
tain an  action  to  recover  damages  for  refusal  of 
the  optionor  to  make  the  sale.^  In  this  case  it 
will  be  observed  the  option  not  only  required  a 
cash  payment  but  also  expressly  provided  that  it 
should  be  made  "upon  the  making  of  the  contract 
for  the  sale  of  the  timber." 

Where  a  lessee  was  granted  an  option  privilege 
to  purchase  the  premises  "at  any  time  before  the 
expiration  of  this  lease  for  $11,117  to  be  paid  down 
in  cash  to  the  first  party,  upon  demand  of  a  deed, 
prior  to  the  expiration  of  this  lease,"  tender  or 
pa}Tnent  of  the  price  is  made  a  part  of  the  election 
and  is  a  condition  precedent  to  the  consummation 

1  Pollock  V.  Riddick,  161  Fed.  280,  price  was  "cash." 

See  Spokane  P.  &  C.  Ry.  Co.  v.  Ballinger,  50  Wash.  547,  97  P.  739^ 
where  $1  was  paid  as  consideration  for  option  and  $899  to  be 
paid  on  execution  of  deed;  the  latter  sum  was  not  tendered. 

Levy  V.  Lyon,  153  Cal.  213,  94  P.  881,  turned  on  the  point  there  was 
no  allegation  of  any  tender  in  the  cross-complaint;  see,  also,  Couch 
V.  McCoy,  138  Fed.  696,  construed  as  requiring  part  payment  of  price. 


447  PAYMENT  AND  ELECTION  DISTINGUISHED  §  917 

of  any  binding  contract,  and  this  by  force  of  the 
express  provisions  of  the  lease.  ^ 

In  an  Illinois  case^  the  price  was  payable  ''one- 
fifth  at  the  time  of  delivery  of  deed  in  cash"  and 
the  balance  in  five  equal  annual  installments  to  be 
secured  by  mortgage,  and  further  provided  ''said 
cash  to  be  made  and  securities  delivered  on  or  about 
the  1st  of  December,  1892."  It  was  held  that  an 
election  without  pajonent  or  tender  of  the  cash 
payment  was  insufficient.  This  holding  was  clearly 
correct  because  the  option  agreement  expressly 
made  payment  a  part  of  the  election. 

There  is  an  Iowa  decision"  to  the  effect  that 
where  nothing  is  expressly  stated  in  the  option  as 
to  when  payment  is  to  be  made  it  must  be  implied 
that  payment  of  the  price  or  tender  is  a  part  of 
the  election.  The  court  overlooks  the  rule  that  m 
such  case  payment  of  the  price  and  delivery  of  the 
deed  are  concurrent  acts.^  That  case,  however,  did 
not  call  for  any  such  exposition  of  the  law  and  it 
is  needless  to  add  that  no  authorities  are  cited  in 

2  Steele  v.   Bond,   32   Minn.   14,   18   N.   W.   830;    MeKenzie   v.   Murphy, 

31  Colo.  274,  72  P.  1075. 
Eease  v.  Kittle,  56  W.  Va.  269,  49  S.  E.  150,  the  option  made  the 
price  payable  ' '  before  the  expiration ' '  of  the  time  limit ;  see  Pollock 
V.  Brookover,  60  W.  Va.  75,  53  S.  E.  795,  6  L.  R.  A.  (N.  S.)  403; 
Weston  V.  Collins,  11  Jur.  (N.  S.)  190,  34  L.  J,  Ch.  353,  13  Wkly. 
Rep.  510;  also  Gaylord  v.  McCoy,  161  N.  C.  685,  77  S.  E.  959. 

3  CrandaU  v.  Willig,  166  El.  233,  46  N.  E.  755,  the  delay  in  tendering 

was  5  months;  see,  also,  Winders  v.  Kenan,  161  N.  C.  628,  77  S.  E. 
687,  where  the  option  fixed  a  specific  day  for  payment  of  the  price. 

4  Lockman  v.  Anderson,  116  Iowa  236,  89  N.  W.  1072. 

Hollmann  v.  Conlon,  143  Mo.  369,  45  S.  W.  275,  is  similar  in  that  the 
optionee  made  no  election  within  the  ten  days  fixed  by  the  option 
for  examination  of  the  abstract  of  title  and  acceptance  thereof. 

5  See  Sec.   921. 


§  918  LAW    OP    OPTION    CONTRACTS  448 

support  of  the  proposition.  The  facts  were  that 
the  optionee,  as  the  court  correctly  held,  did  not 
elect  and  give  notice  within  the  option  time.  Such 
failure  ended  the  rights  of  the  optionee  and  it  was 
quite  immaterial  whether  or  not  payment  or  ten- 
der was  made. 

Sec.  918.  TIME  OF  PAYMENT.  CON- 
STRUCTION OF  PARTICULAR  CLAUSES.— 
The  general  rule  is  that  where  there  is  no  express 
provision  fixing  the  time  for  the  payment  of  the 
price,  it  is  presumed  to  be  a  cash  transaction.^  So, 
with  reference  to  a  mortgage  securing  the  price, 
if  no  time  is  fixed  for  payment,  and  there  are  no 
circumstances  to  indicate  that  the  time  of  pajnnent 
was  to  be  postponed,  the  money  is  payable  imme- 
diately.^ 

Where  the  agreement  gives  the  vendee  the  right 
to  pay  the  installments  of  the  price  '*on  or  before'* 
the  date  on  which  they  are  due,  he  can  pay  all  of  the 
installments  before  the  first  installment  is  due.^ 

An  option  to  purchase  contained  in  a  lease  stipu- 
lating that  at  the  end  of  the  term  the  lessee,  on  pay- 
ment of  full  rent,  may  purchase  the  premises  for 
a  specified  sum,  does  not  require  the  lessee  to  pay 
or  tender  payment  of  the  price  at  the  time  of  giv- 

1  Jones  V.  Moncrief -Cook  Co.,  25  Okl.  856,  108  P.  403 ;  Angel  v.  Simpson, 

85  Ala.  53,  3  So.  758 ;  and  of  course  not  to  be  on  credit,  where  the 
price  is  fixed,  Witting,  Succession  of,  121  La.  501,  46  So.  606,  15 
Ann.  Gas.  379. 

2  Richards  v.   Green,  23  N.  J.  Eq.  536 

8  Kaufman  v.  All  Persons,  16  Cal.  App.  388,  117  P.  586. 


449  PAYMENT — TIME  AS  ESSENCE  §  919 

ing  notice  of  election,  though  payment  will  be 
essential  before  he  is  entitled  to  a  conveyance.^ 


Sec.  919.  TIME  OF  PAYMENT  NOT  OF  THE 
ESSENCE,  WHEN.— The  rule  is  that  time  of 
payment  of  the  price,  under  a  contract  raised  by 
an  election,  is  not  essential  unless  expressly  so  pro- 
vided in  the  agreement  or  implied  from  the  cir- 
cumstances.^ As  said  in  a  Pennsylvania  case,  time 
is  of  the  essence  of  the  contract  as  related  to  the 
option,  but  not  as  to  performance.^  And  with  refer- 
ence to  a  promise  to  pay  money  at  a  fixed  date,  the 
rule  in  equity  is  that  time  of  payment  is  not  ordi- 
narily essential,  so  that  merely  suffering  the 
appointed  date  to  pass  without  payment,  will  not 
preclude  the  party  from  enforcing  the  contract.^ 

An  option  for  the  sale  of  real  estate  provided 
that  if,  at  the  end  of  30  days,  the  option  was  not 
accepted  by  the  vendee,  and  the  second  payment  of 
$1500  made,  then,  the  smn  of  $1500  paid  should  be 
forfeited  to  the  optionor,  and  it  was  held  time  was 
of  the  essence  of  the  agreement  only  with  refer- 
ence to  the  first  two  payments,  and  the  second  hav- 
ing been  promptly  made,  the  option  was  at  an  end, 
and  the  optionor,  in  case  of  non-performance  by 
the  optionee,  was  not  entitled  to  retain  the  purchase 
money  as  a  forfeiture,  but  could  only  retain  an 

4Cates  V.  McNeil,   (Cal.)    147  P.  944. 

1  Boston  etc.  R.  Co.  v.  Rose,  194  Mass.  142,  80  N.  E.  498. 

The  same  rule  obtains  here  as  under  the  ordinary  agreement  of  sale 
and  purchase,  Langert  v.  Ross,  1  Wash.  250,  24  P.  443;  Vance  v. 
Newman,  72  Ark.  359,  80  S.  W.  574,  105  A.  S.  R.  42. 

2  Smith's  Appeal,  69  Pa.  474. 

3  Vance  v.  Newman,  72  Ark.  359,  80  S.  W.  574,  105  A.  S.  R.  42. 
29 — Option  Contracts. 


§  920  LAW    OP    OPTION    CONTRACTS  450 

amount  sufficient  to  cover  such  loss  as  it  had  sus- 
tained by  reason  of  the  breach.* 

Sec.  920.  TIME  OF  PAYMENT  ESSENTIAL. 
GENERALLY. — Having  in  mind  that  the  pay- 
ment we  are  now  considering  is  not  paj^ment 
as  an  act  of  election,  but  the  fulfillment  of  the 
promise  of  the  optionee  to  pay  the  price  at  a  date 
subsequent  to  the  election,  the  rule  on  the  subject 
is  the  same  as  that  with  reference  to  payment  under 
a  bilateral  contract.  If  there  is  an  express  stipula- 
tion, the  intention  of  the  parties  to  make  time  essen- 
tial must  be  clearly  and  unequivocally  shown; 
merely  fixing  a  day  for  the  payment  of  the  money 
does  not  make  the  time  of  payment  essential,^  but 
fixing  a  time  and  stipulating  that  if  payment  is  not 
made  within  the  time,  the  agreement  shall  be  null 
and  void,  shows  an  intention  to  make  time  essen- 
tial.2 

On  the  other  hand,  if  time  is  either  expressly  or 
impliedly  made  essential  and  the  optionee  fails  to 
make  timely  payment  in  accordance  with  the  terms 
of  the  option,  the  contingent  interest  of  the  optionee 
in  the  property  is  subject  to  termination  at  the 
optionor's  election.^ 

4  Davis  V.  Barada-GMo.  E.  E.  Co.,  115  Mo.  App.  327,  92  S.  W.  113. 

X  Horgan  v.  Eussell,  24  N.  D.  490,  140  N.  W.  99,  43  L.  R.  A.  (N.  S.) 
1150;  Jefifries  v.  Charlton,  74  N.  J.  Eq.  430,  70  Atl.  145,  agreement 
to   reconvey. 

2  Martin  v.  Morgan,  87  Cal.  203,  25  P.  350,  22  A.  S.  R.  240;  Sowles  v. 
Hall,  62  Vt.  247,  20  Atl.  810. 

8  Snider  v.  Yarbrough,  43  Mont.  203,  115  P.  411;  Rude  v.  Levy,  43  Colo. 
482,  96  P.  560,  24  L.  R.  A.  (N.  S.)  91,  127  A.  S.  R.  123. 
Tender  after  default  though  before  notice  of  forfeiture,  is  too  late, 
Champion  Gold  M.  Co.  v.  Champion  Mines,  164  Cal.  205,  128  P.  315. 


451  PAYMENT  AND  CONVEYANCE  CONCURRENT  ACTS  §  921 

Time  of  payment  may  be  made  of  the  essence  by 
express  stipulation  or  may  arise  b}^  implication 
from  the  very  nature  of  the  property,  or  from  the 
avowed  objects  of  the  seller  or  purchaser,*  or  by 
change  in  value  or  other  circiunstances,^  or  by  sub- 
sequent notice  to  perform;^  but  in  order  to  make 
time  of  the  essence  of  the  contract  after  it  has 
been  entered  into,  the  time  fixed  must  be  reason- 
able/ 

Sec.  921.  SAME.  DELIVERY  OF  DEED  AND 
PAYMENT  OF  PRICE  AS  CONCURRENT 
ACTS. — An  election  having  been  timely  and  prop- 

4  Taylor  v.  Longworth,  14  Pet.    (U.  S.)    172,   10  L.  Ed.  405;   Kemp  v. 

Humphreys,  13  111.  573. 
Woods  V.  McGraw,   127  Fed.  914,  63  C.  C.  A.  556,  the  optionor  was 
in  urgent  need  for  money  and  the  time  was  fixed  by  the  parties  with 
that  object  in  view. 

Standiford   v.   Thompson,   135   Ted.   991,   68   C.  C.   A.   425,  nature  of 
property. 

5  Standiford  v.   Thompson,  supra. 

eClarno  v.  Grayson,  30  Ore.  Ill,  46  P.  426;  Coyle  v.  Kierski,  (Del.  Ch.) 

89  Atl.  598;  Ellis  v.  Bryant,  120  Ga.  890,  48  S.  E.  352. 

When  property  is  subject  to  fluctuation  in  value,  time  is  of  the  essence: 

the  rule  is   especially  applicable  to  mining  property,  see  Settle  v. 

Winters,  2   Idaho  215,   10   P.    216.    Snider  v.   Yarbrough,  43   Mont. 

203,  115  P.  411;  Waterman  v.  Banks,  144  U.  S.  394,  36  L.  Ed.  479, 
12  S.  Ct.  646;  Harper  v.  Independence  Dev.  Co.,  13  Ariz.  176,  108 
P.  701;  Gaines  v.  Chew,  167  Fed.  630;  Durant  v.  Comegys,  3  Idaho 

204,  28  P.  425;  Clark  v.  American  Dep.  Co.,  28  Mont.  468,  72  P.  978; 
Merk  v.  Bowery  M.  Co.,  31  Mont.  298,  78  P.  519. 

7  Crawford  v.  Toogood,  L.  R.  13  Ch.  Div.  153;  Pegg  v.  Wisden,  16  Beav. 
239,  16  Jur.  1105,  51  Eng.  Reprint  770. 
Courts  lean  against  construing  time  of  payment  of  money  essential 
because  a  penalty  will  result  and  because  interest  is  usually  treated 
as  full  compensation,  sometimes  disregarding  an  express  stipulation, 
Ellis  v.  Bryant,  120  Ga.  890,  48  S.  E.  352;  see  Antonelle  v.  Kennedy 
&  Shaw  L.  Co.,  140  Cal.  309,  73  P.  966. 


§  921  LAW    OF    OPTION    CONTRACTS  452 

erly  made  the  deliver}^  of  deed  of  conveyance  and 
paj^ment  of  the  price  under  a  clause  in  an  agree- 
ment providing  that  the  optionor  shall  execute  a 
deed  of  conveyance  for  the  property  ' '  at  which  time 
such  consideration  sum  will  become  due  and  pay- 
able; and  the  said  second  party  (optionee)  then 
agrees  to  pay"  the  consideration,  are  mutual  and 
dependent  acts,  and  where,  therefore,  no  deed  was 
made  and  tendered,  nor  demand  made  for  payment 
of  the  money,  the  optionee  is  not  in  default,  the 
rule  being  that  "so  long  as  neither  party  makes 
any  tender  of  the  deed,  on  the  one  hand,  or  of  pay- 
ment, on  the  other,  neither  party  is  in  default,  and 
the  contract  subsists;  either  party  may  make 
proper  tender  and  insist  upon  specific  performance 
at  any  time,  until  barred  by  the  statute  of  limita- 
tions/ 

Tender  of  purchase  money  by  a  vendee  under 
mutual  and  concurrent  promises,  means  merely  a 
readiness  and  willingness  accompanied  by  ability  to 
produce  the  money,  provided  the  vendor  will  con- 
currently do  the  act  required  of  him,  and,  hence  a 
purchaser,  in  making  tender,  need  not  part  with 
his  money  until  he  receives  a  conveyance,  and  in 
such  case,  he  may  make  his  offer  or  tender  on  con- 
dition that  the  vendor  will  execute  his  valid  deed  to 
the  property  bought,  or,  as  sometimes  said,  ''he  who 
tenders  for  a  deed  need  not  part  with  his  money  till 

iByers  v.  Denver  Circle  B.  Co.,  13  Colo.  552,  22  P.  951;  see  Heine  v. 
Treadwell,  72  Cal.  217,  13  P.  ^03;  Sizer  v.  Clark,  116  Wis.  534, 
93  N.  W.  539;  Barrett  v.  McAllister,  33  W.  Va.  738,  11  S.  E.  220; 
Leaird  v.  Smith,  44  N.  Y.  618;  Gates  v.  McNeil,  (Cal.)  147  P,  944. 


453  PAYMENT  AND  CONVEYANCE  CONCURRENT  ACTS  §  922 

he  can  touch  the  deed,  so  he  need  run  no  risk  for  the 
safety  of  his  money. '  '^ 

Sec.  922.  SAME.  DELIVERY  OF  DEED  AND 
PAYMENT  OF  PRICE  AS  CONCURRENT 
ACTS,  CONTINUED.— In  Watson  v.  Coast,^  the 
option  ran,  ''for  the  smn  of  $1250  I  hereby  agree  to 
sell  and  transfer"  certain  lands,  provided  the 
optionee  elects  within  a  certain  time.  It  was  held 
that  tender  or  payment  of  the  price  was  not  part 
of  the  election,  and  that  the  covenant  to  pay  the 
price  and  to  convey  was  mutual  and  dependent,  and 
that  performance  of  one  could  not  be  required 
before  the  other  was  ready  to  be  performed.  The 
decision  just  cited  follows  the  rule  declared  by  the 
same  court  in  Barrett  v.  McAllister,^  which  latter 
decision  overruled  Weaver  v.  Burr,^  making  a  con- 
trary ruling  on  substantially  the  same  facts. 

2  Binford  v.  Steele,  161  N.  C.  660,  77  S.  E.  954;  see  Phelps  v.  Davenport, 
151  N.  C.  22,  65  S.  E.  459 ;  Turner  v.  McCormick,  56  W.  Va.  161, 
49  S.  E.  28,  107  A.  S.  E.  904,  67  L.  E.  A.  853 ;  Breen  v.  Mayne,  141 
Iowa  399,  118  N.  W.  441;  Reynolds  v.  O'Neil,  26  N.  J.  Eq.  223; 
Wright  V.  Suydam,  72  Wash.  587,  131  P.  239;  see  Stevens  v.  Kitt- 
redge,  44  Wash.  347,  87  P.  484;  Latimer  v.  Capay,  V.  L.  Co.,  137 
Cal.  286,  70  P.  82;  Comstock  v.  Lager,  78  Mo.  App.  390. 

In  Guilford  v.  Mason,  22  R.  I.  422,  48  Atl.  386,  the  court  seems  to 
have  applied  this  rule  to  a  case  where,  apparently,  the  payment  was 
the  act  of  election,  but  where,  however,  there  was  an  attempt  to 
tender,  the  optionor  evading;  Osgood  v.  Skinner,  211  111.  229,  71 
N.  E.  869,  option  to  repurchase. 

Ordinarily  time  for  delivery  of  deed  is  not  essential,  Boston  etc.  Ey. 
Co.  v.  Rose,  194  Mass.  142,  80  N.  E.  498. 

1  Watson  v.  Coast,  35  W.  Va.  463,   14  S.  E.   249. 

2  Barrett  v.  McAllister,  33  W.  Va.  738,  11  S.  E.  220. 

«  Weaver  v.  Burr,  31  W.  Va.  736,  8  8.  E.  743,  3  L.  R.  A.  94;  see  Hardy 
V.  Ward,  150  N.  C.  385,  64  S.  E.  171,  distinguishing  the  Weaver 
decision. 


§  923  LAW  OF  OPTION  CONTRACTS  454 

In  another  case,'*  the  option  provided  that  the 
price  should  be  payable  '  *  on  or  before  three  months 
from  the  date  hereof,  upon  presentation  and  deliv- 
ery of  a  good  and  sufficient  deed,  clear  of  all  encum- 
brances ;  payments  to  be  made  as  follows :  one- third 
at  the  time  of  presentation  and  delivery  of  deed, 
one-third  in  one  year  with  interest,  and  one-third 
in  two  years,"  etc.  It  was  held  the  optionor  could 
not  claim  a  forfeiture  (there  was  a  forfeiture 
clause  but  it  did  not  fix  a  time  limit  for  payment  of 
the  price),  for  failure  to  make  the  first  payment 
within  the  option  time,  the  optionee  having 
"accepted"  the  option  "upon  the  terms  mentioned" 
in  the  option,  and  the  optionol*  having  failed  to 
present  a  deed  for  delivery  within  the  option  time. 

Sec.  923.  TIME  OF  PAYMENT.  WAIVER 
AND    ESTOPPEL.     GENERALLY.— We    may 

say  here  as  we  said  in  a  former  chapter  treating 
of  the  timeliness  of  election,  that  the  rules  pre- 
sented in  the  preceding  sections  of  this  chapter 
with  reference  to  the  time  of  payment  or  tender  are 
on  the  assumption  that  the  untimely  delay  in  mak- 
ing payment  or  tender  was  not  brought  about  by 
the  conduct  of  the  optionor. 

If  the  failure  to  make  a  timely  election  arises 
from  the  inequitable  conduct  of  the  optionor,^  and 
the  optionee  is  free  from  fault,  equity  disregards 

4  McHenry  v.  Mitchell,  219  Pa.  297,  68  Atl.  729;  see,  also,  Boston  etc. 
Ey.  Co.  V.  Rose,  194  Mass.  142,  80  N.  E.  498;  Byers  v.  Ry.  Co.,  13 
Colo.  552,  22  P.  951;   Hartman  v.  McAlister,  5  N.  C.  207. 

1  The  conduct  relied  on  must  be  that  of  the  optionor  and  not  of  a  third 
party,  relating  to  collateral  matters,  see  Bradley  v.  Bradley,  14  Ont. 
L.  Rep.  473,  10  Ont.  Wkly.  Rep.  223,  purchase  from  optionee. 


455  PAYMENT—  ,VaIVER  AND  ESTOPPEL  §  923 

time  as  essential  whether  so  expressed  or  implied 
from  circumstances  and  allows  the  optionee  to 
make  payment  or  tender  after  the  expiration  of  the 
contract  time,  which  is  another  w^ay  of  saying  that, 
in  such  cases  equity  does  not  permit  the  optionor  to 
stand  upon  his  strict  contract  rights  and  prevents 
him  from  declaring  a  forfeiture  because  of  such 
delay."  The  effect  of  such  conduct,  it  is  said,  waives 
the  timeliness  of  the  tender  and  estops  the  optionor 
from  taking  advantage  of  his  own  wrongful  con- 
duct. 

Again,  in  certain  cases,  pa}Tnent  or  tender 
becomes  unnecessary  because  the  law  does  not 
require  the  performance  of  idle  acts,^  and  also 
excuses  certain  delays  due  to  accident  and  act  of 
God." 

When  time  was  originally  of  the  essence  of  the 
contract  to  convey,  but  for  sufficient  cause,  for- 
feiture for  default  therein  has  been  waived,  time 
ceases  to  be  essential  and  thereafter  is  material 
only,  until  the  vendor  makes  it  essential  by  proper 
and  reasonable  notice  and  demand.^ 

2  Though   time   be  expressly   made   of   the  essence   of   the   contract,  yet 

generally  time  is  not  so  treated  by  a  court  of  equity,  in  the  absence 
of  neglect,  or  delay  unaccounted  for,  Durant  v.  Comegys,  3  Idaho 
204,  28  P.  425. 
Non-payment  does  not  ipso  facto  work  a  forfeiture ;  forfeiture  is 
optional  with  vendor,  but  the  right  of  the  vendor  to  forfeit  for  non- 
payment must  be  exercised  promptly  on  default.  Van  Dyke  v.  Cole, 
81  Vt.  379,  70  Atl.  593. 

3  Gaylord  v.  McCoy,  161  N.  C.  685,  77  S.  E.  959. 

4  Civil  Code  California,   Section   1511. 

5  Boone  v.  Templeman,  158  Cal.  290,  110  P.  947. 


§  924  LAW   OF    OPTION    CONTRACTS  433 

Sec.  924.  WAIVER  AND  ESTOPPEL.  PAY- 
MENT CONSIDERED  AS  ACT  OF  ELEC- 
TION.— It  is  clear  on  principle  and  sustained  by 
aiitliority  that  a  mere  repudiation  of  an  option  con- 
tract by  the  optionor,  or  his  refusal  before  the  expi- 
ration of  the  time  limit,  to  perform  it,  or  his  mere 
default,  does  not  dispense  with  the  necessity  of  elec- 
tion and  notice  by  the  optionee  in  order  to  turn  the 
option  into  a  binding  promise  to  sell,^  and  when 
payment  of  the  price,  or  of  an  installment,  is  a  part 
of  the  election,  the  same  general  rule  seems  appli- 
cable. But  there  is  a  distinction  running  through 
the  cases.  Courts  look  upon  election  as  an  act  which 
may  be  formally  communicated  by  notice,  or  it  may 
arise  from  conduct,  but  in  the  latter  case  the  con- 
duct must  be  brought  to  the  knowledge  of  the 
optionor,  or  there  must  be  some  conduct  on  his  part 
which  takes  the  place  of  a  formal  notice  of  election. 
Pajanent  of  the  price,  however,  even  though  by  the 
terms  of  the  option  made  the  act  of  acceptance,  is 
looked  upon  as  having  to  do  with  the  performance 
of  the  contract,  and,  therefore,  if  at  the  time  it 
becomes  the  duty  of  the  optionee  to  act  under  the 
option,  or  prior  thereto,  the  optionor  has  indicated 
to  the  optionee  the  information  that  he  absolutely 
refuses  to  perform  the  option  agreement  on  his 
part  and  will  not  accept  payment  if  tendered,  notice 
of  the  exercise  of  the  privilege  to  purchase,  without 
pajTnent  or  tender,  at  the  same  time,  is,  as  a  rule, 

1  Kelsey  v.  Crowther,  162  U.  S.  404,  40  L.  Ed.  1017,  16  S.  Ct.  808,  failnr;> 
of  optionor  to  deliver  abstract;  Marsh  v.  Lott,  8  Cal.  App.  384,  97 
P.  163;   see  Gordon  v.  Darnell,  5  Colo.  302. 


457  PAYMENT — WAIVER  AND  ESTOPPEL  §  925 

sufficient,^  perhaps  on  the  theory  that  equity 
resolves  the  act  into  its  two  parts  of  election  and 
payment,  the  former  raising  a  real  contract,  the 
effect  of  which  is  to  vest  the  equitable  title  to  the 
property  in  the  optionee  and  thus  make  applicable 
the  rule  as  to  forfeiture,^  especially  where  money 
has  theretofore  been  paid  on  the  price  or  possession 
taken  and  improvements  made.  In  such  case  ''the 
doctrine  of  equity  is  not  forfeiture,  but  compensa- 
tion," the  compensation  being  the  payments  past 
due  with  interest.* 

Sec.  925.  SAME.  CASES  HOLDING  PAY- 
MENT OR  TENDER  NECESSARY.— Lockman 
V.  Anderson^  may  be  taken  as  typical  of  the  class. 

2Borst  V.  Simpson,  90  Ala.  373,  7  So.  814;   Brewer  v.  Sowers,  118  Md. 

681,    86   Atl.   228,   optionor   evaded;    Barnes   v.   Rea,    219   Pa.   279, 

68  Atl.  836;  Barnes  v.  Hustead,  219  Pa.  287,  68  Atl.  839. 
Mansfield  v.   Hodgdon,   147   Mass.   304,   17  N.   E.   544,   the  price  was 

payable  in  cash,  but  the  court  said  the  undertaking  was  not  a  mere 

offer,  but  a  conditional  covenant  to  sell. 
Bullock  V.  Cutting,  140  N.  Y.  S.  686,  the  price  was  payable  in  cash. 
Refusal  of  wife  to  join  in  deed  not  waiver,  Bowen  v.  McCarthy,  85 

Mich.  26,  48  N.  W.  155,  but  see  Mansfield  v.  Hodgdon,  supra. 
Murphy  v.  Hussey,  117  La.  390,  41  So.  692,  deposit  not  necessary. 
Palmer  v.  Clark,  52  Wash.  345,  100  P.   749,  pleading. 
Under  a  "refusal,"  see  Cummings  v.  Nielsou,  42  Utah  157,  129  P.  619. 

3  See  Clarno  v.  Grayson,  30   Ore.   Ill,  46  P.  426,  430;   see  Guilford  v. 

Mason,  22  R.  I.  422,  48  Atl.  386,  where  payment  and  technical  com- 
mon law  tender  were  excused  because  optionor  evaded. 

4  See  Wilson  t.  Herbert,  76  Md.  489,  25  Atl.  685;  see  Shouse  v.  Doane, 

39  Fla.  95,  21  So.  807. 

1  Lockman  v.  Anderson,  116  Iowa  236,  89  N.  W.  1072,  the  court  was 
undoubtedly  correct  in  holding  on  the  facts  there  was  no  waiver  of 
payment,  but  the  reasoning  of  the  court  as  to  the  time  of  payment 
as  well  as  its  construction  of  the  clause  is  not  convincing.  The  fact 
that  no  time  of  payment  was  expressly  fixed  by  the  option,  is  negli- 
gible, except  perhaps  as  a  circumstance  tending  to  show  an  intention 


§  926  LAW    OF    OPTION    CONTRACTS  458 

The  optionor  agreed  to  sell  to  the  optionee  a  certaiu 
lot  and  building  "for  a  consideration  of  $5500"  on 
the  condition  that  the  optionee  desired  "to  buy  the 
same  by  the  first  of  March,  1900. ' '  The  court  con- 
strued this  language  as  requiring  payment  as  part 
of  the  election,  on  the  theory  that  as  no  time  of 
payment  was  expressly  fixed,  the  court  was  bound 
to  hold  the  intention  was  that  the  purchase  price 
was  to  be  paid  on  the  day  named.  The  fact  was  the 
optionee  on  the  day  before  the  expiration  of  the 
time  limit,  as  the  court  puts  it,  "communicated  to 
the  defendant  his  purpose"  of  availing  himself  of 
the  option  to  take  the  property  and  advised  the 
optionor  that  he  would  conclude  the  transaction  on 
the  following  day  (the  day  of  expiration)  ;  that  on 
the  following  day  the  optionee  "had  more  conversa- 
tion with  the  defendant"  (optionor)  with  reference 
to  postponing  the  final  consummation  of  the  trans- 
action until  March  3rd  (after  the  expiration  of  the 
option)  ;  and  that  on  the  3rd  of  March  the  optionee 
tendered  to  the  defendant  the  agreed  price  for  the 
property  and  the  defendant  refused  to  execute  a 
deed.  The  court  held  there  was  no  waiver  of  tender. 

Sec.  926.  THE  SAME.  CASE  HOLDING 
PAYMENT  OR  TENDER  NOT  NECESSARY. 
— Smith  V.  Gibson,^  involved  an  option  to  purchase, 

to  make  payment  and  delivery  of  deed  concurrent  acts.  The  court 
having  held  there  was  no  waiver,  it  would  seem  that  the  only  ground 
upon  which  to  sustain  the  decision  is  to  construe  the  word  ' '  buy ' '  to 
mean  election  and  payment  of  the  price. 

1  Smith  V.  Gibson,  25  Nev.  511,  41  N.  W.  360;  see  Kreutzer  v.  Lynch, 
122  Wis.  474,  100  N.  W.  887 ;  Mansfield  v.  Hodgdon,  147  Mass.  304, 
17  N.  E.  544;  Butler  v.  Threlkeld,  117  Iowa  116,  90  N.  W.  584. 


459  PAYMENT — WAIVER  AND  ESTOPPEL  §  926 

contained  in  a  lease  of  the  premises,  granting  the 
optionee  the  right  to  purchase  the  premises  at  any 
time  during  the  term  of  the  lease,  for  a  certain  sum, 
and  in  which  nothing  was  expressly  provided  with 
reference  to  the  time  or  the  conditions  of  payment 
of  the  price.  In  this  particular  case  the  optionee, 
during  the  term,  exercised  his  right  to  purchase 
and  gave  notice  thereof,  and  at  that  time  the  agent 
of  the  optionor  notified  him  that  he  would  not  carry 
out  the  contract.  The  optionee  did  not  tender  the 
purchase  price,  and  the  court  held  that  tender  was 
unnecessary  to  entitle  him  to  specific  performance 
because  of  the  refusal  of  the  agent  of  the  optionor 
to  carry  out  the  contract,  a  tender  having  been  per- 
sonally made  prior  to  the  commencement  of  the 
suit,  which  was  again  refused. 

It  is  held  in  a  California  case,^  that  where,  underv^ 
an  option  giving  the  right  to  purchase  property  for 
a  certain  sum,  without  further  condition  or  qualifi- 
cation, the  declaration  of  the  optionor  prior  to  the 
expiration  of  the  option  period  that  he  will  not  exe- 
cute a  deed,  releases  the  optionee  from  the  necessity  ! 
of  tendering  the  price  as  a  condition  of  maintaining 
a  suit  for  specific  performance. 

1  Bradford  v.  Foster,  87  Tenn.  4,  9  S.  W.  195,  denial  of  liability  and 

refusal  to  consider  question  of  sale,  renders  formal  tender  of  price 
before  suit  unnecessary. 

2  Stanton  v.  Singleton,  (Cal.)  54  P.  587,  reversed  on  other  grounds,  in  126 

Gal.  657,  59  P.  146,  47  L.  R.  A.  334;  and  the  same  rule  applies  to  the 
performance  of  other  conditions  by  the  optionee,  George  etc.  Co.  v. 
Maxwell,  78  Ohio  St.  54,  84  N.  E.  595;  this  rule  has  reference  only 
to  tender  or  payment  and,  of  course,  does  not  excuse  the  optionee 
from  performing  or  tendering  performance  before  suit  or  in  his 
complaint;  see,  also,  Harper  v.  Runner,  85  Neb.  343,  123  N.  W.  313; 
U.  B.  Blalock  &  Co.  v.  W.  D.  Clark  &  Bro.,  133  N.  C.  306,  45  S.  E. 
642;  Osgood  v.  Skinner,  211  HI.  229,  71  N.  E.  869. 


§  927  LAW  OF  OPTION  CONTRACTS  460 

And  the  same  conclusion  is  reached  in  another 
case^  where,  prior  to  the  expiration  of  the  time  limit 
of  the  option,  the  optionee  advised  the  optionors 
that  he  intended  to  accept  it  and  before  the  expira- 
tion of  the  option,  the  optionors  notified  the 
optionee  they  had  withdrawn  the  option  and  would 
no  longer  abide  by  the  same,  whereupon  the 
optionee  notified  the  optionors  of  his  election  and 
that  he  was  prepared  to  pay  the  full  purchase  price. 
The  court  applied  the  old  rule  that  the  law  does  not 
require  idle  acts  and  correctly  held  the  conduct  of 
the  optionors  waived  the  necessity  of  an  actual  ten- 
der of  the  price,  it  appearing  that  the  optionee  was 
ready,  able  and  willing  to  pay  the  price  and  receive 
the  deed. 

Sec.  927.  TIME  OF  PAYMENT.  WAIVER. 
NATURE  AND  ESSENTIALS  OF  ACTS  TO 
CONSTITUTE.— It  is  the  general  rule  that  where 
tender  of  an  act  as  performance  is  necessary  to 
establish  any  right  against  another  party,  tender  or 
offer  of  performance  is  waived  or  becomes  unneces- 
sary when  it  is  reasonably  certain  that  the  offer 
will  be  refused,  that  is,  that  payment  or  perform- 
ance will  not  be  accepted.^  However,  as  stated  in 
the  rule,  it  must  be  reasonably  certain  that  the  other 
party  will  refuse  to  accept  performance  of  the  act 
if  tendered.  Thus,  the  assertion  by  the  optionor 
that  he  will  be  unable  or  will  refuse  to  perform,  is 
not  necessarily  a  refusal  of  performance  on  his  paii: 
so  as  to  excuse  timely  payment  or  tender.  To  work 

8  Winslow  V.  Dundom,  46  Mont.  71,  125  P.  136. 
1  Gaylord  v.  McCoy,  161  N.  C.  685,  77  S.  E.  959. 


461  PAYMENT — WAIVER  AND  ESTOPPEL  §  928 

this  result  there  must  be  a  distinct,  unequivocal  and 
absolute  refusal  and  it  must  be  treated  and  relied 
on  by  the  optionee  as  such;^  and  it  must  be  final. 
Consequently  where  a  refusal  is  made  to  depend 
upon  the  fact  whether  the  optionee  and  another 
person  would  agree,  and  the  optionor  expressly 
states,  in  a  letter  to  the  optionee  that  if  there  was 
no  such  agreement,  he  was  to  let  the  optionor  know, 
a  tender  is  not  excused.^ 

The  denial  of  the  right  to  make  tender,  or  the 
positive  and  unqualified  assertion  by  the  optionor 
that  henceforth  he  is  not  bound,  is,  in  effect,  a 
waiver  of  strict  performance,  and  a  notice  that  the 
optionee  may  as  well  proceed  in  due  time  to  the 
enforcement  of  the  obligation ;  as  otherwise,  no  per- 
formance could  be  obtained  at  his  hands.* 

Sec.  928.  TIME  OF  PAYMENT.  WAIVER 
AND  ESTOPPEL.  CONDUCT  OF  OPTIONOR 
GENERALLY. — If  the  optionee  does  not  make  a 
tender  in  time  owing  to  negotiations  with  the 
optionor  to  induce  his  wife  to  join  in  a  deed  of 
conveyance  to  him,  the  condition  of  the  agreement 
with  respect  to  the  time  of  payment  is  waived.^  So, 
where  pending  negotiations  for  an  accounting  of 

2  Borst  V.  Simpson,  90  Ala.  373,  7  So.  814,  holding  notice  of  revocation 
is  not  an  absolute  refusal  as  applied  to  payment  as  an  act  of  election. 

SBeiseker  v.  Amberson,  17  N.  D.  215,  116  N.  W.  94. 

4Clarno  v.  Grayson,  30  Ore.  Ill,  46  P.  426,  431. 

1  Mansfield  v.  Hodgdon,  147  Mass.  304,  17  N.  E.  544. 

So  where  the  purchaser  prevents  the  vendor  from  repaying  the  pur- 
chaser (option  to  repurchase)  within  the  option  time,  by  interfering 
with  negotiations  by  him  for  sale  of  property,  in  pursuance  of  con- 
spiracy to  force  vendor  to  part  with  the  property  at  less  than  its 
value,  Breyfogle  v.  Walsh,  80  Fed.  172,  25  C.  C.  A.  357. 


§  929  LAW    OF    OPTION    CONTRACTS  462 

rents  to  be  applied  on  tlie  option  price  and  costs 
of  improvements,  the  option  time  expired  while  the 
negotiations  were  going  on  and  thereupon  the 
optionor  declined  further  to  consider  the  matter 
and  terminated  the  negotiations,  it  was  held  that  a 
strict  performance  of  the  contract  by  the  optionee 
was  waived  and  that  his  rights  could  not  be  for- 
feited without  reasonable  notice."  The  same  ruling 
was  made  in  another  case  where  part  of  the  price 
was  paid  within  the  stipulated  time  but  full  pay- 
ment was  prevented  or  delayed  by  the  objections  of 
the  optionor  to  statements  of  account  between  the 
parties,  thereby  postponing  payment  beyond  the 
time  limit.  ^ 

The  optionee  gave  timely  and  proper  notice  of 
election  and  the  optionor  refused  to  execute  the 
contract  of  sale  unless  it  contained  certain  provi- 
sions not  required  by  the  option,  and  the  optionee 
refused  to  accept  such  a  contract ;  on  the  day  named 
for  the  conveyance,  the  optionor  tendered  a  deed  in 
accordance  with  the  option,  but  the  optionee  did 
not  then  have  the  money  ready  because  he  had 
assumed  the  optionor  would  not  tender  a  proper 
deed,  and  it  was  held  there  was  no  breach  on  the 
part  of  the  optionee.^ 

Where  the  optionor  orally  extends  the  time  for 
making  payment  under  the  option,  he  is  estopped 
from  taking  advantage  of  a  non-compliance  with 
the  terms  of  the  option,  and  the  optionee  has  the 

2  Henion  v.  Bacon,  91  N.  Y.  S.  399,  100  App.  Div.  99. 

3  Wilkins  v.  Evans,  1  Del.  Ch.  156. 

4  Boyd  V.  DeLancey,  45  N.  Y.  S.  693,  17  App.  Div.  567. 


463  PAYMENT — WAIVER  AND  ESTOPPEL  §  929 

extended  time  within  which  to  perform.^  So,  where 
the  optionor  informs  the  optionee  that  he  does  not 
care  how  the  instalhnents  are  paid.  In  such  case, 
there  is  a  waiver  of  timely  payments  and  payment 
of  the  past  due  installments  within  10  days  after 
notice  of  forfeiture  for  default,  is  in  time.® 

Where  the  optionor  incapacitates  himself  from 
complying  with  the  option  contract  by  disposing  of 
the  land  to  a  third  person,  the  optionee  need  not 
make  tender,  under  the  option,  in  order  to  hold  the 
optionee  liable  in  damages.^  So,  where  the  optionor 
prevents  the  optionee  from  performing  the  condi- 
tions of  the  option.* 

Sec.  929.  SAME  CONTINUED.— The  mere 
fact  that  the  optionor  demanded  pajnnent  in  excess 
of  the  amount  due  under  the  option  is  not  a  waiver 
of  the  optionor 's  right  to  declare  the  contract  for- 
feited for  non-pa^Tnent  at  maturity  of  an  install- 
ment of  the  price.  ^ 

The  furnishing  of  an  abstract  by  the  optionor  five 
days  after  the  stipulated  time,  where  the  same  is 
received  by  the  optionee  without  objection  and 
approved,  does  not  excuse  the  optionee  from  a  delay 

5  Scott  V.   Hubbard,  67  Ore.  498,   136  P.  653. 

6  Noyes  v.  Schlegel,  9  Cal.  App.  516,  99  P.  726,  and  the  waiver  applied 

also  to  option  on  adjoining  lots. 

7  Palmer  v.  Clark,  52  Wash.  345,  100  P.  749;  Chesbrough  v.  Vizard,  156 

Ky.  149,  160  S.  W.  725;  Cuminings  v.  Nielson,  42  Utah  157,  129 
P.  619;  but  this  rule  does  not  apply  where  the  contract  binds  the 
"assignee"  of  the  parties,  Merritt  v.  Joyce,  117  Minn.  235,  135 
N.  W.  820;  Cumberledge  v.  Brooks,  235  HI.  249,  85  N.  E.  197. 

8  Stanton  v.  Singleton,  (Cal.)  54  P.  587;  Wilkins  v.  Evans,  1  Del.  Ch.  156. 
1  Champion  G.  Min.  Co.  v.  Champion  :\lines,  164  Cal.  205,  128  P.  315. 


§  930  LAW   OP   OPTION   CONTRACTS  464 

in  failing  to  make  payment  of  the  price  within  the 
contract  time,  the  abstract  having  been  furnished 
to  the  optionee  in  time  to  make  the  payment  had 
he  so  desired  f  but  it  is  otherwise  where  the  abstract 
required  to  be  furnished  by  the  optionor  is  fur- 
nished by  him  as  to  part  of  the  lands  after  the 
expiration  of  the  time  limit  for  making  the  pay- 
ment.^ 

A  statement  by  an  optioi.or  that  he  failed  to 
execute  a  deed  because  his  wife  refused  to  join 
therein  is  not  a  waiver  of  the  cash  payment 
required  by  the  option/ 

Under  a  contract  to  repurchase  stock,  failure  of 
the  seller  to  answer  a  letter  from  the  purchaser 
which  merely  offers  to  tender  the  stock,  is  not  a 
waiver  of  actual  tender.^ 

Sec.  930.  TIME  OF  PAYMENT.  WAIVER 
AND  ESTOPPEL.  REFUSAL  AND  REPUDI- 
ATION BY  OPTIONOR.  GENERALLY.— The 
refusal   by   the   optionor   to    deliver   the   cotton 

2  Kentucky  etc.  Co.  v.  Warwick  Co.,  109  Fed.  280,  48  C.  C.  A.  363. 

See  Lechner  v.   Strauss,   50   Ind.  App.   414,   98   N.   E.   444,  involving 

waiver   by   optionee   of   extension   of   time   to   deliver   abstract   for 

approval. 
.      Kelsey  v.  Crowther,  162  U.  S.  404,  40  L.  Ed.  1017,  16  S.  Ct.  808,  where 

payment  was  held  necessary  within  stipulated  time  though  optionor 

did  not  furnish  abstract. 
Smith  V.  Miller,  54  Ind.  App.  37,  101  N.  E.  316,  payment  held  necessary 

in  time  fixed,  the  optionor  making  a  survey  called  for  by  the  contract, 

and  the  optionee   delayed  because   he  claimed   the   survey   was   not 

complete. 

3  Moore  v.  Beiseker,  147  Fed.  367,  77  C.  C.  A.  545. 

4  Bowen  v.  McCarthy,  85  Mich.  26,  48  N.  W.  155,  nor  is  the  fact  that 

the  optionor  never  formally  withdrew  the  option.   Id. 

eOlsen  T.  Northern  S.  S.  Co.,  70  Wash.  493,  127  P.  112. 


465  PAYMENT — WAIVER  AND  ESTOPPEL  §  930 

optioned  because  the  price  has  gone  up,  makes  it 
unnecessary  for  the  optionee  to  make  tender  of 
actual  cash  to  entitle  him  to  damages  for  non- 
delivery.^ 

Refusal  of  the  optionor  to  deliver  his  deed 
excuses  tender  of  the  price  f  so,  where  long  before 
the  expiration  of  the  option,  the  optionee  had  word 
that  the  optionor  would  not  give  a  deed  to  the 
property  embraced  in  the  option;^  or,  where  the 
optionor  tenders  a  deed  before  the  expiration  of 
the  stipulated  time  which  omitted  part  of  the 
optioned  land  and  notified  the  optionee  the  balance 
would  not  be  conveyed,  and  refused  to  settle  a 
creditor's  suit.^  So,  where  the  optionor,  before  suit 
was  commenced,  informed  the  optionee  that  he  was 
not  bound  by  the  option  f  or,  that  no  payments  of 
any  kind  would  thereafter  be  accepted;^  or,  de- 
clared the  stock  to  be  repurchased  was  worthless, 

1  U.  B.  Blalock  &  Co.  v.  W.  D.  Clark  &  Bro.,  133  N.  C.  306,  45  S.  E.  642. 
The  rule  is  applicable  only  to  the  party  who  ' '  first ' '  makes  known  he 

will  not  accept  performance,   Beddow  v.  Flage,   22  N.  D.  53,   132 
N.  W.  637,  639. 

2  Houghwout  V.  Boisaubin,  18  N.  J.  Eq.  315;  Phelps  v.  Davenport,  151 

N.  C.  22,  65  S.  E.  459. 
Cape  Fear  L.  Co.  v.  Small,  84  S.  C.  434,  66  S.  E.  880,  optionor  objected 
to  deed  tendered  by  optionee  as  containing  unauthorized  conditions 
but  which  were  waived  by  optionee. 

3  Shattuck   V.   Cunningham,    166   Pa.   368,   31   Atl.    136,   there   was   an 

agreement  for  waiver  of  tender  made  by  attorney  of  optionor,  but 
never  signed  by  the  optionor. 

4  Gaylord  v.  McCoy,  161  N.  C.  685,  77  S.  E.  959. 

B  Kreutzer  v.  Lynch,  122  Wis.  474,  100  N.  W.  887 ;  Eeynolds  v.  O  'Neil, 
26  N.  J.  Eq.  223,  tender  before  suit  was  not  necessary. 
"Refusal,  etc.,  by  one  of  several  heirs  who  had  succeeded  to  the  optioned 
property,  Eockland  etc.  Co.  v.  Leary,  203  N.  Y.  469,  97  N.  E.  43, 
Ann.  Cas.  1913B,  62. 

fl  West  V.  Washington  etc.  E.  Co.,  49  Ore.  436,  90  P.  666. 
30 — Option  Contracts. 


jj  931  LAW  OF  OPTION   COxVTRACTS  466 

and  that  he  did  not  want  it  ;^  or,  that  he  would  not 
convey;^  or,  that  a  tender  would  be  refused;®  or, 
denied  the  right  of  the  optionee  to  purchase  under 
the  lease.^® 

The  repudiation  of  the  agreement  by  the 
optionor,  after  the  expiration  of  the  time  limit, 
does  not  excuse  a  failure  of  the  optionee  to  make 
tender  before  expiration  of  the  time;*^  but  it  is 
otherwise  where  the  act  of  repudiation  occurs 
before  the  expiration  of  the  option  time/^ 

Sec.  931.  TIME  OF  PAYMENT.  WAIVER 
BY  ACCEPTING  PAST  DUE  PAYMENTS.— 
The  rule  is,  that  notwithstanding  time  of  payment 
is  made  essential  either  expressly  or  by  implication, 
still  if  the  vendor  accepts  installments  of  the  price 
after  they  are  due,  with  knowledge  of  the  facts, 
there  is  a  suspension  of  the  right  of  forfeiture 
which  can  only  be  revived  by  giving  definite  notice 
to  the  purchaser  of  an  intention  to  enforce  the  time 
provision  of  the  agreement  as  to  future  install- 

7  Williams  v.  Patrick,  177  Mass.  160,  58  N.  E.  583. 

8  Beddow  v.  Flage,  22  N.  D.  53,   132  N.  W.  637 ;   Gaylord  v.  McCoy, 

161  N.  C.  685,  77  S.  E.  959;   Harper  v.  Eunner,  85  Neb.  343,  123 
N.  W.  313. 

»Finlen  v.  Heinze,  32  Mont.  354,  80  P.  918;  see  McCormick  v.  Hickey, 
56  N.  J.  Eq.  848,  42  Atl.  1019. 

10  Dowd  V.  Clarke,  54  Cal.  48,  the  tender  lacked  interest  due;  Winslow  v. 

Dundom,  46  Mont.  71,  125  P.   136. 

11  Heine  v.  Treadwell,  72  Cal.  217,  13  P.  503. 

12  Stanton  v.  Singleton,   (Cal.)   54  P.  587;   Tevis  v.  Tevis,  259  Mo.   19, 

167  S.  W.  1003. 
Where  first  tender  is  refused,  a  second  tender  is  not  necessary,  PaddeU 
V.  Janes,  145  N.  Y.  S.  868. 


467  PAYMENT — WAIVER   AND  ESTOPPEL  §  931 

ments/  allowing,  of  course,  a  reasonable  time  to 
the  vendee  to  comply  therewith.^  But  a  waiver  of 
default  in  the  timely  payment  of  one  installment 
will  not  operate  as  a  waiver  of  a  subsequent  fail- 
ure.^ 

Where  a  deed  provides  for  a  repurchase  of  the 
property  within  two  years,  the  option  to  repurchase 
survives  after  such  time  when  the  grantee  receives 
remittances  on  the  investment  thereof  at  a  lower 
per  cent  than  provided  in  the  deed.* 

The  receipt  by  a  lessor  of  rent,  after  it  was  due, 
under  a  lease  and  option  to  purchase,  made  for- 
feitable on  failure  to  pay  rent  at  maturity,  was  not 
a  waiver  of  the  time  of  payment,  as  a  condition 
precedent  to  the  exercise  of  the  option,  because  of 
the  dual  nature  of  the  lease-option,  rendering  pay- 
ment of  the  rent  payable  under  the  lease  without 
regard  to  the  option;^  but  there  is  a  waiver  by 
receiving  rent  after  it  is  due  under  a  lease-option 

1  Stevinson  v.  Joy,  164  Gal.  279,  128  P.  751. 

Acceptance  of  payment  by  vendors  after  forfeiture  and  resale  by  him 
to  third  person,  does  not  work  a  waiver  as  against  the  third  person, 
Northern  Assur.  Co.  v.  Stout,  16  Cal.  App.  548,  117  P.  617. 

2  Gray  v.  Pelton,  67  Ore.  239,  135  P.  755 ;  Scott  v.  Hubbard,  67  Ore.  498, 

136  P.  653;  Douglas  v.  Hanbury,  56  Wash.  63,  104  P.  1110. 

3  Gray  v.  Pelton,  supra;  Boone  v.  Templeman,  158  Cal.  290,  110  P.  947. 

4  Connolly  v.  Keenan,  87  N.  Y.  S.  630,  42  Misc.  Rep.  589. 

5  Brown  v.  Larry,  153  Ala.  452,  44  So.  841;  see  Sec.  717,  note  2. 

See  Davis  v.  Eobert,  89  Ala.  402,  8  So.  114,  18  A.  S.  R.  126,  holding 
waiver  where  the  contract  for  leasing  provided  for  conveying  the 
property  upon  full  payment  of  rent  for  term  without  further  or  other 
consideration. 

Also  Noyes  v.  Schlegel,  9  Cal.  App.  516,  99  P.  726,  where  waiver  by 
receiving  past  due  installment  was  held  to  go  to  the  entire  coutiact 
and  therefore  to  option  in  adjacent  lots. 


§  932  LAW  OF  OPTION   CONTRACTS  468 

providing  that  if  the  lessee  keeps  all  the  conditions 
of  the  lease  he  may  purchase  the  leased  lands.® 


Sec.  932.  TIME  OF  PAYMENT.  WAIVER 
BY  RECOGNITION  OF  OPTIONEE'S 
RIGHTS. — If  the  vendor,  after  the  expiration  of 
the  stipulated  time,  recognizes  the  right  of  the 
vendee  to  the  property  and  asks  to  have  refunded 
to  him  the  taxes  on  the  same  for  one  year  which 
had  been  paid  on  it  subsequent  to  the  expiration  of 
the  time  limit,  the  vendee  having  paid  all  other 
taxes,  a  waiver  of  the  time  stipulated  for  the  pay- 
ment of  the  purchase  money,  may  be  inferred.^  So, 
where  an  abstract  of  title  is  furnished  to  part  of 
the  lands  optioned  after  the  expiration  of  the  time 
to  make  payment  of  an  installment  of  the  price, 
and  was  furnished  with  a  view  to  the  performance 
of  the  contract  by  the  optionee.^ 

Where  the  lessor-optionor,  after  default  by  the 
optionee  in  pa}anent  of  the  price,  and  to  complete 
the  contract,  threatens  hostile  measures  to  compel 
the  completion  of  the  contract  and  gives  notice  that 
the  contract  must  be  complied  with  in  six  weeks, 
which  the  court  holds  was  not  a  reasonable  time 
under  the  circumstances  to  complete  the  contract, 
the  default  of  the  optionee  is  waived  by  the  insis- 
tence of  the  optionor  on  the  completion  of  the 
contract.^    So,  where,  after  failure  at  the  time  of 

6  Mack  V.  Dailey,  67  Vt.  90,  30  Atl.  686. 

1  Mix  V.  Balduc,  78  HI.  215. 

2  Moore  v.  Beiseker,  147  Fed.  367,  77  C.  C.  A.  545. 

sPegg  V.  Wisden,  16  Beav.  239,  16  Jur.  1105,  51  Eng.  Reprint  770; 
see  Mathews  Slate  Co.  v.  New  Empire  Slate  Co.,  122  Fed.  972,  operat- 
ing under  mining  lease  after  notice  to   terminate. 


469  PAYMENT — WAIVER   AND   ESTOPPEL  §  932 

election,  to  pay  an  installment  of  the  price  as 
required,  the  optionor,  upon  tender  of  the  install- 
ment, acknowledges  the  option  agreement  for 
record,*  or  informs  the  vendee  he  does  not  care 
how  the  installments  are  paid  so  long  as  he  has  the 
money  in  the  time  fixed  by  the  contract.^ 

The  optionor,  by  requesting  a  postponement  of 
the  tender,  thereby  impliedly  recognizes  the  valid- 
ity of  the  option  and  is  thereby  estopped  to  claim 
the  agreement  is  invalid  under  the  Statute  of 
Frauds.® 

On  the  other  hand,  when,  after  the  expiration  of 
the  time  limit,  tender  is  made,  the  fact  that  the 
optionor  insisted  upon  payment  of  taxes  and 
expenses  before  the  deed  would  be  delivered,  can 
not  be  construed  as  a  recognition  of  the  binding 
force  of  the  original  option  after  its  expiration/ 

The  receipt  of  rent  after  it  is  past  due  under  a 
lease  containing  an  option  to  purchase,  is  not  a 
recognition  of  the  existence  of  the  option  contained 
therein  f  but  it  is  otherwise  where  the  contract  for 
leasing  contemplates  that  upon  payment  of  the  rent 
for  the  full  term,  the  leased  property  shall  be  con- 
veyed to  the  lessee  without  payment  of  further 
consideration.* 

4  Barnes  v.  Eea,  219  Pa.  279,  68  Atl.  836;  Barnes  v.  Hustead,  219  Pa. 

287,  68  Atl.  839. 

5  Noyes  v.  Schlegel,  9  Cal.  App.  516,  99  P.  726. 

6  Alston  V.  ConneU,  140  N.  C.  485,  58  S.  E.  292. 

7  Nelson  t.  Stephens,  107  Wis.  136,  82  N.  W.  163. 

8  Brown  v.  Larry,  153  Ala.  452,  44  So.  841. 

9  Davis  V.  Robert,  89  Ala.  402,  8  So.  114,  18  A.  S.  R.  126. 


§  933  LAW  OP  OPTION  CONTRACTS  470 

Sec.  933.  TIME  OF  PAYMENT.  WAIVER 
AND  ESTOPPEL.  EVASION  BY  OPTIONOR 
AND  ABSENCE.— If  the  election  is  timely  made 
and  subsequently,  but  within  the  optioned  time,  the 
optionee  attempts  in  good  faith,  to  make  a  stipu- 
lated payment  to  the  optionor  which  was  payable 
at  the  time  of  election,  and  the  optionor  evades  and 
prevents  tender  within  the  stipulated  time,  and  the 
optionee  on  the  last  day,  files  a  bill  for  specific  per- 
formance and  deposits  the  money  in  court,  such 
conduct  on  the  part  of  the  optionor  waives  formal 
timely  payment  or  tender,  the  court  saying  that  to 
require  tender,  under  such  circumstances  would 
not  only  be  without  precedent  but  contrary  to  every 
principle  of  justice  and  equity.^ 

When  the  optionee  makes  an  election  and  gives 
notice  in  time,  but  is  not  able  to  make  actual  pay- 

1  Brewer  v.  Sowers,  118  Md.  681,  86  Atl.  228,  the  attempt  to  pay  was 
made  three  times  at  the  residence  of  the  optionor  before  the  expira- 
tion of  the  time  limit;  it  is  not  apparent  why  on  the  facts  this  in 
itself  was  not  sufficient  in  law  as  a  tender,  the  optionor  evading; 
also  Emerson  v.  Fleming,  246  El.  353,  92  N.  E.  890. 

See  Guilford  v.  Mason,  22  R.  I.  422,  48  Atl.  386,  the  optionor  evading, 
technical  common  law  tender  was  held  unnecessary,  the  optionee  being 
ready,  etc.,  under  an  option  by  its  terms  requiring  payment  as  an  act 
of   election. 

Schaeffer  v.  Coldren,  237  Pa.  77,  85  Atl.  98,  Ann.  Gas.  1914B,  195, 
where  optionor  was  at  home  and  optionee  was  not  able  to  gain 
admission,  the  court  saying  that  it  has  been  frequently  held  that  acts 
in  themselves,  insufficient  to  make  a  complete  tender,  may  operate 
as  proof  of  readiness  to  perform  so  as  to  protect  the  rights  of  the 
optionee  when  proper  tender  is  made  impossible  by  reason  of  cir- 
cumstances not  due  to  the  fault  of  the  optionee. 

A  vendor  who  intentionally  avoids  giving  the  purchaser  an  opportunity 
to  make  a  tender,  may  not  thereafter  in  a  suit  by  the  purchaser  for 
specific  performance  be  heard  to  complain  of  the  absence  of  a  tender, 
Connely  v.  Haggarty,  68  N.  J.  Eq.  794,  64  Atl.  1133;  see  Ebert 
V.  Arends,  190  111.  221,  60  N.  E.  211. 


471  PAYMENT — WAIVER   AND   ESTOPPEL  §  934 

ment  or  tender  of  the  price  until  a  few  days  after 
the  expiration  of  the  time  limit,  owing  to  the 
absence  of  the  optionor,  but  makes  tender  immedi- 
ately upon  his  return,  the  delay  will  be  excused, 
the  optionee  having  made  improvements.-  In 
another  case,  a  lessee  under  a  lease  with  option  to 
purchase,  entered  into  possession  and  made 
improvements,  but  was  unable  to  make  payment  of 
the  price  until  a  few  days  after  it  was  due  because 
of  the  absence  of  the  lessor.  Upon  return  of  the 
lessor  ten  days  later,  the  lessee  tendered  the  pur- 
chase money  and  demanded  a  deed,  and  it  was  held 
time  of  payment  was  not  of  the  essence  of  the 
contract  and  that  equity  would  compel  specific  per- 
formance at  the  suit  of  the  lessee.^ 

Sec.  934.  TIME  OF  PAYMENT.  WAIVER 
ARISING  UNDER  OPTIONS  LIKE  "FIRST 
REFUSALS."— Where  the  optionee  has  a  "re- 
fusal" of  the  land  at  a  price  as  low  as  any  other 
bona  fide  offer  for  it,  and  the  optionor  sells  the 
land  to  a  third  person  without  giving  the  optionee 
the  refusal  thereof,  a  tender  of  the  price  by  the 
optionee  is  not  essential  to  a  suit  for  specific  per- 
formance, an  offer  to  pay  the  amount  the  optionor 
received  for  the  land  being  sufficient,  as  it  was  the 
duty  of  the  optionor  to  make  known  to  the  optionee 

2  Sizer  v.  Clark,  116  Wis.  534,  93  N.  W.  539,  in  this  case  the  court  ruled 
payment  and  delivery  of  deed  were  concurrent  acts,  see  Guilford  v. 
Mason,  supra;  Holmes  v.  Myles,  141  Ala.  401,  37  So.  588;  Clark  v. 
Sears,  3  Iowa  104. 

s  Wilson  V.  Herbert,   76   Md.  489,  25  Atl.  685. 


§  935  LAW  OF  OPTION  CONTRACTS  472 

the  offer  of  the  third  person,  a  duty  which  he  failed 
to  perform.^ 

In  another  case,  an  option  was  given  to  purchase 
the  property  at  any  price  that  might  be  offered  by 
a  third  person.  The  optionor  sold  the  land  without 
giving  the  optionee  notice  or  an  opportunity  to 
purchase.  It  appeared  the  optionee  was  able,  etc., 
to  purchase,  and  would  have  done  so,  if  he  had  been 
given  an  opportunity.  The  optionee  brought  suit 
to  recover  damages  for  breach  of  the  contract, 
alleging  in  his  complaint  the  above  facts,  and  it  was 
held,  in  effect,  that  election  or  tender  was  not 
necessary  to  maintain  the  suit.^ 

Sec.  935.  TIME  OF  PAYMENT.  WAIVER 
BY  ONE  JOINT  OPTIONOR.— The  refusal  to 
convey  by  one  of  several  heirs  who  has  succeeded 
to  the  optioned  property,  and  to  whom  notice  of 
election  has  been  given,  waives  the  necessity  of 
tendering  the  price. ^  Likewise,  the  refusal  of  one 
of  two  persons  jointly  contracting  to  purchase 
stock,  to  purchase  and  pay  for  it,  when  the  stock 
is  tendered  to  him  for  purchase,  is  a  tender  to  and 
refusal  by  both.^ 

Notice  by  the  seller  of  stock  under  an  agreement 
by  him  to  repurchase,  to  one  of  the  joint  pur- 

1  Cummings  v.  Nielson,  42  Utah  157,  129  P.  619. 

2  Pearson  v.  Home,  139  Ga.  453,  77  S.  E.  387. 

1  Rockland  etc.  Co.  v.  Leary,  203  N.  Y.  469,  97  N.  E.  43,  Ann.  Cas.  1913B, 

62 ;  also  Kerr  v.  Purdy,  51  N.  Y.  629,  reversing  50  Barb.  24. 

2  Hoover  v.  Wolfe,  167  Cal.  337,  139  P.  794;  see  Williams  v.  Patrick,  177 

Mass.  160,  58  N.  E.  583. 


473  PAYMENT — WAIVER  AND  ESTOPPEL  §§  936,  937 

chasers,  of  a  repudiation  of  the  agreement,  is  avail- 
able as  a  waiver  by  the  other  joint  purchaser.' 

Under  a  power  conferred  upon  two  executors  to 
sell  land,  the  power  must  be  exercised  by  them 
jointly  and  hence  a  waiver  of  tender  by  one  does 
not  bind  the  other.* 


Sec.  936.  TIME  OF  PAYMENT.  WAIVER. 
EFFECT  OF  ENCUMBRANCES,  DOWER 
RIGHT,  ETC. — A  strict  tender  is  not  necessary 
where  there  is  an  outstanding  right  of  dower  in  the 
widow  of  the  optionor  as  the  amount  to  be  tendered 
can  not  be  known  without  a  judgment  of  a  court  of 
law.^  In  another  case,  from  the  same  state,  the 
lessee-optionee  elected  to  purchase  by  making 
costly  permanent  improvements,  and  was  ready 
with  the  money  to  make  the  tender,  but  did  not  do 
so  because  the  premises  were  encumbered  by  a 
dower  right  and  by  mortgage,  and  also  because  one 
or  more  of  the  heirs  of  the  lessor  had  previously 
declared  their  intention  not  to  execute  a  deed  under 
the  belief  that  they  were  not  obligated  to  do  so,  and 
it  was  held  that  a  strict  tender  was  not  necessary.^ 

Sec.  937.  TIME  OF  PAYMENT.  DEATH  OF 
OPTIONOR. — Where  the  optionor  dies  before  the 
expiration  of  the  time  limit,  the  filing  of  a  suit  for 

3  Osgood  V.  Skinner,  211  Bl.  229,  71  N.  E.  869. 

4Trogden   v.    Williams,    144   N.   C.    192,    56    S.    E.    865,    10    L.    E.    A. 

(N.  S.)   867. 

1  Rockland  etc.  Co.  v.  Leary,  203  N.  Y.  469,  97  N.  E.  43,  Ann.  Cas.  1913B, 

62,  8.  c.  117  N.  Y.  S.  405,  133  App.  Div.  379. 

2  Kerr  v.  Purdy,  51  N.  Y.  629,  reversing  s.  c.  50  Barb.  24. 


§  938  LAW   OP    OPTION    CONTRACTS  474 

specific  performance  by  the  optionee  a  few  days 
before  the  expiration  of  the  time  limit,  offering  in 
the  bill  to  pay  the  stipulated  option  price,  is  a  sub- 
stantial compliance  by  the  optionee,  and  the  fact 
that  the  money  was  not  paid  upon  the  tender  is 
immaterial/ 

Sec.  938.  TIME  OF  PAYMENT.  ACCIDENT 
AND  MISTAKE. — Where  the  lessee  was  pre- 
vented from  giving  notice  to  renew  the  lease  within 
the  stipulated  time,  by  reason  of  imavoidable  acci- 
dent and  physical  injury,  but  served  it  at  the 
earliest  opportunity,  and  the  lessee  suffered  no  loss 
from  delay,  equity  will  grant  specific  performance 
of  the  covenant  to  renew,  notwithstanding  time  was 
expressly  made  of  the  essence  of  the  covenant.^ 

The  optionee  lost  his  duplicate  copy  of  the  agree- 
ment and,  in  a  conversation  with  the  optionor  prior 
to  the  expiration  of  the  stipulated  time,  the 
optionor  stated  the  time  was  later  than  it  was  in 
fact.  It  was  held  the  optionee  was  not  excused  of 
his  failure  to  make  payment  at  the  time  fixed,  it 
not  appearing  the  optionee  applied  to  the  optionor 
for  inspection  of  the  contract  in  his  possession,  or 
made  any  effort  to  ascertain  the  date  when  the 
money  w^as  payable  f  but  specific  performance  was 
granted  in  a  case  where  the  delay  was  caused  by 

1  Maughlin  v.  Perry,  35  Md.  352. 

1  Monihon  v.  Wakelin,  6  Ariz.  225,  56  P.  735;  Ahl  v.  Johnson,  1  Minn. 

215;  in  re  Moore's  Estate,  191  Pa.  600,  43  Atl.  474,  sickness. 

2  McKenzie  v.  Murphy,  31  Colo.  274,  72  P.  1075. 


475  PAYMENT — WAIVER — EXTENSIONS  §  939 

mistake  of  the  vendee  in  entering  the  wrong  date 
for  pajrment  in  a  calendar  of  his  engagements.* 

Sec.  939.    TIME  OF  PAYMENT.    WAIVER 
UNDER  AGREEMENT  FOR  EXTENSION.— 

Where  plaintiff  did  not  pay  the  full  price  ($100) 
within  the  fixed  time  but  did  pay  $90,  and  defen- 
dant extended  the  time  to  pay  the  $10  until  the 
next  day,  an  offer  the  next  day  to  pay  the  balance 
will  be  good  and  will  entitle  plaintiff  to  specific 
performance.^  If  the  vendee  is  induced  by  a  sub- 
sequent oral  agreement  for  extension  of  the  time 
of  payment,  to  make  default  in  payment  as  called 
for  by  the  written  agreement,  the  vendor  can  not, 
in  equity,  invoke  the  statute  of  frauds  (requiring 
the  extension  to  be  in  writing)  in  order  to  make 
the  oral  agreement  invalid,^  and,  generally,  where 
the  optionor  agrees  to  extend  the  time  for  perform- 
ance and  puts  the  optionee  off  his  guard,  the 
optionor  will  be  estopped  from  taking  advantage 
of  non-performance  by  the  optionee  within  the  time 

3  Shipman  v.  Cummins,  65  Hun.  620,  19  N.  Y.  S.  974. 

1  Gira  v.  Harris,  14  S.  D.  537,  86  N.  W.  624.  The  court  said:  "The 
defendant,  after  giving  plaintiffs  to  understand  that  he  would  accept 
the  money  in  the  morning,  can  not  in  justice  and  equity,  be  permitted 
to  now  say  that  the  full  amount  was  not  tendered  on  the  7th,  for 
the  presumption  may  be  reasonably  indulged  in  that,  had  not  the 
plaintiffs  been  misled  by  the  conduct  of  the  defendant,  they  could 
and  would  have  procured,  and  tendered  the  balance  on  the  evening 
of  the   7th." 

2Kiiigsley  v.  Kressley,  60  Ore.  167,  118  P.  678,  Ann.  Cas.  1913E  746; 
see  Alston  v.  Connell,  140  N.  C.  485,  53  S.  E.  292;  Kingston  v. 
Walters,  16  N.  M.  59,  113  P.  594;  Spolek  v.  Hatch,  21  S.  D.  .>  ', 
113  N.  W.  75;  Bowman  v.  Banks,  83  Ark.  524,  104  S.  W.  20!\ 


§  940  LAW  OF  OPTION  CONTRACTS  476 

first  agreed  upon,  and  the  optionee  will  have  the 
extended  time  within  which  to  perform.' 

A  lessee  supposing  that  his  option  to  purchase 
ran  to  March  24,  1887,  applied  to  the  assignee  of 
the  lessor's  interest,  prior  to  March  1,  1887,  for  an 
extension  for  two  years.  The  latter  agreed  to  give 
him  an  answer  March  7,  1887.  On  that  day  the 
lessee  tendered  the  amount  stipulated  in  the  lease 
as  the  price,  and  it  was  held  specific  performance 
would  be  decreed  whether  or  not  the  assignee  knew 
the  option  expired  March  1,  1887.* 

Statement  by  a  vendor  to  the  attorney  of  the 
vendee  in  default,  that  the  deed  could  be  found  at 
his  office,  if  the  vendee  concluded  to  waive  certain 
objections,  is  an  extension  of  time  to  complete  the 
contract.® 

Sec.  940.  TIME  OF  PAYMENT.  WAIVER. 
EFFECT  OF  POSSESSION  AND  IMPROVE- 
MENTS BY  OPTIONEE.— Possession  of  the 
land  by  the  optionee,  or  its  improvement  by  him, 
is,  in  certain  cases,  sufficient  to  excuse  delay  in 
payment,  that  is,  to  prevent  forfeiture.^ 

3  Longfellow  v.  Moore,  102  ni.  289 ;  also  Bourke  v.  Kissaek,  242  111.  233, 

89  N.  E.  990. 

4  Keyport  Brick  etc.  Co.  v.  Lorillard,   (N.  J.  Eq.)    19  Atl.  381,  affirmed, 

48  N.  J.  Eq.  295,  22  Atl.  203,  the  facts  show  the  lessor  encouraged  the 
belief  that  the  lessee  was  not  required  to  exercise  his  option  until 
the  mistaken  day,  and  thus  brought  the  case  within  the  equitable 
doctrine   of   estoppel. 

6  Marx  V.  Oliver,  246  111.  316,  92  N.  E.  864. 

1  See  Raddatz  v.  Florence  Inv.  Co.,  147  Wis.  636,  133  N.  W.  1100;  Staf- 
ford V.  Richard,  121  La.  76,  46  So.  107;  Bowman  v.  Banks,  83  Ark. 
524,  104  S.  W.  209. 


477  PAYMENT — WAIVER — POSSESSION,  ETC.  §  941 

Thus,  where,  by  the  terms  of  the  option,  the 
optionee  is  given  the  right  to  the  possession  of  the 
land  for  the  purpose  of  constructing  a  railroad,  and 
by  the  terms  of  which  it  is  to  run  trains  within  a 
year,  and  it  has  taken  possession  and  constructed 
the  railroad  and  run  its  trains  within  the  year,  time 
is  no  longer  of  the  essence  of  the  contract,  and  the 
railroad  is  entitled  to  a  deed  upon  tender  of  the 
price  after  the  expiration  of  the  year,  the  payment 
of  the  price  and  delivery  of  the  deed  being  con- 
current acts.^ 

But,  where  an  option  permitted  the  optionees  to 
enter  and  take  possession  upon  the  execution  of  the 
contract  and  to  retain  possession  so  long  as  they 
complied  with  the  conditions  of  the  option,  the  pos- 
session thereunder  was  a  mere  license  until  they 
performed  the  option  contract,  so  that  their  failure 
to  make  the  first  payment  thereunder  operated  as 
a  surrender  of  their  right  of  possession.* 

Sec.  941.  TIME  OF  PAYMENT.  WAIVER. 
EFFECT  OF  PART  PERFORIMANCE.— When 
the  optionee  has  entered  into  possession  of  the 
lands  and  has  paid  nine-tenths  of  the  price  and 

2  Byers  v.  Denver  C.  R.  Co.,  13  Colo.  552,  22  P.  951,  the  optionor  did  not 
tender  a  deed  within  the  two  years. 

SKingsley  v.  Kressly,  60  Ore.  167,  118  P.  678,  Ann.  Cas.  1913E  746; 
also  Champion  etc.  Co.  v.  Champion  Mines,  164  Cal.  205,  128  P.  315, 
tender  after  default  unavailable. 

See  Martin  v.  Morgan,  87  Cal.  203,  25  P.  350,  22  A.  S.  R.  240,  holding 
building,  plowing,  planting,  etc.,  not  sufficient;  payment  or  election 
not  having  been  made.  The  ease  should  have  turned  on  the  point  that 
election  was  not  in  time. 


§  942  LAW    OF   OPTION    CONTRACTS  478 

has  tendered  the  balance  of  the  price  due,  the 
optionee  will  not  be  denied  specific  performance, 
because  of  delay  in  payment,  time,  under  the  cir- 
cumstances, not  being  the  essence  of  the  contract/ 

Where  the  optionee  has  performed  part  of  the 
terms  of  the  option  and  is  in  possession  and  is  ready 
and  able  to  complete  the  purchase  according  to  the 
terms  of  the  option,  he  can  not  be  ejected  by  the 
optionor,  failure  of  performance  being  attributable 
to  him.^ 

Where  an  optionee  failed  to  elect  upon  which 
plan  he  would  purchase,  as  provided  in  the  option, 
and  failed  to  perform,  specific  performance  will 
not  be  granted  though  he  has  paid  part  of  the  pur- 
chase money  and  made  improvements.^  In  this 
case  suit  was  brought  long  after  the  land  had  been 
sold  to  another  person  and  no  contract  of  purchase 
was  in  fact  ever  made. 

Sec.  942.  TIME  OF  PAYMENT.  TENDER 
IN    PLEADINGS    AND    MISCELLANEOUS 

CASES. — Tender  of  the  balance  of  the  purchase 
money  within  the  stipulated  time  and  a  continu- 
ing tender  in  the  bill  for  specific  performance,  is 
sufficient.^ 

1  Cramer  v.  Mooney,  59  N.  J.  Eq.  164,  44  Atl.  625. 

2  Bogle  V.  Jarvis,  58  Kan.  76,  48  P.  558. 

3  Blanchard  v.  Jackson,  55  Kan.  239,  37  P.  986. 

Specific  performance  of  an  oral  option  to  fix  division  line  when  partly 
performed  and  parties  are  in  possession,  allowed,  Calanchini  v.  Bran- 
stetter,  84  Cal.  249,  24  P.  149. 

Irreparable  injury,  O'Connor  v.  Harrison,   132  Bl.  App.   264. 
1  Black  V.  Maddox,  104  Ga.  157,  30  S.  E.  723;  see  See.  1233. 


479  PAYMENT  OR  TENDER — EFFECT  OF  §  943 

And  in  such  case  it  is  not  necessary,  as  a  gen- 
eral rule,  that  the  money  should  be  paid  into  court,^ 
but  there  may  be  special  circumstances  which  will 
induce  the  court  to  order  the  money  paid  in.' 

Sec.  943.  EFFECT  OF  PAYMENT  OR  TEN- 
DER.— In  an  ordinary  bilateral  contract  for  the 
payment  of  money,  payment  in  accordance  with 
the  terms  of  the  contract  is  a  discharge  of  the 
debtor  from  the  contract,  since  it  constitutes  a 
full  and  complete  performance  on  the  part  of  the 
debtor.  A  tender  of  money  under  such  contract 
and  refusal  of  the  creditor  to  receive  it,  do  not, 
however,  work  a  discharge  of  the  contract  since  the 
tender  and  refusal  constitute  an  incompleted  per- 
formance, in  that  the  creditor  is  still  entitled  to  the 
amount  tendered.  The  effect  of  the  tender,  how- 
ever, is  to  place  the  creditor  in  default  and  to  pre- 
vent him  from  recovering  more  than  the  amount 
tendered,  if  the  tender  is  well  made. 

There  is  another  general  rule  that  a  tender  or 
offer  by  a  promisor  to  do  some  act  other  than  the 
pajTnent  of  money,  and  a  refusal  by  the  promisee, 
to  accept  the  performance,  is  a  discharge  of  the 
promisor  from  the  contract,  in  the  sense  that  he 
has  fully  performed.  These  general  rules  apply  to 
option  contracts.  The  last  is  applicable  to  a  case 
where  payment  of  the  price  is  the  act  of  election 
or  is  to  be  made  concurrently  with  the  election  and 
as  a  part  thereof.  In  such  case  tender  or  payment 

2  Kerr  v.  Hammond,  97  Ga.  567,  25  S.  E.  337;  Tyler  v.  Onzts,  93  Ky.  331, 

20  S.  W.  256. 

3  Cheney  v.  Wagner,   33   Neb.  310,  50   N.  W.   13;   Binns  v.  Mount,  28 

N.   J.   Eq.   24. 


§  943  LAW    OP    OPTION    CONTRACTS  480 

is  a  full  and  complete  performance  on  the  part  of 
the  optionee  and  raises  the  option  to  a  binding 
promise  on  the  part  of  the  optionor  to  convey, 
whether  or  not  the  optionor  refuses  to  accept  per- 
formance. 

The  other  rules  apply  to  tender  or  payment  of 
the  price  under  a  contract  already  raised  by  the 
election. 


CHAPTER  X 

CONVEYANCE  OF  TITLE. 

Sec.  1001.     Generally. 

Sec.  1002.     Tender  of  deed.   Whether  duty  on  optionor  or  optionee. 

Sec.  1003.     Time   of   conveyance.    Payment  of   price  and  execution   of 

deed  as  mutual  and  dependent  covenants. 
Sec.  1004.     Form  and  sufficiency  of  deed. 
Sec.  1005.     Title  and  sufficiency. 
Sec.  1006.     Encumbrances. 

Sec.  1007.     Approval  of  title  by  optionee  or  by  hia  attorney. 
See.  1008.    Abstracts,  certificates  and  surveys. 

(481) 


81 — Option  Contracts. 


§§1001,1002  LAW   OF    OPTION    CONTRACTS  482 

Section  1001.  GENERALLY.— By  a  timely  and 
sufficient  election  and  notice  there  arises,  as  we 
have  seen,  an  agreement  binding  the  optionor  to 
convey  the  optioned  property  and  also  binding  the 
optionee  to  pay  the  purchase  money,  at  the  suit  of 
the  optionor,  if  the  election  is  in  form  to  meet 
the  requirements  of  the  Statute  of  Frauds.^  If 
the  optionor,  now  vendor,  upon  receiving  the  pur- 
chase money,  performs  the  agreement  on  his  part 
and  executes  his  deed  of  conveyance  in  accordance 
with  the  terms  of  the  agreement  thus  raised,  the 
agreement  is  discharged.  The  decisions  bear  wit- 
ness, however,  that  disputes  arise  with  respect  to 
the  form  and  sufficiency  of  the  deed  of  convey- 
ance, the  title  of  the  vendor  as  being  marketable 
and  free,  and  other  like  questions  which  are  pre- 
sented in  the  following  sections  of  this  chapter. 

Sec.  1002.  TENDER  OP  DEED.  WHETHER 
DUTY  ON  OPTIONOR  OR  OPTIONEE.— The 
rule  with  reference  to  the  preparation  and  tender 
of  the  deed  of  conveyance  varies  in  the  several 
states.  In  England  the  prevailing  rule  is  that  it  is 
the  duty  of  the  purchaser  to  prepare  and  tender 
the  deed,  to  the  vendor,  and  this  rule  has  been  fol- 
lowed in  some  of  the  states  of  the  United  States.^ 
In  most  of  the  other  states,  the  general  rule  is  that 
it  is  the  duty  of  the  vendor  to  prepare  and  tender 
his  deed.^    But  in  those  jurisdictions  where  the 

1  Green  River  C.  Min.  Co.  v.  Brown,  140  Ky.  332,  131  S.  W.  13. 

1  See  MiUer  v.  Cameron,  45  N,  J.  Eq.  95,  15  Atl.  842,  1  L.  R.  A.  554. 

2  Taylor  v.  Longworth,  14  Pet.   (U.  S.)   172,  10  L,  Ed.  405;  Willard  v. 

Tayloe,  8  Wall.  557,  19  L.  Ed.  501. 


483  CONVEYANCE TENDER  OF  DEED  §  1002 

duty  of  preparing  and  tendering  the  deed  falls  on 
the  optionee,  the  refusal  of  the  optionor  to  execute 
any  deed,  excuses  tender  of  one  by  the  optionee.^ 

The  optionor  is  not  required  to  have  his  deed 
ready  for  delivery  on  the  very  day  the  option 
expires;  he  may  wait  until  he  is  notified  by  the 
optionee  that  he  intends  to  conclude  the  purchase, 
and  he  has  a  reasonable  time  within  which  to  pre- 
pare and  deliver  his  deed/ 

The  duty  of  the  optionor  to  prepare  and  tender 
his  deed  arises  only  upon  tender  of  the  price  by 
optionee,  election  having  been  made  and  notice 
given.  The  fact  that  the  optionor  fails  to  tender 
a  deed  does  not  excuse  tender  of  the  price.  ^  Where 
the  duty  to  prepare  and  present  the  deed  is  on  the 
optionor,  the  fact  that  the  optionee  tendered  a  deed 
to  the  optionor  which  contained  a  provision  not 
authorized  by  the  option,  can  not  avail  the 
optionor,^  Where,  however,  the  optionee  takes  the 

2  The  English  rule  does  not  prevail  in  Ohio,  Taylor  v.  Longworth,  supra, 
or  in  the  following  states:  Illinois,  Eohling  v.  Thole,  256  HI.  425, 
100  N,  E,  138;  North  Carolina,  Phelps  v.  Davenport,  151  N.  C.  22, 
65  S.  E.  459;  Iowa,  Consolidated  Coal  Co.  v.  Findley,  128  Iowa  696, 
105  N.  W.  206;  Georgia,  Wellmaker  v.  Wheatley,  123  Ga.  201,  51 
S.  E.  436;  Massachusetts,  Boston  etc.  Ry.  Co.  v.  Rose,  194  Mass.  142, 
80  N.  E.  498;  Michigan,  De  Grasse  v.  Verona  Min.  Co.,  (Mich.)  152 
N.  W.  242,  on  options. 

3  Bell  V.  Wright,  31  Kan.  236,  1  P.  595;  Phelps  v.  Davenport,  151  N.  C. 

22,  65  S.  E.  459. 

4  Lumaghi  v.  Abt,  126  Mo.  App.  221,  103  S.  W.  104. 

See  where  the  option  is  to  repurchase,  Connolly  v.  Keenan,  87  N.  T.  S. 
630,  42  Misc.  Rep.  589;  Mundy's  Ex'rs  v.  Garland,  116  Va.  922,  83 
S.  E.  491. 

5  Crandall  v.  Willig,  166  HI.  233,  46  N.  E.  755,  optionor  not  required 

to  "hunt  up"  optionee;  Carpenter  v.  Thornburn,  76  Ark.  578, 
89  S.  W.  1047,  lease  and  option;  Weaver  v.  Burr,  31  W.  Va.  736, 
8  S.  E.  743,  3  L.  R.  A.  94. 

6  Consolidated  Coal  Co,  v.  Findley,  128  Iowa  696,  105  N.  W,  206. 


§  1002  LAW   OP^    OPTIOX    CONTRACTS  484: 

preparation  of  the  deed,  which  by  the  terms  of  the 
option  the  optionor  was  required  to  prepare  and 
tender,  out  of  his  hands  and  prepares  a  deed  mate- 
rially modifying  the  option,  the  optionor  was  not 
required  to  prepare  and  tender  the  deed,  and  the 
failure  of  the  optionee  to  do  so  ended  the  option.^ 

A  provision  in  an  option  to  purchase  land  speci- 
fying the  time  after  acceptance  within  which  the 
deed  should  be  delivered,  is  not  of  the  essence  of 
the  contract  unless  it  is  made  material  by  express 
stipulation,  or  by  circumstances  such  as  change  of 
conditions,  which  would  render  the  enforcement  of 
the  contract  inequitable,  and  hence  a  failure  to  ten- 
der performance  within  the  time  named  is  not  a 
defense  to  a  suit  for  specific  performance.^ 

Where,  on  the  last  day  of  the  option  time,  the 
optionor  tenders  a  deed  and  demands  the  purchase 
money,  delay  of  the  optionee  in  pajdng  the  price 
will  not  enable  the  optionor  to  rescind  where  the 
optionee  objects  to  what  he  claims  are  defects  in 
the  title.' 

Where  a  contract  for  the  sale  of  land,  for  a  cer- 
tain sum,  is  paA^able  in  installments,  and  is  silent 
as  to  time  of  delivery  of  the  deed,  it  should  be 
tendered  before  action  can  be  brought  on  a  note 
given  for  one  of  the  installments.^*^ 

Where  the  grantee  of  land  was  given  the  option 
to  resell  to  the  grantor,  the  duty  is  on  the  grantee 

7  Hardy  v.  Ward,  150  N.  C.  385,  64  S.  E.  171. 

8  Boston  etc.  R.  Co.  v.  Rose,  194  Mass.  142,  80  N.  E.  498  j  see  Penn  Min. 

Co.  V.  Smith,  207  Pa.  210,  56  Atl.  426. 

9  Penn  Min.  Co.  v.  Smith,  210  Pa.  49,  59  Atl.  316. 
10  Menzel  v.  Primm,  6  Cal.  App.  204,  91  P.  754. 


485  CONVEYANCE — TIME    OP  §  1003 

to  prepare  and  tender  deed  of  reconveyance,  and  it 
is  not  sufficient  merely  to  write  that  he  wished  to 
exercise  his  option,  without  tendering  a  deed,  and 
a  tender  of  the  deed  after  expiration  of  the  option 
time  is  too  late/^ 

A  provision  in  an  option  agreement  that  the 
optionor  will,  on  demand  of  the  optionee,  execute 
his  deed,  does  not  render  the  option  inequitable  on 
the  ground  that  it  enables  the  optionee  to  postpone 
indefinitely  his  demand  and  thus  delay  perform- 
ance. In  such  case  the  demand  must  be  made  within 
a  reasonable  time/^ 

Sec.  1003.  TIME  OP  CONVEYANCE.  PAY- 
MENT OF  PRICE  AND  EXECUTION  OF 
DEED  AS  MUTUAL  AND  DEPENDENT  COV- 
ENANTS.— The  time  after  election  specified  in 
an  option  for  delivery  of  the  deed,  is  not  of  the 
essence  of  the  contract  unless  made  so  by  express 
stipulation,  or  by  circumstances  indicating  that  it 
was  deemed  essential  by  the  parties,  or  there  is  a 
change  of  conditions,  after  the  time  fixed  for  the 
performance  which  renders  the  enforcement  of  the 
contract  inequitable.^ 

If,  by  the  terms  of  the  option  contract,  no  time 
is  expressly  fixed  for  the  execution  and  delivery 
of  the  deed  of  conveyance,  it  must  be  executed  and 

11  Curtis  V.  Sexton,  142  Mo.  App.  179,  125  S.  W.  806,  also  holding  that 

the  place  of  tender  was  at  residence  of  optionor  which  was  the  place 
where  the  land  was  situated  and  where  the  contract  was  to  be  per- 
formed. 

12  Smith  V.  Bangham,  156  Cal.  359,  104  P.  689,  28  L.  R.  A.  (N.  S.)  522. 
1  Boston  &  W.  St.  Ry.  Co.  v.  Rose,  194  Mass.  142,  80  N.  E.  498. 


§  1003  LAW  OF  OPTION  CONTRACTS  486 

delivered  within  a  reasonable  time.^  And  where, 
by  the  terms  of  the  option,  express  or  implied,  the 
execution  of  the  deed  and  payment  of  the  price  are 
concurrent  acts,  then  upon  payment  or  tender  of 
the  price,  it  becomes  the  duty  of  the  optionor  to 
execute  his  conveyance,  or  where  the  price  is  pay- 
able in  installments,  to  execute  his  conveyance  upon 
payment  or  tender  of  the  last  installment.^ 

It  may  be  stated  as  a  general  rule  that  if  the 
option  agreement  does  not  otherwise  provide,  the 
obligation  of  the  optionee  to  make  payment  of  the 
price  and  the  obligation  of  the  optionor  to  make 
title,  are  mutual  and  dependent  covenants,  and  that 
neither  party  is  in  default  until  put  in  default  by 
offer  of  performance  by  the  other/ 

Thus,  where  the  owner  of  coal  lands  agreed  to 
sell  the  same  for  a  certain  siun  per  acre,  payable 
one-third  on  delivery  of  deed,  within  three  months 

2Houghwout  V.  Boisaubin,   18   N.  J.   Eq.  315;   Eeynolds  v.  O'Neil,   26 
N.   J.   Eq.   223. 

3  Woodruff  V.  Semi-Tropic  Land  etc.  Co.,  87  Cal.  275,  25  P.  354;  Beddow 

V.  Flage,  22  N.  D.  53,  132  N.  W.  637;  Clark  v.  Gordon,  35  W.  Va. 
735,  14  S.  E.  255;  see  decisions  Note  5,  this  section. 

4  Watson  V.  Coast,  35  W.  Va.  463,  14  S.  E.  249;   Clark  v.  Gordon,  35 

W.  Va.  735,  14  S.  E.  255;  Stein  v.  Leeman,  161  Cal.  502,  119  P.  663, 
affirming  90  P.  536;  Joyce  v.  Tomasini,  168  Cal.  234,  142  P.  67; 
Gantt  V.  Mechin,  30  Mo.  App.  532,  claim  against  estate  of  lessee; 
Kessler  v.  Pruitt,  infra.;  Barnes  v.  Eea,  219  Pa.  St.  279,  68  Atl. 
836;  Stevens  v.  Kittredge,  44  Wash.  347,  87  P.  484. 

Brown  v.  Slee,  103  U.  S.  828,  26  L.  Ed.  618,  holding  that  the  failure  of 
both  parties  to  perform  on  the  day  fixed  is  equivalent  to  a  waiver 
by  each  of  the  default  of  the  other.  Thereafter  either  could  require 
the  other  to  perform  within  a  reasonable  time,  first  curing  his  ovra 
default.  See  Hough wout  v.  Boisaubin,  18  N.  J.  Eq.  315,  holding 
either  party  has  a  reasonable  time;  also  Lumaghi  v.  Abt,  126 
Mo.  App.  221,  103  S.  W.  104. 

As  to  rule  of  construction,  see  Fullenwider  v.  Eowan,  136  Ala.  287, 
34  So.  975. 


487  CONVEYANCE — FORM  AND  SUFPICIENCT  §  1004 

from  date,  and  the  balance  in  subsequent  payments, 
the  agreement  providing  that  if  the  payment  was 
not  made  as  stipulated  it  should  be  void,  etc.,  the 
owner  can  not  claim  a  forfeiture  for  failure  to 
make  first  payment  where  he  failed  to  tender  a  deed 
within  the  time  fixed. ^ 

It  must  be  kept  in  mind  that  to  entitle  the 
optionee  to  invoke  the  rule,  it  is  essential  that  he 
exercise  his  right  of  election  and  give  notice,  and 
that  it  is,  therefore,  only  in  those  cases  where  pay- 
ment of  the  price  is  not  part  of  the  act  of  election 
that  the  rule  applies.® 

Sec.  1004.  FORM  AND  SUFFICIENCY  OF 
DEED. — The  optionee  is  entitled  to  a  deed  of  con- 
veyance, describing  the  land  in  the  words  of  the 
agreement  without  any  limitations  other  than  those 
therein  agreed  on.^  Where  the  optionor  is  a  mar- 

6  McHenry  v.  Mitchell,  219  Pa.  297,  68  Atl.  729 ;  see  Phelps  v.  Daven- 
port, 151  N.  C.  22,  65  S.  E.  459;  Knerr  v.  Bradley,  105  Pa.  St.  190; 
Barnes  v.  Eea,  219  Pa.  279,  68  Atl.  836;  Kibler  v.  Caplis,  140  Mich. 
28,  103  N.  W.  531,  112  A.  S.  E.  388;  Kessler  v.  Pruitt,  14  Idaho 
175,  93  P.  965,  abstract;  Sizer  v.  Clark,  116  Wis.  534,  93  N.  W.  539; 
Barrett  v.  McAllister,  33  W.  Va.  738,  11  S.  E.  220,  overruling  Weaver 
V.  Burr,  31  W.  Va.  736,  8  S.  E.  743,  3  L.  E.  A.  94;  Byers  v,  Denver 
C.  E.  Co.,  13  Colo.  552,  22  P.  951;  Breen  v.  Mayne,  141  Iowa  399, 
118  N.  W.  441;  Flynn  v.  White  Breast  Coal  Co.,  72  Iowa  738,  32 
N.  W.  471. 

6  Hardy  v.  Ward,  150  N.  C,  385,  64  S.  E.  171;  Bowen  v.  McCarthy, 
85  Mich.  26,  48  N.  W.  155. 
See,  however,  Guilford  v.  Mason,  22  E.  I.  422,  48  Atl.  386,  where  in 
an  action  to  recover  damages  against  optionor  for  fraud,  it  is  said 
that  tender  of  payment  which  was  the  act  of  election  was  excused 
where  the  optionor  evaded. 
Eule  in  action  at  law  to  recover  back  money  invested  under  option  to 
sell  interest  of  optionee  to  other  parties  in  venture,  Delaware  Trust 
Co.  V.  Calm,  195  N.  Y.  231,  88  N.  E.  53. 

1  Waters  t.  Bew,  52  N.  .J.  Eq.  787,  29  Atl.  590. 


§  1004  LAW    OP   OPTION    CONTRACTS  488 

ried  woman,  tender  of  a  deed  by  the  optionee  for 
execution  wherein  both  husband  and  wife  are  made 
grantors,  does  not  imply  a  demand  for  a  deed  from 
the  husband  in  the  sense  that  demand  is  made  a 
condition  to  the  acceptance  of  the  same  by  the 
optionee.^ 

Where  the  option  provides  for  a  warranty  deed 
free  of  all  encumbrances,  there  being  no  sugges- 
tion that  the  construction  of  a  cement  tank  and 
the  maintenance  of  it  and  of  pipes  were  to  be 
secured  by  making  them  conditions  subsequent  in 
the  deed  though  the  optionee  agreed  to  perform 
those  acts,  the  right  of  the  optionor  will  be  prop- 
erly secured  by  inserting  agreements  in  the  deed 
binding  on  the  grantee  and  its  successors  and 
assigns  instead  of  by  conditions  the  breach  of 
which  would  work  a  forfeiture.' 

Where,  by  the  terms  of  the  option,  tender  of  deed 
and  payment  of  price  are  concurrent  acts,  the  fact 
that  the  optionee  tendered  a  deed  containing  provi- 
sions not  authorized  by  the  option  can  not  avail 
the  optionor  who  was  required  to  present  the  deed 
himself.*  Objections  to  the  form  of  deed  prepared 
by  the  optionee  are  immaterial  when  the  optionor 
absolutely  refuses  to  accept  the  purchase  money  or 
to  execute  any  deed,  even  assiuning  that  the  duty 

2  Gradle  v.  Warner,   140   Dl.  123,  29  N.  E.  1118. 

8  Boston  etc.  R.  Co.  v.  Rose,  194  Mass.  142,  80  N.  E.  498. 

A  contract  calling  for  a  deed  with  full  covenants  of  warranty  is  com- 
plied with  if  such  warranty  appears  in  the  chain  of  title  and  runs 
with  the  land,  beginning  with  the  grantor,  Big  Ben  L.  Co.  v. 
Hutchings,  71  Wash.  345,  128  P.  652. 

4  Consolidated  Coal  Co.  v.  Findley,  128  Iowa  696,  105  N.  W.  206. 


489  CONVEYANCE — TITLE   AND  SUFFICIENCY  §  1005 

of  preparing  and  tendering  the  deed  was  on  the 
optionee.^  Failure  of  the  optionor  to  object  to  a 
deed  tendered  by  the  optionee  because  it  contained 
too  much  land  is  waived  if  not  objected  to  on  that 
ground  at  the  time.® 

Sec.  1005.  TITLE  AND  SUFFICIENCY.— 
Where  the  option  does  not  specify  what  estate  shall 
be  granted  it  calls  for  an  estate  in  fee  simple/ 
unless  it  appears  that  the  parties  intended  to  con- 
tract on  the  basis  of  a  lesser  estate. ^ 

The  optionee  can  not  require  the  optionor  to 
''clear  up"  her  title,^  but  the  optionee  has  the  right 
to  demand  evidence  of  title  as  a  condition  precedent 
to  further  performance  on  his  part.* 

The  general  rule  is,  however,  that  specific  per- 
formance will  not  be  decreed  against  an  optionor 
who  is  not  able,  for  want  of  title,  to  comply  with 
the  option  contract. '^ 

5  Chadsey  v,  Condley,  62  Kan.  853,  62  P.  663. 

6  Schroeder  v,  Gemeinder,  10  Nev.  355. 

I  MeCormiek  v.  Stephany,  61  N.  J.  Eq.  208,  48  Atl.  25;  Florida  Taeht 
Club  V.  Renfroe,  67  Fla.  154,  64  So.  742;  Taylor  v.  Newton,  152  Ala. 
459,  44  So.  583. 

"Satisfactory"   title,   what  is,  Dillinger  v.   Ogden,   244  Pa.   20,   90 
Atl.  446,  Ann.  Cas.  1915C,  533. 

ZLounsbery  v.  Locander,  25  N.  J.  Eq.  554;  Brink  v.  Mitchell,  135  Wis. 
416,  116  N.  W.  16. 

3  Friendly  v.  Elwert,  57  Ore.  599,  105  P.  404,  112  P.  1085,  Ann.  Cas. 

1913A,  357. 

4  Taylor  v.  Newton,  152  Ala.  459,  44  So.  583;   Welchman  v.  Spinks, 

5  L.  T.  Rep.   (N.  S.)   385. 

6  Smith  V.  Bangham,  156  Cal.  359,  104  P.  689,  28  L.  R.  A.  (N.  S.)  522. 


§  1005  LAW  OF  OPTION  CONTRACTS  490 

Where  the  title  is  to  be  free  from  incumbrances, 
the  optionee  can  insist  upon  a  deed  free  of  restric- 
tive covenants.® 

The  optionee  is  entitled  to  a  good  title  and  the 
fact  that  he  declined  a  deed  and  to  pay  the  price 
on  a  ground  plausible  enough  to  cause  a  prudent 
man  to  hesitate,  does  not  defeat  his  right  to  spe- 
cific performance,  although  it  turns  out  there  is  no 
defect/ 

If  the  title  of  the  optionor  fails,  the  optionee  may 
rescind  and  recover  the  purchase  money  paid, 
whether  or  not  the  optionor  knew  he  had  title,  and 
the  option  is  not  invalid  because  the  optionor  had 
no  title  at  the  time  of  the  execution  of  the  option,* 
but  if  the  optionor  has  not  the  title  at  the  time  of 
the  execution  of  the  option  and  failed  to  obtain  it 
within  the  option  time,  he  is  not  entitled  to  spe- 
cific performance.® 

The  optionee  may  not  raise  the  question  of  suffi- 
ciency of  title  when  he  has  not  elected  so  as  to 
convert  the  option  into  an  agreement  of  sale  and 
purchase,  although  he  knew,  when  the  option  was 
executed,  that  the  optionor  had  only  a  *'bond*'  for 
a  deed.^® 

6  Krah  v.  Eadcliffe,  78  N.  J.  Eq.  305,  81  Atl.  1133,  affirming  Krah  v. 

Wassmer,  75  N.  J.  Eq.  109,  71  Atl.  404. 
But  not  where  the  option  restricts  the  use  of  the  property  for  20  years, 
and  the  optionor  is  entitled  to  have  such  restriction  inserted  in  the 
deed,  American  Strawboard  Co.  v.  Haldeman  Paper  Co.,  83  Fed.  619, 
27  C.  C.  A.  634. 

7  Watson  V.  Coast,  35  W.  Va.  463,  14  S.  E.  249. 

8  Burks  V.  Davies,  85  Cal.  110,  24  P.  613,  20  A.  S.  R.  213. 

9  North  Ave.  L.  Co.  v.  City  of  Baltimore,  102  Md.  475,  63  Atl.  llo. 

10  Kuigsley  v.  Kressly,  60  Ore.  167,  118  P.  678,  Ann.  Cas,  1913E,  746; 
see  Winter  v.  Bostwick,  172  Fed.  285. 


491  CONVEYANCE ENCUMBRANCES  §  1006 

The  fact  that  one  of  the  deeds  under  which  the 
optionor  derives  his  title  contains  a  misdescription 
of  the  property  resulting  from  a  mistake  on  the 
part  of  a  draughtsman,  affords  no  ground  for  a 
reasonable  objection. ^^  The  optionor  is  permitted 
to  make  good  title  if  possible  within  a  reasonable 
time/^ 

Sec.  1006.  ENCUMBRANCES.— A  lease  is  not 
an  encumbrance  upon  the  premises  under  an  option 
to  purchase  the  same  land  contained  in  the  lease.  ^ 

Where  an  optionee  exercises  his  right  of  pur- 
chase and  gives  notice  within  the  stipulated  time, 
the  optionor  can  not,  at  the  expiration  of  the  option 
time,  by  tendering  deed  and  demanding  payment 
declare  the  contract  null  and  void  if  payment  is 
not  then  made,  because  the  optionor  can  not  then 
change  the  contract  by  making  time  of  its  essence, 
it  appearing  that  at  the  time  of  the  tendering  of 
the  deed  there  was  a  lien  on  the  property.^ 

And  where  the  premises  are  covered  by  a  prior 
mortgage  as  to  which  no  provision  is  made  in  the 

11  Brown  v.  Eeichling,  86  Kan.  640,  121  P.  1127. 

12  Burks  V.  Davies,  85  Cal.  110,  24  P.  613,  20  A.  S.  R.  213. 

When  improvements  burn,  Clark  v.  Burr,  85  Wis.  649,  55  N.  W.  401. 
May  not  have  conveyance  of  part  of  the  premises,  Hitchcock  v.  Page, 

14  Cal    440. 
Facts  not  amounting  to  warranty,  Worthington  v.  Herrmann,  180  N.  Y. 

559,  73  N.  E.  1134,  affirming  88  N.  Y.  S.  76,  89  App.  Div.  627. 
Fixing  boundaries  of  reserved  tract  before  optionee  becomes  entitled 

to  a  deed,  is  in  time,  Eouse  v.  Riverton  Coal  &  Dev.  Co.,  154  Ore.  71, 

142   P.  343. 

1  Swanston  v,  Clark,  153  Cal.  300,  95  P.  1117;   see  Millard  v.  Martin, 

28  E.  I.  494,  68  Atl.  420. 

2  Penn  Min.  Co.  v.  Smith,  207  Pa.  210,  56  Atl.  426. 


§  1007  LAW  OF  OPTION  CONTRACTS  492 

option,  the  optionee,  at  his  election,  has  the  right 
either  to  insist  on  a  good  title  and  refuse  to  exer- 
cise the  option,  if  it  is  not  offered,  or  to  accept 
such  title  as  the  vendor  has  and  demand  an  adjust- 
ment of  the  payment  of  the  purchase  price  in  such 
manner  as  may  be  just  to  protect  him,  as  far  as 
may  be,  against  loss  from  defects  in  the  title. ^ 

Where,  after  the  execution  of  an  option  con- 
tained in  a  lease,  the  city  in  which  the  property  is 
situated,  paved  a  side  street  in  front  of  the 
optioned  premises  (not  anticipated  by  the  j^arties) 
the  court,  in  specific  performance,  is  warranted  in 
requiring  the  optionee  to  reimburse  the  optionor 
for  the  amount  already  paid  for  paving  and  to 
assume  the  balance  as  a  condition  of  granting  spe- 
cific performance.* 

Where  time  of  performance  is  not  specified  by 
the  option  and  the  parties  arrange  for  the  removal 
of  an  encumbrance,  prior  to  performance,  without 
naming  a  specific  day,  the  removal  within  a  rea- 
sonable time  is  sufficient  perf ormance.*^ 

Sec.  1007.  APPROVAL  OF  TITLE  BY 
OPTIONEE  OR  BY  HIS  ATTORNEY.— Where, 

by  the  terms  of  the  option,  the  title  is  to  be 
satisfactory  to  the  attorney  of  the  optionee,  the 
decision  of  the  attorney,  in  the  absence  of  bad  faith 

3  Smiddy  v.  Grafton,  163  Cal.  16,  124  P.  433,  Ann.  Gas.  1913E,  921. 

Case  where  optionor  was  permitted  to  mortgage,  Bennett  v.  Giles,  220 

ni.  393,  77  N.  E.  214. 
May  have  an  abatement  of  the  price  even  if  he  knew  of  the  defect 

when  he  began  suit,  White  v.  Weaver,  68  N.  J.  Eq.  644,  61  Atl.  25. 

4  King  V.  Raab,  123  Iowa  632,  99  N.  W.  306. 

5  Cramer  v.  Mooney,  59  N.  J.  Eq.  164,  44  Atl.  625. 


493  CONVEYANCE — ABSTRACTS,  ETC.  §  1008 

on  his  part,  is  conclusive  on  that  question  though 
the  title  in  fact  is  good,^  and  such  stipulation  is 
not  void  as  unreasonable  in  providing  that  if  the 
optionee  should  decline  to  take  title  the  moneys 
paid  on  the  price  should  be  refunded  to  the 
optionee.^ 

A  provision  in  an  option  giving  the  optionee  the 
right  to  pass  on  or  reject  the  title  and  making  him 
the  exclusive  judge  of  the  sufficiency  of  the  title, 
if  acted  on  in  good  faith,  passes  by  assignment  of 
the  option.  In  this  case,  however,  the  optionor 
after  demand,  delivered  certificate  of  title  to  the 
assignee  of  the  optionee.^ 

When  investigation  of  title  is  made  within  the 
stipulated  time  and  is  found  regular,  the  failure  of 
the  optionee,  at  the  end  of  the  time,  to  pay  the 
purchase  money,  will  bar  specific  performance,  the 
title  being  regular  and  time  being  of  the  essence.* 

Sec.  1008.  ABSTRACTS,  CERTIFICATES 
AND  SURVEYS.— The  duty  of  the  optionor  to 
furnish  an  abstract  or  certificate  of  title  is  one 
arising  solely  from  the  terms  of  the  option  con- 
tract except  perhaps  in  those  localities  or  jurisdic- 
tions where  there  is  a  general  custom  imposing  this 
duty  upon  the  optionor.^ 

1  Friendly  v.  Elwert,  57  Ore.  599,  105  P.  404,  112  P.  1085,  Ann.  Gas. 
1913A,  357. 

2DeLano  v.  Saylor,   (Ky.)   113  S.  W.  888. 

3  Simmons  v.  Zimmerman,  144  Cal.  256,  79  P.  451,  1  Ann.  Cas.  850. 

4  Hollmann  v.  Conlon,  143  Mo.  869,  45  S.  W.  275. 

1  See  Doran  v.  Bunker  Hill  Oil  Min.  Co.,  23  Cal.  App.  644,  139  P.  93 ; 
Knox  V.  McMurray,  159  Iowa  171,  140  N.  W.  652;  Con.  Coal  Co.  v. 
Findley,  128  Iowa  696,  105  N.  W.  206;  Thompson  v.  Eobinson,  65 
W.  Va.  506,  64  S.  E.  718,  17  Ann.  Cas.  1109. 


§  1008  LAW    OP    OPTION    CONTRACTS  49'1 

Stipulations  in  an  option  binding  the  optionor 
to  furnish  optionee  an  abstract  of  title  to  the  prem- 
ises showing  good  and  clear  title,  and  binding  the 
optionee  to  pay  the  balance  of  the  pv.rchase  money, 
are  mutual,  dependent  and  concurrent  covenants, 
and  neither  party  can  be  put  in  default  without 
tender  of  performance  by  the  other. ^ 

The  rule,  it  must  be  remembered,  applies  to  the 
performance  of  the  contract  and  not  to  an  election 
to  purchase  under  the  option.  An  election  is  neces- 
sary to  raise  the  option  to  an  agreement  of  pur- 
chase and  sale,  and,  therefore,  the  failure  of  the 
optionor  to  tender  an  abstract  does  not  excuse  ten- 
der of  the  price  where  the  price  by  the  terms  of 
the  option  is  a  part  of  the  act  of  election.^ 

But  where  the  election  was  made  in  time  and 
only  part  of  the  first  installment  of  the  price, 
required  by  the  option  to  be  paid  within  thirty 
days,  was  paid,  and  was  retained  by  the  optionor 
as  a  part  of  the  pajTuent  and  who  thereafter  fur- 
nished an  abstract  to  the  optionee  for  examina- 
tion, and  by  the  terms  of  the  option  the  latter  had 
ten  days  thereafter  within  which  to  examine  it,  it 
was  held  the  optionor  waived  the  full  payment  of 
the  first  installment.'*  So,  when  the  optionee  elects 
in  time,  his  failure  to  tender  or  pay  the  price  within 
the  time,  will  not  lose  him  the  benefit  of  the  option 
if  the  optionor  was  not  able  to  deliver  a  deed 

2  Kessler  v.  Pruitt,  14  Idaho  175,  93  P.  965. 

Hessell  v.  Neal,  25  Colo.  App.  300,  137  P.  72,  the  case  seems  to  turn 
on  the  point  that  the  optionee  was  not  able  to  make  the  deferred 
payment. 

3  Pollock  V.  Brookover,  60  W.  Va.  75,  53  S.  E.  795,  6  L.  R.  A.  (N.  S.)  403. 

4  Moore  v.  Beiseker,  147  Fed.  367,  77  C.  C.  A.  545, 


495  CONVEYANCE — ABSTRACTS,   ETC.  §  1008 

because  of  the  absence  of  two  persons  whose  signa- 
tures were  necessary  to  the  execution  of  the  deed, 
and  where,  also,  a  survey  of  the  land  was  necessary 
to  determine  the  acreage/ 

Delay  by  the  optionor  in  furnishing  an  abstract 
within  the  stipulated  time,  does  not  excuse  the 
optionee  for  a  delay  in  failing  to  make  paj^nent  of 
the  price  within  the  time  stipulated,  where  it 
appears  that  the  abstract  was  delivered  to  the 
optionee,  and  that  he  approved  the  same  before  the 
expiration  of  the  time  limit  for  the  payment,  and 
it  also  appearing  that  he  had  time  after  the 
approval  and  before  the  expiration  of  the  time 
limit  to  make  the  payment.® 

B  Barrett  ▼.  McAllister,  33  W.  Va.  738,  11  S.  E.  220,  overruling  Weaver 

V.  Burr,  31  W.  Va.  736,  8  S.  E.  743,  3  L.  R.  A.  94. 
6  Kentucky  etc.  Co.  v.  Warwick  Co.,  109  Fed.  280,  48  C.  C.  A.  363. 
Con.  Coal  Co.  v.  Findley,  128  Iowa  696,  105  N.  W.  206,  on  difficult  facta 

holds  otherwise. 
Surveys:    Duty  to  make  on  optionor  as  much  as  on  optionee,  Bell  v. 

Wright,  31  Kan.  236,   1  P.  595,  601. 
Where  amount  agreed  on,  tender  not  excused  for  lack  of  survey.  Smith 

V.  MiUer,  54  Ind.  App.  37,  101  N.  E.  316. 
Extension  of  time  to  make  survey  and  finish  contract,  Fulton  v.  Mes- 
senger, 61  W.  Va.  477,  56  S.  E.  830. 
As  to  waiver  by  optionee,  see  Lechner  v.  Strauss,  50  Ind.  App.  414, 

98  N.  E.  444. 
Where  the  price  is  fixed  at  a  certain  sum  per  acre  and  the  property  is 
described  by  metes  and  bounds  as  containing  410  acres  "more  or 
less,"  the  price  must  be  fixed  by  the  contract  and  not  by  the  paper 
acrige,  Warden  v.  Telsa,  87  N.  Y.  S.  853,  93  App.  Div.  520. 
Statute  of  Umitation  does  not  begin  to  run  till  survey,  Calanchini  v. 

Branstetter,  84  Cal.  249,  24  P.  149. 
No  title  passes  tiU  survey,  Little  v.  Cardwell,  (Ky.)  122  S.  W.  799. 


CHAPTER  XL 

EEMEDIES. 

Sec.  1101.     Remedies  of  optionor.    Generally. 

Sec.  1102.     Remedies  of  optionee.    Generally. 

See.  1103.     Breach  of  contract.    Failure  to  elect  is  not  breach. 

Sec.  1104.     Right  of  optionee  to  recover  damages  without  electing  where 

optionor  breaches  during  time  limit. 
Sec.  1105.     Option  cases  involving  sale  and  return. 

Sec.  1106.     Option  cases  involving  expired  options  and  unaccepted  offers. 
Sec.  1107.     Cases  involving  options  to  sell. 

Sec.  1108.     Option  cases  involving  application  of  payments  as  rent. 
Sec.  1109.     Option  cases  involving  title. 
Sec.  1110.     Option  cases  involving  fraud. 
Sec.  1111.     Option  cases  involving  liquidated  damage  clauses. 
Sec.  1112.     Option  cases  involving  forfeiture  clauses. 
Sec.  1113.     Option  cases  involving  "null  and  void"   clauses. 
See.  1114.     Option  cases  involving  liability  of   telegraph   company   for 

negligent  transmission  of  telegrams. 
Sec.  1115.     Miscellaneous  cases  involving  actions  under  options. 
Sec.  1116.     Action  by  vendor  for  price  under  bilateral  contract.    Real 

property. 
Sec.  1117.     Action  by  vendor  for  damages  under  bilateral  contract.  Rule 

of  damages. 
Sec.  1118.     Action  by  purchaser  for  damages  under  bilateral  contract. 

Rule  of  damages. 
Sec.  1119.     Action  for  breach  of  bilateral  contract.    Personal  property. 

Rules  of  damages. 
Sec.  1120.     Pleading. 
Sec.  1121.     Practice. 
Sec.  1122.     Evidence. 
Sec.  1123.     Ejectment. 

Sec.  1124.     Suit  to  quiet  title  (remove  cloud). 
Sec.  1125.     Detainer. 
Sec.  1126.     Injunction. 

(497) 

32 — Option  Contracts. 


§  1101  LAW   OP    OPTION    CONTRACTS  498 

Section  1101.  REMEDIES  OF  OPTIONOR. 
GENERALLY. — The  optionee  has  the  contract 
and  the  legal  right  to  permit  the  option  privilege 
to  lapse.  If  he  does  so  the  option  contract  is  at  an 
end,  that  is,  fully  and  complete! 3^  discharged.^  The 
same  result  attends  the  surrender  or  abandonment 
of  the  option,  by  the  optionee,  as  does  also  the  death 
of  the  optionee,  prior  to  election,  where  the  privi- 
lege is  personal  to  him. 

If  the  option  privilege  is  properly  and  timely 
exercised  and  the  optionee  then  fails  or  refuses  to 
proceed  further  with  the  purchase,  whether  the 
optionor  has  any  remedy  for  the  enforcement  of 
the  contract  against  the  optionee,  depends  upon  the 
facts  and  the  law  of  the  particular  jurisdiction 
applicable  thereto.  If  the  contract  is  not  within  the 
Statute  of  Frauds,  or  if  it  is  within  the  statute  and 
the  election  is  in  writing  and  subscribed  by  the 
optionee  so  as  to  meet  its  requirements,^  or,  if  the 
optionee  has  otherwise  bound  himself  to  perform, 
the  effect  is  to  raise  a  bilateral  contract  which  is 
enforceable  by  the  optionor  against  the  optionee, 
either  to  recover  damages  for  breach  of  the  con- 
tract, to  strict-f  oreclose  the  contract,  or,  in  certain 

1  John  V.  Elkins,  63  W.  Va.  158,  59  S.  E.  961;  Stewart  v.  Gardner,  152 

Ky.  120,  153  S.  W.  3,  optionee's  rights  are  at  an  end;  Montgomery 
V.  Waldeck,  2  Alaska  581. 
Low  V,  Young,  158  Iowa  15,  138  N.  W.  828,  and  of  course  the  optionor 
may  not  recover  damages  for  not  electing;  Booth  v.  Miliken,  111 
N.  Y.  S.  791,  127  App.  Div.  522 ;  also  Gordon  v.  Swan,  43  Gal.  564 ; 
Quigley  v.  King,  182  Mo.  App.  196,  168  S.  W.  285;  nor  enforce  an 
agreement  between  agent  and  principal  by  which  the  latter  agrees  to 
make  the  option  payments,  Rockwell  v.  Edgeomb,  72  Wash.  694,  131 
P.  191,  nor  have  specific  performance  of  agreement  to  work  mine, 
Geiger  v.  Green,  (Md.)  4  Gill.  472;  see  Sec.  871. 

2  See  Sec.  417;  Brewer  v.  Sowers,  118  Md.  681,  86  Atl.  228,  231. 


499  REMEDIES  OF  OPTIONOR  §  HOI 

jurisdictions,  to  enforce  specific  performance  of 
the  contract  by  a  suit  which  has  for  its  object  the 
recovery  of  the  purchase  price.^  On  the  other  hand, 
if  the  election  is  oral  and,  therefore,  fails  to  meet 
the  requirements  of  the  Statute  of  Frauds  in  a  par- 
ticular jurisdiction,^  and  the  optionee  has  not  other- 
wise bound  himself  to  perform,  it  would  seem  the 
optionor  is  without  remedy  even  though  not  in 
breach  of  the  contract  himself,  the  effect  in  such 
case  being  the  same  as  if  there  had  been  no  election.^ 

It  is  not  unusual  to  find  an  option  contract  giv- 
ing possession  of  the  property  to  the  optionee  dur- 
ing its  time  limit,  and  there  are  niunerous  cases 
involving  leases  with  option  to  purchase  where  the 
lessee-optionee,  of  course,  takes  possession.  In  such 
cases,  upon  failure  timely  and  properly  to  elect,  the 
term  of  the  lease  having  expired,  the  optionor  has 
his  remedy  to  recover  possession  in  accordance  with 
the  law  and  the  practice  of  the  particular  jurisdic- 
tion, but  usually  in  form  of  ejectment,*'  or  detainer/ 
In  addition  to  these  the  optionor  has,  on  proper 
facts,  an  action  to  quiet  his  title,  or  a  suit  to  remove 

3  See  Johnston  v.  Trippe,  33  Fed.  530 ;  Obery  v.  Lander,  179  Mass.  125, 

60  N.  E.  378;  Clock  v.  Howard  &  W.  Colony  Co.,  123  Cal.  1,  55  P. 
713,  43  L.  R.  A.  199,  69  A.  S.  R.  17;  Cuthill  v.  Peabody,  19  Cal.  App. 
304,  125  P.  926;  O.  W.  Kerr  Co.  v.  Nygren,  114  Minn.  268,  130  N.  W. 
1112;  Green  River  Coal  Min.  Co.  v.  Brown,  140  Ky.  332,  131  S.  W. 
13,  specific  enforcement  against  optionee  to  work  coal  mine. 
"Upon  election  there  is  an  implied  obligation  to  take  the  property  and 
pay  the  purchase  money,"  Brewer  v.  Sowers,  118  Md.  681,  86  Atl. 
228,  231;  also  Thomas  v.  Brewing  Co.,  102  Md.  417,  62  Atl.  633. 

4  See  Sec.  417 ;  Montgomery  v.  Waldeck,  2  Alaska  581. 

5  Montgomery   v.   Waldeck,  supra;   Sivell  v.  Hogan,    119    Ga.    167,   46 

S.  E.  67. 
«  See  Sec.  1123. 
7  See  Sec.  1125. 


§  1102  LAW  OF  OPTION   CONTRACTS  500 

the  option  as  a  cloud,  ^  and  is  sometimes  entitled  to 
an  injunction.® 

■* 

Sec.  1102.  REMEDIES  OF  OPTIONEE. 
GENERALLY. — A  breach  of  the  contract  by  the 
optionor,  after  a  timely  and  proper  election,  gives 
the  optionee  an  action  to  recover  damages  for  the 
breach,  or,  in  a  proper  case,  a  suit  for  specific  per- 
formance of  the  contract,  or,  at  his  election,  a  right 
to  recover  back  the  purchase  money  paid.^ 

If  the  optionor  breaches  the  option  agreement 
before  an  election  is  due,  the  rights  and  remedies 

8  See  Sec.  1124. 

9  See  See.  1126. 

1  Glock  V.  Howard  &  W.  Colony  Co.,  123  Cal.  1,  55  P.  713,  43  L.  B.  A. 

199,  69  A.  S.  E.  17. 
An  option  to  renew  a  lease  contained  therein  is  a  valuable  right,  and 

an  action  for  damages  wiU  lie  for  refusal  of  the  landlord  to  renew, 

the  lessee  having  elected  to  renew,  McClintock  v.  Joyner,  77  Miss. 

678,  27  So.  837,  78  A.  S.  E.  541. 
As  to  right  of  optionee-lessee  to  recover  damages  for  refusal  to  convey 

under  option  in  lease  void  as  offending  the  rule  against  perpetuities, 

see  Worthing  Corporation  v.  Heather,  (1906),  2  Ch.  Div.  532. 
Contract  of  sale  giving  plaintiff  an  option  to  demand  the  delivery  of 

goods  not  exceeding  a  certain  amount,  is  enforceable  on  his  making 

the  demand,  and  damages  may  be  recovered  for  the  refusal  of  the 

defendant  to  deliver  the  goods,  Dambmann  v.  Lorentz,  70  Md.  380, 

17  Atl.  389,  14  A.  S.  E.  364. 
An  optionee  in  default  can  not  recover  payments  made,  Bruschi  v. 

Mining  Co.,   147  Cal.    120,   81   P.  404;   Champion  Gold  M.   Co.  v. 

Champion  Mines,  164  Cal.  205,  128  P.  315. 
A  mortgage  or  gift  of  the  optioned  property  by  the  optionor  does  not 

render  him  liable  where  the  optionee  has  a  "pre-emption  right  if  he 

(optionor)  ever  determines  to  sell,"  City  of  Louisville  T.  Bank  of 

TJ.  S.,  42  Ky.  (13  B.  Mon.)  138. 
Sale  by  optionor  not  a  breach  of  ' '  first  option  to  purchase, ' '  where  use 

of  premises  is  reserved  to  him  during  full  term  of  the  lease,  Blanchard 

V.  Ames,  60  N.  H.  404. 


501  REMEDIES  OF  OPTIONOR  §  1102 

of  the  optionee  are  made  to  turn  on  the  presence  or 
absence  of  a  timely  and  proper  election  by  him. 
If  the  optionor  breaches  and,  notwithstanding  the 
breach,  the  optionee  timely  and  properly  elects,  it 
is  clear  he  has  perfected  his  right  to  enforce  the 
bilateral  contract  thus  raised,  and  has,  conse- 
quently, the  remedies  and  rights  common  to  such 
contracts.  On  the  other  hand  if,  in  such  case,  he 
fails  to  elect,  it  would  seem  his  only  remedy  is  to 
recover  damages  for  breach  of  the  option  con- 
tract.^ 

The  distinction,  then,  is  the  difference  between 
the  option  contract  and  the  bilateral  contract.  The 
only  remedy  of  the  optionee  under  the  former  is 
an  action  to  recover  damages  for  breach  of  that 
contract.^  Whereas,  the  remedies  of  the  optionee 
under  an  option  contract  raised  to  a  bilateral  con- 
tract by  election  are,  either  an  action  to  recover 
damages  for  the  breach,  or  to  recover  the  purchase 
money  paid,  or  a  suit  for  specific  enforcement  of 
the  bilateral  contract.* 

Independently  of  the  presence  or  absence  of  an 
election,  either  of  the  parties  has,  in  a  proper  case, 
the  right  to  rescind  or  to  reform  the  contract.  The 
former  subject  has  been  presented  in  a  preceding 
section,^  and  a  presentation  of  the  latter  will  be 
found  in  a  following  section.* 

2  See  Sec.  1104 ;  the  offeree  can  not  recover  under  a  pure  offer  withdrawn 

before  acceptance,  Hochster  v.  Baruch,  5  Daly  (N.  Y.)  440;  nor 
when  he  abandons  the  option  and  the  property,  Darragh  v.  Vicknair, 
126  La.  171,  52  So.  264;  Bankruptcy,  see  Sec.  709,  note  4. 

3  See  Sec.  1104. 

4  See  See.  1118. 

5  See  Sec.  712. 

<l  See  Sec.  1245;  also  Gillis  v.  Arringdale,  135  N.  C.  295,  47  S.  E.  429. 


§  1103  LAW  OP  OPTION  CONTRACTS  502 

Sec.  1103.  BREACH  OF  CONTRACT.  FAIL- 
URE TO  ELECT  IS  NOT  BREACH.— The  reme- 
dies we  are  considering  are  those  arising  out  of 
breach  of  the  option  contract  as  well  as  out  of  the 
bilateral  contract  raised  by  the  election.  The  latter 
needs  no  extended  presentation  since  the  remedies 
for  the  enforcement  of  such  contracts  are  those 
applicable  to  contracts  generally.  As  to  breach  of 
the  option  contract,  however,  it  should  be  pointed 
out  that  the  failure  of  the  optionee  to  exercise  the 
option  privilege  is  not  a  breach.  Breach  of  con- 
tract occurs  where  a  party  breaks  through  the  obli- 
gation which  the  contract  imposes  upon  him.  An 
option  contract,  however,  imposes  no  obligation  on 
the  optionee  unless  and  until  there  is  an  election 
binding  him  to  performance.^  This  clearly  appears 
from  the  one-sided  nature  of  the  option  contract  in 
that  the  privilege  granted  by  the  option  to  the 
optionee  is  the  right  to  permit  the  option  to  lapse 
equally  with  the  right  on  the  part  of  the  optionee 
to  elect  to  purchase.  The  exercise  by  a  party  to  a 
contract  of  a  right  granted  him  by  it,  is  not  a 

I  Smith  V.  Bangham,  156  Cal.  359,  104  P.  689,  28  L.  R.  A.  (N.  S.)  522; 
Gordon  v.  Swan,  43  Cal.  564;  Darr  v.  Mummert,  57  Neb.  378,  77 
N.  W.  767 ;  Peaeoek  v.  Deweese,  73  Ga.  570 ;  Montgomery  v.  Waldeck, 
2  Alaska  581. 
In  Minn.  etc.  Ry.  Co.  v.  Columbia  etc.  Co.,  119  U.  S.  149,  30  L.  Ed. 
376,  7  S.  Ct.  168,  it  is  said  that  an  offer  to  sell  imposes  no  obliga- 
tion on  either  party  until  accepted  according  to  its  terms;  also 
Iluggins  V.  Safford,  67  Mo.  App.  469;  Atwood  v.  Eose,  32  Okl.  355, 
122  P.  929. 

In  consequence  of  this  rule  the  optionor  can  not  compel  the  optionee 
to  work  ore  beds,  Geiger  v.  Green,  (Md.)  4  Gill.  472,  but  is  otherwise 
when  the  covenant  to  sink  the  shaft  is  absolute  and  is  the  considera- 
tion for  the  option  to  purchase,  Davis  v.  Eames,  (Cal.)  35  P.  566. 

There  is  no  contract  of  purchase  or  obligation  to  sell  or  convey  until 
election,  Tilton  v.  Sterling  C.  &  C.  Co.,  28  Utah  173,  77  P.  758, 
107  A.  S.  E.  689. 


503  REMEDIES  OF  OPTIONEE  §  1104 

breach.^  Nor,  does  a  failure  by  tbe  optionee  to 
elect,  give  the  optionor  a  right  of  action  to  recover 
a  penalty  for  such  failure,  under  an  agreement 
held  to  be  an  option  by  which  the  optionor  agreed 
to  sell  certain  land  to  a  railroad  for  railroad  pur- 
poses, the  agreement  providing  that  if  the  con- 
struction of  a  railroad  across  the  land  was  not  com- 
menced within  a  certain  time,  it  should  be  null  and 
void,  and  further  that  if  the  road  was  not  completed 
within  a  certain  time,  the  optionee  should  pay  to 
the  optionor  a  forfeit  or  penalty  of  $200  for  every 
year  the  optionor  should  fail  to  complete  the  road. 
The  optionee  did  not  elect,  nor  was  the  construc- 
tion of  the  road  commenced  within  the  time.  The 
optionor  brought  assumpsit  to  recover  the  penalty 
alleging  the  above  facts.  A  demurrer  to  the  com- 
plaint was  sustained  and  the  action  dismissed,  and 
these  rulings,  on  appeal,  were  affirmed.^ 

Sec.  1104.  RIGHT  OF  OPTIONEE  TO 
RECOVER  DALIAGES  WITHOUT  ELECT- 
ING WHERE  OPTIONOR  BREACHES  DUR- 
ING TIME  LIMIT.— The  remedies  to  be 
considered  in  this  section  are  those  available  to  an 
optionee  upon  breach  by  the  optionor  before  the 

2  See  Rease  v.  Kittle,  56  W.  Va.  269,  49  S.  E.  150,  153;  and  the  same 

rule  applies  where  the  agreement  is  construed  to  be  an  option  by 
virtue  of  a  forfeiture  clause,  Low  v.  Young,  158  Iowa  15,  138  N.  W. 
828 ;  Runck  v.  Dimmick,  51  Tex.  Civ.  App.  214,  111  S.  W.  779. 
The  optionor  can  not  legally  insist  that  the  optionee  shall  elect,  Kelly  v. 
Chicago  M.  &  St.  P.  Ry.  Co.,  93  Iowa  436,  61  N.  W.  957 ;  Pearce  v. 
Turner,  150  111.  116,  36  N.  E.  962;  option  to  sell,  Rockwell  v.  Edg- 
comb,  72  Wash.  694,  131  P.  191. 

3  John  V.  Elkins,  63  W.  Va.  158,  59  S.  E.  961;  see,  also,  Quigley  v.  King, 

182  Mo.  App.  196,  168  S.  W.  285. 


§  1104  LAW  OF  OPTION  CONTRACTS  504 

expiration  of  the  option  time  limit,  and  in  the 
absence  of  an  election  by  the  optionee  to  purchase. 
The  nature  of  a  mere  offer  seems  logically  to  lead 
to  the  conclusion  that  the  offeree,  in  the  absence  of 
a  timely  acceptance  of  the  offer,  acquires  no  right 
which  may  be  the  foundation  of  a  cause  of  action 
against  the  offerer,  based  upon  a  withdrawal  of  the 
offer,  by  the  latter,  prior  to  acceptance;^  but  an 
option,  as  we  have  seen,  is  the  sale  of  the  right  of 
election  to  purchase.  It  is  recognized  as  a  property 
right  which,  even  prior  to  election,  may  be  the  sub- 
ject of  bargain  and  sale.^  The  optionor  expressly 
or  impliedly  stipulates  not  to  withdraw  the  offer  of 
sale  during  the  time  limit,  and,  therefore,  if  during 
the  time  limit  he  breaches  the  option  agreement  by 
repudiating  the  option,  or  by  placing  himself  in  a 
position  where  it  is  impossible  for  him  to  perform, 
it  would  seem  the  optionee  has  an  action  to  recover 
damages  arising  from  breach  of  the  option, 
although  he  has  not  elected.^ 

1  See  Abbott  v.  76  Land  &  W.  Co.,  101  Gal.  567,  53  P.  445 ;  Hoebster  v. 

Baruch,  5  Daly  (N.  Y.)  440;  see  Kirby  Carpenter  Co.  v.  Burnett, 
144  Fed.  635,  75  C.  C.  A.  437. 

As  to  a  mere  offer,  whether  with  or  without  a  time  limit,  it  is  not  a 
breach  by  the  optionor  to  withdraw,  before  acceptance,  and  conse- 
quently no  cause  of  action  arises,  see  Hochster  v.  Baruch,  supra. 

Of  course  the  optionee  has  no  right  of  action  when  the  option  time 
limit  expires  without  election,  Sivell  v.  Hogan,  119  Ga.  167,  46  S.  E. 
67,  and  can  not,  in  such  case,  recover  earnest  money  from  the  optionor, 
Scott  V.  Merrill's  Estate,  (Ore.)  146  P.  99. 

2  See  Haskins  v.  Eyan,  75  N.  J.  Eq.  330,  78  Atl.  566 ;  Myers  v.  Metzger, 

61  N.  J.  Eq.  522,  48  Atl.  1113. 

3  Pearson  v.  Home,  139  Ga.  453,  77  S.  E.  387.    The  Pearson  case  just 

cited  involved  a  "first  refusal."  The  optionor  sold  the  optioned 
property  to  a  third  person  without  giving  the  optionee  an  oppor- 
tunity to  purchase — ^that  is,  to  elect.  The  optionee  brought  suit  for 
damages,  alleging  he  was  ready,  able,  etc.,  to  purchase  and  would 
have  done  so  if  an  opportunity  had  been  offered.     A  demurrer  to  the 


505  REMEDIES  OP  OPTIONEE  §  1104 

Thus,  under  an  agreement  with  defendant,  a  land 
owner,  giving  plaintiff  the  agency  to  sell  certain 
lands  on  certain  commissions  and  also  granting  to 

complaint  was  overruled  and  the  ruling  was  aflfirmed  on  appeal.     It 
will  be  observed  that  no  election  was  alleged,  and,  for  the  very  plain 
reason   that   an   election   could   not   be   made,   under   this   form    of 
option,  until  the  optionee  was  advised  the  optionor  had  decided  to 
sell  and  of  the  price  offered  by  the  third  party.    (See  Myers  v.  Mc'i:<ger, 
61  N.  J.  Eq.  522,  48  Atl.  1113.)    In  Guilford  v.  Mason,  22  R.  I.  422, 
48   Atl.   386,  s.  e.  24  B.   I,  386,  53  Atl.   284,  the  option  was  the 
ordinary  one  to  purchase  shares  of  stock  of  a  corporation  for  a  price 
and  within  a  time  fixed.   The  optionee  attempted  to  tender  the  price 
by  check  within  the  time,  payment  being  the  act  of  election,  but  the 
optionor  evaded.     After  the  expiration  of  the  option,  the  optionor 
refused  to  transfer  the  stock  and   returned  the  consideration   paid 
for  the  option.    The  optionee  brought  assumpsit,  and  it  was  held  a 
strict  legal  tender  of  the  price  (election)  was  not  necessary,  and  all 
that  was  necessary  for  him  to  show  was  a  readiness  and  willingness 
to  perform  on  his  part.     It  will  be  observed  that  an  attempt  was 
made   to   elect  within   the  option  time,   but  was  prevented    by   the 
optionor.     But  apart  from  these  decisions,  it  would  seem  the  breach 
of  an  option  contract  to  keep  the  offer  open  during  the  stipulated 
time  does  not  differ  in  principle  from  the  breach  of  any  other  con- 
tract,  and   that,   therefore,  if   during   the  time   limit,   the   optionor 
breaches,  as  by  selling  the  property  to  a  third  person  under  circum- 
stances showing  a  repudiation  of  the  option,  the  idle  and  useless  act 
of  electing  is  not  necessary  to  entitle  the  optionor  to  sue  and  recover 
damages  for  such  breach,  if  an  action  is  brought,  or  if,  as  in  the 
Guilford  case,  some  act  is  done  by  the  optionee,  before  the  expiration 
of   the    option   time   limit,   to    show   his    intention    to    enforce    the 
option.     If,  on  the  facts  stated,  the  optionee  delays  his  action,  or 
the  assertion  of  his  rights  under  the  option,  until  after  the  expiration 
of  the  time  limit,  the  case  is  not  so  clear,  for  the  right  of  election 
is  lost  by  lapse  of  its  time  limit,  unless,  in  the  meantime,  the  optionee 
exercises  the  privilege.     This  is  a  general  statement  of  the  rule.     A 
distinction  can,  and  perhaps  should,  be  made  between  the  effect  of 
failure  to  elect,  on  the  right  to  raise  a  bilateral  contract  out  of  the 
option,  and  to  enforce  a  right  growing  out  of  breach  of  the  option 
contract  to  keep  the  ofer  open.    In  the  former  case,  by  failure  to 
elect,  the  optionee  loses  his  right  to  raise  a  binding  promise  on  the 
part  of  the  optionor  to  sell  the  property.     This  seems  clear.     In  tlie 
latter  case,  there  is  a  contract  which,  from  the  present  point  of  view, 
is  entirely  distinct  and  separate  from  the  former.    An  option  contract 
supported  by  a   consideration,  and   delivered,   and   otherwise   valid, 
does  not  require  any  act   on  the  part  of  the  optionor   to   keep  it 
alive  during  its  time  limit.     Election  is  not  necessary  to  keep  the 


^  Jl04:  LAW   OF    OPTION    CONTRACTS  506 

plaintiff  an  option  to  purchase,  and  providing  for 
certain  credits  of  commissions  on  the  option  price 
in  the  event  of  an  election  to  purchase,  where  the 
defendant,  before  the  expiration  of  the  option  time, 
breached  the  option  agreement  by  selling  the  land 
to  third  parties,  and  plaintiff  sued  for  damages 
arising  from  the  breach,  plaintiff  is  entitled  to 
recover  as  damages,  the  value  of  the  option  contract 
to  him,  and  is  also  entitled  to  recover  any  amount 
he  has  paid  on  the  option.* 

It  will  be  observed  that  as  an  option,  prior  to 
election,  is  not  a  sale,  or  an  agreement  to  sell  the 
land,  the  measure  of  damages  is  not  the  difference 
between  the  contract  price  and  the  market  value  of 
the  land,  the  rule  obtaining  where  the  optionee  has 
elected,  but  the  damages  recoverable  are  limited  to 
those  resulting  from  breach  of  the  option  contract 
itself,^  which,  however,  may  be  the  excess  of  the 

offer  open.  If  tliis  is  true,  and  the  optionor  breaks  his  promise  to 
keep  the  offer  open,  why  may  not  the  optionee,  by  an  action  at 
law,  at  any  time  within  the  period  fixed  by  the  Statute  of  Limita- 
tions, enforce  his  right  to  damages,  if  any,  growing  out  of  breach 
of  the  option  contract  as  distinguished  from  his  right  to  recover  dam- 
ages for  breach  of  the  Mlateral  contract  to  raise  which  an  election 
is  admittedly  necessary  in  every  case  (Sec.  702),  except  those  falling 
vrithin  the  rule  of  estoppel,  accident,  mistake,  etc.  (See  Sees.  864- 
870.)  See  Young  v.  Matthew  Turner  Co.,  168  Cal.  671,  143  P.  1029, 
1031. 
3  It  is  not  a  breach  by  the  optionor  when  he  bargains  the  optioned  prop- 
erty during  the  option  time  only  conditionally  upon  the  failure  of  the 
optionee  to  elect,  Smith  v.  Lawrence,  98  Me.  92,  56  Atl.  455;  see 
Sec.  702. 

4Sixta  V.  Ontonagon  Valley  Land  Co.,  157  Wis.  293,  147  N.  W.  1042, 
holding  the  question  is  "what  does  the  evidence  show  the  contract 
was  worth  to  plaintiffs." 

6  Sixta  V.  Ontonagon  Valley  Land  Co.,  supra;  see,  also,  Boyd  v.  DeLancey, 
45  N.  Y.  S.  693,  17  App.  Div.  567,  an  option  to  enter  into  a  contract 
of  sale ;  also  Bender  v.  Schatzkin,  96  N.  Y.  S.  203. 


507  REMEDIES — SALE  AND  RETURN  §  1105 

market  value  of  the  land  over  the  option  price,^  or 
depending  on  the  facts,  the  difference  between  the 
option  price  and  the  price  at  which  the  optionee 
has  contracted  to  resell  the  optioned  property.'^ 

Sec.  1105.  CASES  INVOLVING  SALE  AND 
RETURN. — Plaintiff  contracted  to  sell  certain 
stock  of  a  corporation  to  defendant,  at  its  option, 
for  a  certain  price,  and  within  a  certain  time.  Sub- 
sequently he  delivered  the  stock  to  defendant,  who 
executed  a  writing  acknowledging  the  receipt  of  the 
stock  and  agreeing  to  pay  therefor  according  to  the 
terms  of  the  option  contract,  or  return  the  stock 
within  a  certain  time.  It  was  held  that  on  failure 
to  return  the  stock  within  the  stipulated  time, 
defendant  became  liable  for  the  price.  ^  Under  an 
option  to  seU  stock,  upon  election  by  the  seller  to 
sell  and  tender  of  the  shares,  the  optionee  becomes 
entitled  to  a  transfer  of  the  title  to  the  stock  and 
the  optionor  has  a  right  to  sue  for  the  price. ^ 

6  Pearson  t.  Home,  139  Ga.  453,  77  S.  E.  387,  where  complaint  for  breach 
of  option  alleged  damages  as  difference  between  option  price  and 
market  value  and  was  sustained  as  against  a  general  demurrer. 

TNaylor  v.  Parker,  (Tex.  Civ.  App.)  139  S.  W.  93;  see  Boyden  v.  Hill, 
198  Mass.  477,  85  N.  E.  413 ;  also  Eoper  v.  Milboum,  93  Neb.  809, 
142  N,  W.  792,  Ann.  Gas.  1914B,  1225. 
Eule  of  damages  when  plaintiff  was  given  an  option  to  purchase  a 
mine,  the  optionors  covenanting  to  sink  a  shaft  at  least  100  feet  and 
failed  to  do  so,  Davis  v.  Eames,  (Gal.)  35  P.  566,  citing  and  dis- 
tinguishing Woodworth  v.  McLean,  97  Mo.  325,  11  S.  W.  43. 
Where  a  corporation  sells  its  assets  before  election  under  option  on  its 
stock,  the  price  for  the  assets  is  basis  for  damages.  Re  South  African 
etc.  Co.,  74  L.  T.  Rep.  796,  affirmed  77  L.  T.  Rep.  377. 

1  Stevens  v.  Hertzler,  109  Ala.  423,  19  So.  838 ;  see  Mason  v.  Decker, 

72  N.  Y.  595,  28  Am.  Rep.  190. 
As  to  sale  or  return,  see  Sees.  Ill,  828. 

2  Cutbill  V.  Peabody,  19  Cal.  App.  304,  125  P.  926. 


§  1106  LAW  OP  OPTION   CONTRACTS  508 

If  the  option  is  one  to  return  the  property  if  not 
liked  by  the  purchaser,  and  the  property  is  returned 
by  him  within  the  time  limit,  he  is  entitled  to 
recover  as  damages  the  amount  of  the  purchase 
price  paid.' 

When  the  optionee  elects  to  purchase,  under  the 
option,  and  the  optionor  breaches,  the  damages  for 
breach  are  measured  by  the  rule  applicable  to  agree- 
ments of  sale  and  purchase.* 

Sec.  1106.  CASES  INVOLVING  EXPIRED 
OPTIONS,    AND    UNEXPIRED    OFFERS.— 

Under  an  option  for  purchase  of  land  running  for 
'' fifteen  days  and  good  thereafter  until  with- 
drawn," the  consideration  for  which  was,  in  fact, 
an  oral  agreement  for  exchange  of  land,  where 
tender  of  a  deed  in  exchange  was  not  made  until 
after  the  lapse  of  fifteen  days,  and  after  withdrawal 
of  the  option  by  the  optionor,^  the  optionee  can  not 
thereafter  maintain  an  action  for  damages.^ 

And  so,  where  a  deposit  is  made  by  an  optionee 
to  secure  performance  of  his  offer  to  purchase  and 
to  be  applied  on  the  price  if  his  offer  is  accepted. 
If  the  optionee  withdraws  his  offer  to  purchase 
before  acceptance  by  the  optionor,  the  optionee  may 
recover  from  the  optionor  the  proceeds  of  a  deposit 
check  which  the  latter  had  cashed.* 

3  Giles  V.  Bradle7,  2  John.  Cas.  (N.  Y.)  253. 

4  See  Sec.  1118. 

1  Hay  V.  Mason,  141  Cal.  722,  75  P.  300. 

2  See  Loeffler  v.  Wright,  13  Cal.  App.  224,  109  P.  269. 

3  Sooy  V.  Winter,  (Mo.  App.)  .175  S.  W.  132,  the  court  holding  that  such 

deposit  was  without  consideration,  the  optionor  not  agreeing  to  do 
anything. 


609  REMEDIES — OPTIONS  TO  SELL  §  1107 

And  so,  also,  where  the  optionor  fails  to  grade 
the  optioned  property  as  stipulated,  the  optionee 
may  recover  back  his  payment  made  under  the 
contract.* 

Sec.  1107.  CASES  INVOLVING  OPTIONS 
TO  SELL. — If  the  option  is  one  to  sell,  as  distin- 
guished from  an  option  to  purchase,  for  which  a 
deposit  is  made  by  the  purchaser,  the  only  remedy 
of  the  purchaser,  when  the  vendor  does  not  exercise 
his  option  to  sell,  is  the  recovery  of  the  deposit 
money.  Thus,  when  the  option  in  a  lease  for  which 
a  deposit  of  $50  was  made  by  the  purchaser,  pro- 
vides that  if  the  vendor  furnishes  a  good  and  suf- 
ficient warranty  deed  in  30  days,  the  purchaser  is 
to  pay  the  remaining  $350  within  a  certain  time,  but 
if  the  vendor  does  not  furnish  the  deed  within  30 
days,  the  deposit  shall  be  returned  to  the  purchaser, 
the  only  remedy  of  the  purchaser  is  to  recover  the 
deposit ;  he  can  not  maintain  a  suit  to  compel  the 
vendor  to  convey.^ 

Similar  to  the  Barker  case  is  a  Massachusetts 
case  where  the  optionor  agreed  to  recommend  to 
the  optionee  certain  lands,  within  a  fixed  time,  and 
promised  that  if  the  sale  was  not  completed  within 
one  month,  he  would  return  the  $500  paid,  the 
instrument  reciting  that  it  was  not  the  intention  to 
bind  either  of  the  parties  to  complete  the  transac- 
tion. The  optionor  did  not  complete  the  transaction 
within  one  month,  and  it  was  held  the  optionee 
could  recover  the  money  paid.^ 

4  Richards  v.  Creighton,  (Tex.  Civ.  App.)    157  S.  W.  456. 

1  Barker  v.  Critzer,  35  Kan.  459,  11  P.  382. 

2  Sirk  V.  Ela,  163  Mass.  394,  40  N.  E.  183. 


§§  11G8,  1109     LAW  OF  OPTION  CONTRACTS  510 

Sec.  1108.  OPTION  CASES  INVOLVING 
APPLICATION  OF  PAYMENTS  AS  RENT.— 
Defendant  paid  plaintiff  money  under  an  agree- 
ment that  on  payment  of  a  further  simi,  within  a 
specified  time,  plaintiff  would  sell  him  a  certain 
vessel,  and  that  if  defendant  failed  to  exercise  the 
option,  the  cash  payment  should  be  retained  by 
plaintiff  as  rent  for  the  vessel,  and  defendant  should 
owe  plaintiff  nothing  more.  Defendant  did  not  elect 
to  buy  within  the  time  specified,  and  it  was  held 
plaintiff  could  not  recover  damages  from  defendant 
for  his  alleged  breach  of  the  contract,  as  the  reten- 
tion of  the  money  by  plaintiff  relieved  the  defen- 
dant from  any  further  obligation  under  it/ 

Sec.  1109.  OPTION  CASES  INVOLVING 
TITLE. — Where  the  vendor  holds  an  option  only 
on  the  land,  and  does  not  acquire  title  during  the 
life  of  an  option  to  purchase  the  land,  which  he  had 
given  to  a  third  person,  the  vendor  can  not  main- 
tain an  action  for  breach  of  the  option  contract, 
resulting  from  the  refusal  of  the  third  person  to 
comply  with  the  option,  the  option  giving  the  third 
person  the  right  to  decline  to  perform  if  the  title  is 
not  legally  sufficient,  or  not  perfected  within  a 
reasonable  time,  where  he  renounces  the  option 
before  its  expiration,  on  the  ground  the  title  is  not 
satisfactory/ 

Where  an  option  makes  the  optionee  the  exclusive 
judge  of  the  sufficiency  of  the  title  to  the  property, 
and  provides  that  the   deposit  money   shall  be 

1  OUinger  v.  Bruce  Dry  Dock  Co.,  158  AJa.  173,  48  So.  482. 
1  Thrower  v.  Logan,  137  Ga.  655,  74  S.  E.  253. 


511  REMEDIES  INVOLVING  TITLE  §  1109 

returned  if  the  title  is  rejected,  and  the  optionee, 
in  good  faith,  rejects  the  title,  he  may  maintain  an 
action  against  the  optionor  to  recover  the  deposit 
money.  ^ 

If  title  to  the  property  proves  imperfect,  there  is 
an  implied  obligation  on  the  part  of  the  owner  to 
return  the  earnest  money,^  and  where  the  title  to  the 
land  is  not  satisfactory  to  the  optionee,  his  only 
remedy  is  to  recover  the  purchase  money  paid ;  he 
can  not  compel  the  optionor  to  clear  up  the  title.^ 

And  so,  where  plaintiff  made  a  payment  under 
an  option  on  land  belonging  to  defendant  under  a 
prior  unrecorded  deed,  of  which  plaintiff  had 
notice,  and  both  plaintiff  and  defendant  acted  in 
good  faith,  plaintiff  can  recover  from  defendant 
only  the  amount  actually  paid  before  notice  of 
defendant's  rights.^ 

Where  one  enters  upon  and  cultivates  plantation 
property,  with  an  option  of  buying,  or  paying  rent, 
at  the  end  of  a  year,  and  at  the  end  of  the  year, 
voluntarily  abandons  the  option  and  the  property, 
he  can  not  recover  damages  alleged  to  have  been 
sustained  by  reason  of  the  failure  of  the  owner  of 
the  property  to  make  him  title.^  Nor  can  an  action 
for  damages  for  breach  be  maintained  on  a  written 

2  Simmons  v.  Zimmerman,  144  Cal.  256,  79  P.  457,  1  Ann.  Gas.  850 ;  see, 
also,  Delano  v.  Saylor,  (Ky.)  113  S.  W.  888. 

S  Indiana  etc.  Co.  v.  Pharr,  82  Ark.  573,  102  S.  W.  686,  especially  where 
the  optionee  rescinds  on  that  ground  and  the  optionor  does  not  perfect 
the  title  within  the  stipulated  time,  Burks  v.  Davies,  85  Cal.  110, 
24  P.  615,  20  A.  S.  R.  213. 

4  Friendly  v.  Elwert,  57  Ore.  599,  105  P.  404,  112  P.  1085,  Ann.  Caa. 

1913A,  357;  but  as  to  encumbrances,  see  Sees.  910,  1006. 

5  Lindley  v.  Blumberg,  7  Cal.  App.  140,  93  P.  894. 

6  Darragh  v.  Vicknair,  126  La.  171,  52  So.  264. 


§  1110  LAW  OF  OPTION  CONTRACTS  512 

option,  where  the  land  is  so  vaguely  described  that 
the  writing  furnishes  no  key  to  its  identification/ 

Sec.  1110.  OPTION  OASES  INVOLVING 
FRAUD. — Where  the  option  was  procured  through 
fraud  of  the  optionee,  he  can  not  maintain  a  suit 
against  the  optionor,  for  damages,  for  breach  of 
contract,  that  is,  for  refusal  to  convey.* 

That  a  tenant,  obtaining  a  lease,  secretly  acted 
for  another,  does  not  prevent  him  from  suing  for 
breach  of  contract  to  convey,  on  his  exercise  of  the 
option  contained  in  the  lease.^ 

Where  an  option  contract  falsely  represented 
that  the  optionor 's  title  to  the  land  was  good,  a 
prospective  purchaser  can  not  recover,  as  damages 
for  such  representations,  expenses  incurred  by  him 
in  examining  the  land  prior  to  the  time  he  secured 
the  option.^ 

A  lease  of  land  for  oil  purposes  contained  a  pro- 
vision that  the  lessee  should  have  the  refusal,  for 
three  months,  of  certain  other  land  of  the  lessor  on 
terms  equal  to  the  price  offered  by  any  other  person 
therefor.  The  lease  was  assigned.  The  assignee 
notified  the  lessor  of  his  election  to  take  a  lease  of 
the  other  land  and  the  lessor  notified  him  that 
$20,000  had  been  offered  for  a  lease  of  the  property. 
That  amount  was  paid  and  a  lease  taken.  In  fact 
the  best  bona  fide  offer  that  had  been  made  was 
$10,000.    It  was  held  the  assignee  could  recover 

7  Tippins  V.  Phillips,  123  Ga.  415,  51  S.  E.  410. 

1  Colbert  v.  Shepherd,  89  Va.  401,  16  S.  E.  246. 

2  Walshe  v.  Endom,  129  La.  148,  55  So.  744. 

3  Clark  V.  East  Lake  L.  Co.,  158  N.  C.  139,  73  S.  E.  793. 


513  REMEDIES — LIQUroATED  DAMAGES  §  1111 

$10,000  damages  without  regard  to  the  value  of  the 
other  lease."* 

If  the  optionor,  by  his  conduct,  prevents  the 
optionee  from  accepting  the  offer,  he  is  liable  to 
the  optionee  in  assumpsit.^ 

And  so,  where  the  optionor  conveys  the  land  to  a 
bona  fide  purchaser,  the  optionee  may  recover  the 
amounts  paid  on  the  contract,  and  also,  where  the 
payments  were  made  by  the  optionee  to  the  optionor 
under  fraudulent  representations  by  the  latter 
leading  the  optionee  to  believe  the  instrument  was 
an  agreement  to  convey  instead  of  an  option.® 

Sec.  1111.  OPTION  CASES  INVOLVINO 
^'LIQUIDATED     DAMAGE"     CLAUSES.— If 

the  option  stipulates  what  the  damages  shall  be  in 
case  of  breach  by  the  optionee,  and  the  case  is  one 
where  the  damages  resulting  from  a  breach,  are 
uncertain  and  do  not  fall  within  any  fixed  and 
established  rule  of  law  for  measuring  damages,  the 
stipulation  will  be  upheld  and  enforced.^  In  such 

4  Guffej  V.  Clever,  146  Pa.  548,  23  Atl.  161. 

5  Guilford  v.  Mason,  24  R.  I.  386,  53  Atl.  284. 

6  Torrey  v.  McFadyen,  165  N.  C.  237,  81  S.  E.  296. 

1  Womaek  v.  Coleman,  89  Minn.  17,  93  N.  W.  663,  92  Minn.  328,  100  N.  W. 
9,  case  where  option  provided  that  first  payment  of  $15,000,  evidenced 
by  promissory  note  of  optionee  and  one  endorser,  be  placed  in  escrow 
to  be  delivered  to  optionor  as  an  absolute  forfeiture  and  indemnity 
in  case  optionee  failed  to  pay  the  price  on  tender  of  marketable 
and  sufficient  title.  The  optionor  tendered  such  title,  thus  putting 
optionee  in  default,  and  was  held  entitled  to  retain  the  $15,000  note 
as  liquidated  damages. 

The  same  rule  was  applied  in  Garcin  v.  Pennsylvania  Furnace  Co.,  186 
Mass.  405,  71  N.  E.  793,  involving  an  option  for  the  purchase  of  an 
iron  manufacturing  plant,  the  option  providing  for  forfeiture  and 
directing  the  depositary  to  pay  over  the  deposit  money  to  the  optionor 

33 — Option  Contracts. 


§  1111  LAW   OP   OPTION   CONTRACTS  514 

case,  no  other  or  greater  damages  can  be  recovered. 
Thus,  where  an  option  for  the  purchase  of  a  mine 
provided  for  certain  payments  and  certain  work, 

in  case  of  optionee's  default,  the  court  holding  the  deposit  was  not 
merely  to  secure  the  optionor  against  loss.  But  it  is  otherwise  when 
the  optionor  fails  to  tender  his  deed  of  conveyance  within  the  option 
time,  McHenry  v.  Mitchell,  219  Pa.  297,  68  Atl.  729;  Lumaghi  v.  Abt, 
126  Mo.  App.  221,  103  S.  W.  104. 
1  Whether  a  stated  sum  is  liquidated  damages  or  a  penalty,  is  to  be 
determined  from  all  the  circumstances  surrounding  the  execution 
of  the  contract  and  they  may  be  shown  by  parol  evidence  without 
varying  the  contract,  Kinkaid  v.  Levy,  151  Mo.  App.  352,  131  S.  W. 
757. 
In  Smith  v.  Newell,  37  Fla.  147,  20  So.  249,  Justice  Taylor,  speaking 
of  the  rules  of  construction  and  remedies,  said:  "If  the  contract 
provides  for  a  definite  sum  as  the  liquidated,  stated,  or  stipulated 
amount  to  be  paid  upon  a  breach  thereof,  then  the  amount  so  stipu- 
lated, liquidated,  and  fixed  upon  by  the  parties  can  be  directly  sued 
for  in  debt  or  assumpsit,  and  recovered,  as  is  attempted  in  this  case ; 
and  in  such  event  no  proof  is  necessary  on  the  plaintiff's  part  of  the 
Bustainment  of  any  actual  loss  or  damage  by  reason  of  the  defendant 's 
breach,  but  he  sues  for  and  recovers  the  stipulated  sum  as  upon 
a  special  and  specific  promise  to  pay  that  sum.  All  that  is  necessary 
to  entitle  the  plaintiff,  in  such  a  case,  to  recover  the  stipulated  sum, 
is  to  show  the  breach  of  the  contract  upon  which  the  payment  thereof 
depends.  If,  on  the  other  hand,  the  sum  mentioned  in  the  contract 
to  be  paid  upon  a  breach  thereof  is  construed  to  be  merely  a  penalty, 
and  not  liquidated  or  stipulated  damages,  then  the  plaintiff  must  sue 
for  the  damage  actually  resulting  from  the  breach,  and  not  for 
the  specific  sum  named  as  the  penalty,  and  must  allege,  not  only 
the  breach  of  the  contract,  but  such  other  essential  matters  of  fact 
as  are  necessary  to  show  that  he  has  sustained  actual  damage  by 
reason  of  the  breach;  and  he  must  prove  the  actual  damage  that  he 
has  sustained,  and  he  can  not,  in  such  a  case,  recover  any  greater 
sum  as  damages  than  his  proofs  show  him  to  have  actually  sustained 
in  consequence  of  the  breach  of  the  contract.  In  such  cases  the 
plaintiff  is  entitled  to  recover  all  such  damages  as  he  proves  himself 
to  have  actually  sustained  in  consequence  of  the  breach,  whether  they 
exceed  the  amount  of  the  penalty  mentioned  in  the  contract  or  not. 
The  amount  of  the  penalty  does  not,  in  such  cases,  limit  the  amount 
of  the  recovery.  Noyes  v.  Phillips,  60  N.  Y.  408.  Whether  the  sum 
mentioned  in  the  contract  is  to  be  considered  as  liquidated  damages, 
or  as  a  penalty  merely,  is  always  a  question  of  law  for  construction 
by  the  court.  It  is  a  question  that  has  often  come  before  the  courts, 
both  in  this  country  and  in  England,  and  has  given  rise  to  as  great  a 
variety  of  judicial  utterance  as  there  are  kinds  of  contracts  among 


515  REMEDIES — LIQUIDATED   DAMAGES  §  1111 

at  certain  times,  by  the  optionee,  and  that  if  he 
should  fail  to  pay  any  of  the  installments  of  the 
price,  or  should  fail  to  comply  with  any  of  the 
covenants  or  conditions  of  the  option,  the  contract 
should  terminate,  and  all  installments  or  other 
sums  which  may  have  been  paid  by  the  optionee, 
should  be  forfeited  and  become  liquidated  damages, 
such  provisions  limit  the  damages,  where  the  con- 
tract is  forfeited  by  abandonment,  to  the  work 
done  and  payments  made  by  the  optionee,  and 
exclude  recovery  for  the  price  of  imperformed 
labor  and  unpaid  installments.^ 

A  provision  in  a  contract  for  the  sale  of  land  that 
a  default  in  the  payment  of  an  installment  of  the 
price  shall  abrogate  it,  and  that  the  vendor  may 
re-enter  and  that  all  improvements  put  on  the 
property  by  the  vendee  and  all  payments  on  account 
of  the  price,  shall  be  forfeited  to  the  vendor  as 

men.  All  the  courts  agree  that,  for  its  solution,  no  fixed  or  general 
rule  can  be  laid  down  for  the  government  of  all  cases,  but  that  each 
ease  must  necessarily  stand,  for  its  proper  construction,  in  large 
measure  upon  its  own  bottom.  Some  general  niles  have  become  well 
established,  however,  for  the  guidance  of  the  courts  in  solving  the 
question  whenever  presented,  that  will  govern  the  construction  to  be 
placed  upon  all  contracts  whose  distinguishing  terms  and  provisions 
bring  them  within  the  limits  of  such  rules.  Among  the  general  rules 
of  construction  so  settled  and  agreed  upon  hj  the  courts,  there  ia 
none  more  firmly  established  than  the  following:  'A  sum  fixed  as 
security  for  the  performance  of  a  contract  containing  a  number  of 
stipulations  of  widely  different  importance,  breaches  of  some  of  which 
are  capable  of  accurate  valuation,  for  any  of  which  the  stipulated 
snm  is  an  excessive  compensation,  is  a  penalty.'  1  Sedg.  Dam.  (8th 
Ed.),  See.  411,  and  citations." 

1  In  an  option  to  purchase  property  valued  at  $2,000,000,  a  stipulation 

for  $15,000  as  liquidated  damages  for  non-fulfillment  is  reasonable, 
Leeman  v.  Edison  El.  Co.,  53  N.  Y.  S.  302. 

2  K.  P.  Min.  Co.  V.  Jacobson,  30  Utah.  115,  83  P.  728,  4  L.  R.  A.  (N.  S.) 

755. 


§  1112  LAW   OF   OPTION    CONTRACTS  516 

liquidated  damages  for  use  and  occuxDation  of  the 
property,  does  not  limit  the  vendor  to  repossessing 
himself  of  the  property,  but  he  may  recover  the 
unpaid  installments.^ 

Sec.  1112.  OPTION  CASES  INVOLVING 
FORFEITURE  CLAUSES.— The  optionee  can 
not  recover  the  consideration  given  for  an  option  or 
deposits  made  thereunder,  or  installments  paid  on 
the  price  if,  without  fault  of  the  optionor,  he  fails 
timely  and  properly  to  elect. ^  The  rule  respecting 
forfeitures  sometimes  applied  to  bilateral  contracts 
does  not  apply  to  options.  In  the  latter  class  of 
contracts,  it  is  understood,  in  the  absence  of  an 
express  stipulation  to  the  contrary,  that  the 
optionor  shall  retain  all  payments  made,  in  the 
event  of  default  by  the  optionee,  and  likewise  upon 
rescission,  unless  the  circumstances  imply,  or  the 
agreement  to  rescind  provides  for  re-payment.^ 

The  rule  grows  out  of  the  nature  of  the  option 
contract.  In  these  contracts,  election,  or  perform- 
ance constituting  election  by  the  optionee,  is  a 
condition  precedent,  and  the  optionee  can  not 
secure  relief  for  his  failure  to  perform  such  a  con- 
dition, even  in  equity,  unless  it  is  evident  the 
stipulation  as  to  forfeiture  is  in  the  nature  of 

3  Reed  v.  Hickey,  13  Cal.  App.  136,  109  P.  38. 

1  Torrey  v.  McFayden,  165  N.  C.  237,  81  S.  E.  296;  Scott  v.  MerrUl's 

Estate,  (Ore.)  146  P.  99. 

2  Clark  V.  American  Dev.  &  M.  Co.,  28  Mont.  468,  72  P.  978,  this  was  an 

option  on  mining  property  and  it  would  seem  the  rule  is,  so  to  speak, 
more  strictly  applied  to  such  options;  also  Williams  v.  Brooks, 
11  Idaho  539,  83  P.  610. 


517  REMEDIES — FORFEITURE   CLAUSES  §  1113 

security,  that  is  to  say,  one  of  strict  penalty  or  for- 
feiture. The  rule  might  be  applicable  where  a  very 
large  sum  was  paid  for  the  option  privilege,  or  on 
account  of  the  price,  but  only  on  the  theory  that 
thereby  some  estate  or  interest  in  the  property  had 
passed  to  the  optionee,^  but  in  the  ordinary  case  of 
a  nominal  or  small  payment,  the  option  right  and 
the  moneys  paid  thereunder,  are  absolutely  lost  by 
the  default  of  the  optionee,  the  optionor  not  being 
in  default.* 

A  forfeiture  clause,  however,  does  not  entitle  the 
optionor  to  retain  the  money  paid  by  the  optionee 
thereon,  where  the  optionor  is  not  the  owner  of  the 
whole  title  he  contracts  to  convey,  and  the  optionee 
learning  of  this  defect,  rescinds  the  contract.  In 
such  case,  the  optionee  is  entitled  to  recover  back 
the  money  paid  on  the  contract,  if  the  optionor  fails 
to  perfect  his  title  within  the  stipulated  time.* 

Sec.  1113.  OPTION  CASES  INVOLVING 
''NULL  AND  VOID"  CLAUSES.— A  contract 
for  the  sale  of  land  on  a  certain  day  and  providing 
"that  if  payment  is  not  made  on  said  day  that  this 
contract  is  to  be  null  and  void,"  and  the  vendor 
released  from  aU  obligations  to  the  vendee,  is  a 
mere  option  to  purchase  and  gives  neither  party  a 
claim  for  damages.^ 

3  See  note  4,  See.  501. 

4  See  Nelson  v.  Stephens,  107  Wis.  136,  82  K  W.  163. 

B  Burks  V.  Davies,  85  Cal.  110,  24  P.  613,  20  A.  S.  E.  213. 

1  Huggins  V.  Safford,  67  Mo.  App.  469. 


§  1114  LAW  OP  OPTION  CONTRACTS  518 

Sec.  1114.  OPTION  CASES  INVOLVING 
LIABILITY  OF  TELEGRAPH  COMPANY 
FOR  NEGLIGENT  TRANSMISSION  OF 
TELEGRAMS.— The  appellees  delivered  a  tele- 
gram to  appellant  for  transmission,  reading  * '  Can 
get  option  for  one  twenty-five  per  acre  for  forty 
days  putting  up  five  hundred  dollars"  which  was 
negligently  made  to  read  ** seventy-five"  instead  of 
''one  twenty-five."  It  was  shown  that  had  the  tele- 
gram been  correctly  transmitted,  the  option  would 
not  have  been  accepted,  and  it  was  held  that  the 
$500  option  which  was  put  up  and  lost  through  the 
mistake,  was  damages  reasonably  in  contemplation 
of  the  parties  and  for  which  the  appellant,  tele- 
graph company,  was  liable.^ 

Plaintiff  when  he  delivered  a  telegram  to  the 
agent  of  the  defendant  company,  stating,  in  answer 
to  a  telegraphic  inquiry,  that  he  would  sell  500  head 
of  cows  at  a  certain  price,  the  trade  to  be  closed  the 
next  day,  informed  the  agent  that  he  had  an  option 
on  that  niunber  of  cows,  and,  if  the  telegram  was 
not  delivered  at  once,  he  would  lose  the  profit  on 
the  sale.  In  a  suit  against  the  company  for  damages 
for  failure  to  deliver  the  telegram,  it  was  held  the 
damages  resulting  to  plaintiff  measured  by  the 
difference  between  the  price  at  which  the  cattle 
would  have  been  delivered  to  plaintiff,  and  the  price 
at  which  he  could  have  sold  them  to  the  vendee,  had 
the  telegram  been  delivered,  were  not  too  specula- 
tive to  be  recoverable.^ 

1  Western  Union  T.  Co.  v.  Robertson,  (Tex.  Civ.  App.)  126  S.  W.  629. 

2  Western  Union  T.  Co.  v.  Williams,  57  Tex.  Civ.  App.  267,  137  S.  W.  148. 


519  REMEDIES — MISCELLANEOUS   OPTIONS  §  1115 

Sec.  1115.  MISCELLANEOUS  CASES  IN- 
VOLVING ACTIONS  UNDER  OPTIONS.— 
Defendant  company  gave  an  exclusive  option  to 
buy  or  sell  land  belonging  to  it  at  a  certain  price, 
by  a  date  named,  and  the  optionee  gave  plaintiff  the 
exclusive  option  to  bu}^  the  land  by  that  date,  and 
agreed  to  pay  him  $1000  if  he  did  so,  and  it  was 
held  plaintiff  had  no  right  of  action  against  the 
company  for  what  he  paid  for  the  option,  nor  for 
the  $1000,  though,  in  fact,  he  procured  purchasers 
for  the  land,  it  not  appearing  the  company 
employed  him,  or  agreed  to  pay  for  his  services.^ 

Plaintiff  conceived  a  scheme  for  combining  the 
lead  interests  of  the  county,  and  in  connection 
therewith,  secured  options  for  the  purchase  of 
plants.  He  presented  the  scheme  to  defendant,  who 
formed  a  corporation  as  planned,  but  excluded 
plaintiff,  and  it  was  held  that  plaintiff,  if  he  trans- 
ferred the  option  to  defendant,  could,  in  the  absence 
of  special  agreements,  recover  only  the  damages  for 
their  wrongful  conversion.^ 

The  owner  of  an  option  on  coal  land  agreed  to 
grant  and  sell  all  the  optioned  coal  land,  the  pur- 
chaser paying  $1  for  the  option  on  the  seller's 
option,  and  on  election  and  notice,  agreed  to  pay 
the  original  optionors  the  several  sundry  sums 
stipulated  in  their  option,  and  the  further  sum  of 
$40  per  acre  to  the  seller  of  the  option,  for  ever}^ 
acre  which  the  purchaser  elected  to  purchase,  and 

1  Cummings  v.  Town  of  Lake  R.  Co.,  86  Wis.  382,  57  N.  W.  43. 

2  Haskins  v.  Eteii,  75  N.  J.  Eq.  330,  78  Atl.  566. 

See  Twin  City  Power  Co.  v.  Barrett,  126  Fed.  302,  61  C.  C.  A.  288, 
where  plaintiff,  as  assignor  of  option,  recovered  price  from  assignee 
upon  default  of  latter  to  turn  over  bonds  of  corporation  to  be 
formed. 


§  1116  LAW  OF  OPTION  CONTRACTS  520 

should  'Hake  up.'^  The  second  party  thereafter 
elected  and  gave  notice  to  the  seller  of  the  option, 
but  failed  to  exercise  his  right  to  purchase  from  the 
original  optionor  after  he  became  its  owner,  and  it 
was  held  the  owner  of  the  original  option  was 
entitled  to  recover  from  the  purchaser  the  differ- 
ence between  the  option  price  and  $40  per  acre.^ 

Plaintiff  and  defendants  entered  into  an  agree- 
ment providing  that  if  plaintiff  would  deliver  an 
option  on  certain  land  and  perform  certain  services, 
defendants  would  take  a  lease  on  the  property,  erect 
a  theatre  thereon,  and,  after  their  advances  had 
been  deducted,  would  make  him  a  full  partner  with 
them  in  the  concern,  and  plaintiff  delivered  the 
option  to  defendants  and  performed  all  the  services 
possible  on  his  part,  but  not  in  full,  owing  to  the 
fact  that  defendants  refused  to  go  forward  with 
the  performance  of  the  agreement.  It  was  held 
plaintiff  was  entitled  to  recover  both  the  value  of 
his  option  surrendered,  and  the  value  of  his  services 
rendered.* 

Sec.  1116.  ACTION  BY  VENDOR  FOR 
PRICE  UNDER  BILATERAL  CONTRACT. 
REAL  PROPERTY.— The  decisions  of  the  courts 
on  the  subject  matter  of  this  section  are  at  variance. 
Some  hold  the  only  remedy  of  the  vendor  for  a 
default  of  the  purchaser  in  payment  of  the  price, 
under  an  executory  contract  for  purchase  of  land, 
is  an  action  for  damages.  Others  hold  the  vendor 
has,  also,  an  action  at  law,  or  a  suit  in  the  nature 
of  specific  performance,  to  recover  the  price. 

8  Strasser  v.  Steck,  216  Pa.  577,  66  Atl.  87. 
4  Eastman  v.  Dunn,  34  R.  I.  416,  83  Atl.  1057. 


521  REMEDIES  FOR  PRICE  §  1116 

The  decisions  all  agree  the  vendor,  in  the  case 
stated,  has  an  action  at  law  to  recover  damages  for 
the  breach,  and,  in  many  jurisdictions,  it  is  held 
that,  in  a  proper  case,  the  vendor  has  a  suit  in 
equity  for  specific  performance  of  the  contract 
which  has  for  its  object  the  recovery  of  the  price 
upon  transfer  of  the  title  to  the  property.  There 
is  disagreement,  however,  whether  the  vendor  has 
an  action  at  law  to  recover  the  price/ 

1  Holding  the  vendor  may  recover  the  price,  see  Anderson  v.  Wallace  L. 
Co.,  30  Wash.  147,  70  P.  247;  Goodpaster  v.  Porter,  11  Iowa  161, 
option;  Oatman  v.  Walker,  33  Me.  67,  price  and  interest,  deed  ten- 
dered; Garrard  v.  Dollar,  49  N.  C.  175,  67  Am.  Dec.  271,  full  per- 
formance by  vendor;  Curran  v.  Eogers,  35  Mich.  221,  deed  tendered 
and  possession  taken;  Gray  v.  Meek,  199  HI.  136,  64  N.  E.  1020,  to 
recover  installments,  no  deed  tendered;  North  Stockton  etc.  Co.  v. 
Fischer,  138  Cal.  100,  70  P.  1082,  71  P.  438,  balance  of  price  reeoT- 
ered,  deed  having  been  tendered. 

Hodges  V.  Kowing,  58  Conn.  12,  18  Atl.  979,  7  L.  E.  A.  87,  holding 
action  at  law  for  damages  for  excess  of  price  over  market  value  under 
the  circumstances  v^as  not  adequate  and  specific  performance  was 
appropriate  remedy  to  recover  price. 

Prichard  v.  MulhaU,  127  Iowa  545,  103  N.  W.  774,  4  Ann.  Cas.  789, 
holding  that  an  action  at  law  to  recover  the  contract  price  will  not 
lie,  the  court  saying  "the  decided  weight  of  authority  is  to  the 
effect  that,  upon  breach  by  the  vendee  of  an  executory  contract  for 
the  sale  of  land,  the  vendor's  remedy  is  in  equity  for  specific  per- 
formance, or  at  law  for  damages  and  that  an  ordinary  action  for 
the  recovery  of  the  contract  price  will  not  lie." 

Heed  v.  Dougherty,  94  Ga.  661,  20  S.  E.  965,  holding  where  no  con- 
veyance of  title  and  possession  not  taken,  vendor  has  only  two  reme- 
dies, specific  performance  or  action  at  law  for  damages,  but  so  long 
as  title  remains  in  vendor  he  can  not  maintain  an  action  for  the 
purchase  money,  or  for  balance  of  the  same. 

Goodwine  v.  Kelley,  33  Ind.  App.  57,  70  N.  E.  832,  holding  purchase 
price  not  recoverable  in  action  at  law,  as  measure  of  damages  is  the 
excess  of  the  price  over  the  fair  or  cash  market  value  of  land  at  the 
time  of  breach;  also  Carter  v.  Eeaume,  159  Mich.  160,  123  N.  W.  539; 
also,  Hogan  v.  Kyle,  7  Wash.  595,  35  P.  399,  38  A.  S.  E.  910;  Davis  v. 
Watson,  89  Mo.  App.  15;  Glock  v.  Howard  &  W.  Colony  Co.,  123 
Cal.  1,  10,  55  P.  713,  43  L.  E.  A.  199,  69  A.  S.  E.  17;  Bessinger  v. 
Erhardt,  77  N.  Y.  S.  577,  34  App.  Div.  169;  Congregation  v.  Church, 


§  1116  LAW    OF    OPTION    CONTRACTS  522 

May  a  vendor  retain  the  title  and  ownership  of 
the  land  and  recover  the  price  ?  May  he  recover  the 
price  if  he  tenders  a  deed  of  conveyance? 

Clearly,  in  the  case  stated,  he  may  not  recover 
the  price,  either  at  law  or  by  means  of  specific  per- 
formance, without  tendering  his  deed,  and,  on  prin- 
ciple, he  maj  not  recover  the  price,  as  such,  upon 
tendering  his  deed  except  by  suit  in  equity  or  in 
an  action  at  law  which  has  for  its  object  the  specific 
enforcement  of  the  contract  in  accordance  with 
equitable  principles,^  for  it  is  in  such  a  proceeding 
only  that  transfer  of  the  title  can  be  had  and  it  is 
only  when  the  title  has  been  transferred,  or  a  deed 
tendered,  and  the  tender  kept  good,^  that  the  vendor 

10  Abb.  Pr.  (N.  S.)  484,  and,  contra,  Eichards  v.  Edick,  17  Barb. 
(N.  Y.)  260,  holding  price  may  be  recovered  in  an  action  at  law; 
Dopp  V.  Richards,  43  Utah  332,  135  P.  98,  where  vendor  re-entered. 

2  In  some  jurisdictions  recovery  of  the  price  is  allowed  in  an  action  at 
law,  the  form  of  the  action  being  disregarded,  the  facts  being  suf- 
ficient under  code  practice  to  grant  equitable  relief,  Gilpin  Co.  Mine 
Co.  v.  Drake,  8  Colo.  586,  9  P.  787. 
Also,  in  accordance  with  equitable  principles,  see  Rindge  v.  Baker, 
57  N.  Y.  209,  15  Am.  Eep.  475;  Murray  v.  EUis,  112  Pa.  485, 
3  Atl.  845;  Von  Roeder  v.  Robson,  20  Tex.  754;  O.  W,  Kerr  Co,  v. 
Nygren,  114  Minn.  268,  130  N.  W.  1112,  1114. 

8  Dunn  V.  Mills,  70  Kan,  656,  79  P.  146,  3  Ann.  Cas.  363,  the  vendee  was 
in  possession  and  refused  to  give  it  up.  The  vendor's  deed  was 
required  to  be  placed  with  the  clerk  of  the  court;  see  Carter  v. 
Eeaume,  159  Mich.  160,  123  N.  W.  539;  Johnston  v.  Wadsworth, 
24  Ore.  494,  34  P.  13 ;  King  v.  Smith,  33  Vt.  22. 

Tender  of  deed  for  land  must  be  kept  good,  probably  placed  in  custody 
of  court  for  delivery.  The  rule  applicable  to  sale  of  personal  prop- 
erty, that  tender  of  the  specific  articles  at  the  proper  time  and 
place  operates  to  pass  title,  has  no  application,  see  Prichard  v. 
Mulhall,  127  Iowa  545,  103  N.  W.  774,  4  Ann.  Cas.  789. 

An  exception  is  made  in  some  cases  where  notes  are  given  for  the 
purchase  money  and  the  suit  is  on  the  note,  see  Snyder  v.  Murdock, 
51  Mo.  175;  Leopold  v,  Furber,  84  Ky,  214,  1  S,  W,  404,  8  Ky.  L. 
Rep.  198,  installment  notes;  Brame  v.  Swain,  111  N.  C.  540,  15  S.  E. 


523  REMEDIES  OF  VENDOR  FOR  DAMAGES        §  1117 

is  entitled  to  recover  the  price,  as  such,  in  lieu  of 
damages.  Otherwise,  the  vendor  would  have  both 
the  property  and  the  price,  a  result  not  in  harmony 
with  equitable  principle  and  certainly  not  in  keep- 
ing with  the  theory  of  damages  for  breach  of  con- 
tract."* 


Sec.  1117.  ACTION  BY  VENDOR  FOR  DAM- 
AGES UNDER  BILATERAL  CONTRACT. 
RULE  OF  DAMAGES.— The  general  rule,  where 
no  part  of  the  price  has  been  paid,  is  that  the 
vendor,  on  breach  of  the  contract  on  the  part  of  the 
purchaser,  in  payment  of  the  price,  is  entitled,  as 
damages,  to  the  excess  of  the  contract  price  with 
interest  added,  over  the  market  value  of  the  land 
at  the  time  of  the  breach/ 

938,  installment  notes;  First  Nat'l  Bank  v.  Agnew,  45  Wis.  131, 
installment  notes. 

3  In  others,  however,  it  is  held  the  fact  that  a  promissory  note  is  given 

for  an  installment,  or  for  the  full  price,  is  immaterial,  as  between  the 
parties,  as  the  same  rule  obtains  whether  the  promise  to  pay  is  con- 
tained in  a  note  or  in  the  executory  agreement,  a  previous  tender  of  a 
deed  by  the  vendor  being  necessary,  Ewing  v.  Wightman,  167  N.  Y. 
107,  60  N.  E.  322;  see  Northwestern  National  Bank  v.  Eamsey,  96 
Wis.  544,  71  N.  W.  939;  Underwood  v.  Tew,  7  Wash.  297,  34  P.  1100, 
waiver  by  not  timely  suing;  also  Lumaghi  v.  Abt,  126  Mo.  App.  221, 
103  S.  W.  104,  note  given  for  option;  Pursley  v.  Good,  94  Mo.  App. 
382,  68  S.  W.  218,  option. 

4  Prichard  v.  Mulhall,  127  Iowa  545,  103  N.  W.  774,  4  Ann.  Cas.  789. 

1  Old  Colony  R.  Corp.  v.  Evans,  72  Mass.  (6  Gray)  25,  66  Am.  Dee.  394; 
Hogan  ▼.  Kyle,  7  Wash.  595,  35  P.  399,  38  A.  S.  R.  910;  Smith  v. 
Newell,  37  Fla.  147,  20  So.  249;  Porter  v.  Travis,  40  Ind.  556,  when 
deed  should  have  been  delivered  if  at  that  time  there  was  any  decrease 
in  value ;  Allen  v.  Mohn,  86  Mich.  328,  49  N.  W.  52,  24  A.  S.  R.  126, 
at  time  of  abandonment ;  Grizwold  v.  Sabin,  51  N.  H.  167  12  Am. 
Rep.  76;  Harmon  v.  Thompson,  119  Ky.  528,  84  S.  W.  569,  27  Ky.  L. 
Eep.  181,  interest;  Carter  v.  Reaume,  159  Mich.  160,  123  N.  W.  539, 
where  assignee  of  vendor  sues;  Wilson  v.  Hoy,  120  Minn.  451, 
139  N.  W.  817,  not  difference  between  price  and  cost  of  property  to 


§  1117  LAW  OF  OPTION   CONTRACTS  524 

Where  payments  have  been  made  on  account  of 
the  price,  in  determining  the  damages,  the  pay- 
ments must  be  deducted  from  the  price,  and  it  is 
the  excess,  if  any,  of  the  balance  of  the  unpaid 
price  and  interest,  over  the  value  of  the  land,  that 
is  recoverable  as  damages.^ 

It  will  be  seen,  therefore,  that  in  iliose  jurisdic- 
tions where  the  above  rule  is  exclusive,  there  may 
not  be  an  action  at  law  to  recover  the  price,  as  such, 
and  that,  consequently,  the  sole  remedy  of  the 
vendor  for  breach  by  the  vendee,  is  a  suit  at  law  to 
recover  damages  in  accordance  with  the  rule  above 
^ated,  and  further,  that  if  the  vendor  desires  to 
recover  the  price  he  must  resort  to  a  suit  in  the 
nature  of  one  for  specific  performance. 

vendor;  Baerenklau  v.  Peerless  Eealty  Co.,  80  N.  J.  Eq.  26,  83  Atl. 
375,  no  damages  if  land  has  increased  in  value  j  Burnham  v.  Eoberts, 
70  m.  19. 

1  Of  course  the  vendor  may  also  sue  and  recover  for  breach   of  the 

various  stipulations  of  the  contract,  such  as  one  providing  for  pay- 
ment of  the  taxes  by  the  vendee,  Preble  v.  Baldwin,  60  Mass.  (6 
Gush.)  549;  Prichard  v.  Mulhall,  127  Iowa  545,  103  N.  W.  774, 
4  Ann.  Cas.  789. 

2  Less  payments  made,  Ellet  v.  Paxson,  2  Watts  &  S.  (Pa.)  418. 

Where  value  exceeds  price,  only  nominal  damages,  Evrit  v.  Bancroft, 
22  Ohio  St.  172 ;  Hurd  v.  Dunsmore,  63  N.  H.  171 ;  Brooks  v.  Miller, 
103  Ga.  712,  30  S.  E.  630. 
Rule  as  to  damages  where  the  optionor  having  only  an  option,  sells  the 
optioned  land  to  a  third  party  having  notice  of  the  terms  of  his 
option  and  who  defaults.  Roper  v.  Milbourn,  93  Neb.  809,  142  N.  W, 
792,  Ann.  Cas.  1914B,  1225.  In  this  action  the  complaint  alleged  as 
damages  the  excess  in  price  on  1000  acres  (of  the  1600  acres  under 
plaintiff's  option  from  the  owner)  sold  to  defendant,  over  the  price 
under  plaintiff's  option  from  the  owner,  and  also  the  loss  resulting 
to  plaintiff  from  his  inability  to  carry  out  his  option  from  the 
owner  and  purchase  the  remaining  600  acres,  and  certain  other  special 
damages.  The  court  held  such  damages,  under  the  circumstances, 
within  the  contemplation  of  the  parties.  See  Naylor  v.  Parker,  (Tex. 
Civ.  App.)  139  S.  W.  93;  Arentsen  v.  Moreland,  122  Wis.  167,  99 
N.  W.  790,  106  A.  S.  R.  961,  65  L.  R.  A.  973,  2  Ann.  Cas.  628; 
Boyden  v.  Hill,  198  Mass.  477,  85  N.  E.  413. 


525  REMEDIES  OP  PURCHASER  FOR  DAMAGES  §  1118 

Sec.  1118.  ACTION  BY  PURCHASER  FOR 
DAMAGES  UNDER  BILATERAL  CON- 
TRACT. RULE  OF  DAMAGES.— As  noted  in  a 
former  section,  upon  breach  of  the  contract  to  con- 
vey by  the  vendor,  the  purchaser  has  the  following- 
remedies,  namely:  (a)  An  action  for  damages  for 
the  breach;  (b)  an  action  to  recover  back  the  pur- 
chase money  paid,  or,  (c)  a  suit  for  specific  enforce- 
ment of  the  contract. 

The  next  chapter  is  devoted  to  the  presentation 
of  the  subject  of  specific  performance.  As  to  the 
other  remedies,  it  should  be  observed  the  purchaser, 
as  well  as  the  vendor,  is  put  to  his  election.  An 
action  at  law  for  damages  and  also  a  suit  for  specific 
performance  of  the  contract,  are  based  upon  the 
contract,  while  a  suit  to  recover  the  purchase  money 
paid,  is  in  disaffirmance,  or  rescission,  of  the  con- 
tract. 

Upon  breach  by  the  vendor,  the  purchaser  is 
entitled  to  nominal  damages,  in  any  event,  and,  in 
certain  jurisdictions,  to  compensatory  damages  for 
loss,  or  injury,  sustained  by  him  as  the  result  of 
the  breach,  but  not,  of  coui'se,  to  speculative  or 
remote  damages.^ 

1  Location  of  manufacturing  plant  in  town  in  which  lots  sold  were  sit- 
uated, Ansley  v.  Bank  of  Piedmont,  113  Ala.  467,  21  So.  59,  59 
A.  S.  R.  122;  land  subdivision,  Dady  v.  Condit,  209  HI.  488,  70  N.  E. 
1088;  loss  from  re-sale,  Lynch  v.  Wright,  94  Fed.  703;  Naylor  v. 
Parker,  (Tex.  Civ.  App.)  139  S.  W.  93,  under  option;  boom  prices, 
Carbondale  Inv.  Co.  v.  Burdick,  58  Kan.  517,  50  P.  442;  Houston  etc. 
E.  Co.  V.  Wright,  15  Tex.  Civ.  App.  151,  38  S.  W.  836,  loss  of  pay- 
ments; Sixta  V.  Land  Co.,  157  Wis.  293,  147  N.  W.  1042,  profits  from 
sales. 

Purchaser  can  not  recover  for  loss  of  profits  on  re-sale  where  he  told 
vendor,  on  election  to  purchase,  he  had  sold  the  property  without 
profit,  Smith  v.  Cauthen,  98  Miss.  746,  54  So.  844. 

Profits  from  hotel  business,  option  to  renew  lease,  Neal  v.  Jefferson, 
212  Mass.  517,  99  N.  E.  334,  Ann.  Gas.  1913D,  205. 


V 


§  1118  LAW  OF  OPTION  CONTRACTS  526 

The  English  rule  is  that  the  purchaser,  upon 
breach  by  the  vendor,  is  entitled  to  a  return  of  the 
purchase  money  paid  with  interest  and  expenses 
incurred  in  investigating  the  title,  but  nothing  for 
loss  of  his  bargain,  unless  there  is  bad  faith  on  the 
part  of  the  vendor  in  refusing  to  convey.^  This  rule 
is  followed  in  several  states.^  In  other  states,  the 
vendee  is  entitled  to  recover  for  loss  of  his  bargain 
and  other  special  damages  irrespective  of  the  good 
or  bad  faith  of  the  vendor.* 

2  Engell  V.  Fitch,  L.  R.  4  Q.  B.  659,  38  L.  J,  Q.  B.  304,  17  Wkly.  Rep. 

894;  Jones  v.  Gardiner,  1  Ch.  191,  71  L.  J.  Ch.  93,  86  L-  T.  Rep. 
(N.  S.)  74,  50  Wkly.  Rep.  265. 
Bad  faith  exists  where  the  vendor's  breach  of  contract  "results,  not 
from  his  misfortune  in  proving  to  be  not  entitled  to  the  land  of  which 
he  believed  himself  to  be  the  owner,  but  from  his  misconduct,  or 
!  from  his  undue  precipitancy,  as,  for  example,  when  he  had  subse- 
quently conveyed  to  another  person  or  where  he  had  entered  into 
another  contract  to  sell  before  he  had  himself  acquired  title  to  the 
land,"  Stuart  v.  Pennis,  100  Va.  612,  42  S.  E.  667. 

3  See  Smith  v.  Bangham,  156  Cal.  359,  104  P.  698,  28  L.  R.  A.  (N.  S.) 

522;  Smith  v.  Newell,  37  Fla.  147,  20  So.  249;  Dal.  v.  Fischer,  20 
S.  D.  426,  107  N.  W.  534;  Stuart  v.  Pennis,  100  Va.  613,  42  S.  E. 
667 ;  Marsh  v.  Cavanaugh,  15  Wash.  282,  46  P.  239,  money  paid  with 
interest;  Eggert  v.  Pratt,  126  Iowa  727,  102  N.  W.  786;  Tracy  v. 
Gunn,  29  Kan.  508;  Horner  v.  Beasley,  105  Md.  193,  65  Atl.  820, 
money  paid  with  interest;  Hammond  v.  Hannin,  21  Mich.  374, 
4  Am.  Rep.  490;  Welch  v.  Lawson,  32  Miss.  170,  66  Am.  Dec.  606; 
Scherck  v.  Moyse,  94  Miss.  259,  48  So.  513;  Pumpelly  v.  Phelps,  40 
N.  Y.  59,  100  Am.  Dec.  463 ;  Margraf  v.  Muir,  57  N.  Y.  155 ;  Brown  v. 
Honiss,  70  N.  J.  L.  260,  58  Atl.  86,  s.  c.  74  N.  J.  L.  501,  68  Atl.  150, 
option  in  lease,  refusal;  Thompson  v.  Sheplar,  72  Pa.  160;  Gray  v. 
Howell,  205  Pa.  211,  54  Atl.  774;  Phillips  v.  Herndon,  78  Tex.  378, 
14  S.  W.  857,  22  A.  S.  R.  59;  Mullen  v.  Cook,  69  W.  Va.  456,  71  S.  E. 
566;  Ross  v.  Saylor,  39  Mont.  559,  104  P.  864;  Young's  Ex'r  v. 
Singleton,  29  Ky.  316 ;  Kempner  v.  Cohn,  47  Ark.  519,  1  S.  W.  869, 
58  Am.  Rep.  775;  Mobley  v.  Lott,  127  Ga.  572,  56  S.  E.  637. 

4  Doherty  v.  Dolan,  65  Me.  87,  20  Am.  Rep.  677 ;  Roche  v.  Smith,  176  Mass. 

595,  58  N.  E.  152,  51  L.  R.  A.  510 ;  Boyden  v.  HiU,  198  Mass.  477, 
85  N.  E,  413,  option;  Atwood  v.  Walker,  179  Mass.  514,  61  N.  E. 
58,  following  New  York  rule  because  contract  made  in  New  York; 
Vallentyne  v.  Land  Co.,  95  Minn.  195,  103  N.  W.  1028,  5  Ann.  Gas. 


527  REMEDIES  OF  PURCHASER  FOR  DAMAGES  §  1118 

Damages  for  loss  of  the  bargain  are  the  same 
under  this  rule  as  under  the  English  rule  where 
there  has  been  bad  faith  on  the  part  of  the  vendor, 
and  includes  the  excess,  if  any,  of  the  market  value 
of  the  land,  at  the  time  of  breach  of  the  contract, 
over  the  price  agreed  to  be  paid,^  with  interest^  if 
the  vendor  retains  possession,'^  together  with 
expenses  of  investigating  title  and  preparing  to 
enter  upon  the  land.  Where  payments  have  been 
made  on  the  price,  and  the  vendor  refuses  to  convey, 
the  damages  are  sometimes  stated  to  be  the  value 
of  the  land  agreed  to  be  conveyed  at  the  time  of 
breach,  less  the  unpaid  purchase  price.  ^ 

212;  Seheerschmidt  v.  Smith,  74  Minn.  224,  77  N.  W.  34;  Matheny 
V.  Stewart,  108  Mo.  73,  17  S.  W.  1014,  covenant  of  warranty;  Beetem 
V.  FoUmer,  87  Neb.  514,  127  N.  W.  858;  Walshe  v.  Endom,  129  La. 
148,  55  So.  744,  option;  Dunshee  v.  Geoghegan,  7  Utah  113,  25  P. 
731;  Arentsen  v.  Moreland,  122  Wis.  167,  99  N.  W.  790,  106  A.  S.  R. 
951,  65  L.  R.  A.  973,  2  Ann.  Gas.  628;  Brink  v.  Mitchell,  135  Wis. 
416,  116  N.  W.  16,  option,  sale  by  optionor  to  third  person;  Hartzell 
V.  Crumb,  90  Mo.  629,  3  S.  W.  59. 

6  HartzeU  v.  Crumb,  90  Mo.  629,  3  S.  W.  59 ;  excess  payment  on  price, 
Kean  v.  Laudram,  72  S.  C.  556,  52  S.  E.  421;  liquidated  damages, 
Chapman  v.  Propp,  (Minn.)  147  N.  W.  442;  Brooks  v.  Miller,  103 
Gra.  712,  30  S.  E.  630,  nominal  damages  only  if  market  value  not 
greater  than  contract  price. 

6  Smith  V.  Lander,  (Tex.  Civ.  App.)  89  S.  W.  19. 

In  New  York  interest  is  not  recoverable  unless  the  land  has  an  estab- 
lished market  value,  or  unless  the  value  can  be  ascertained  by  com- 
putation, the  theory  being  that  otherwise  the  damages  are  unliqui- 
dated, Sloan  V.  Baird,  162  N.  Y.  327,  56  N.  E.  752;  Worrall  v. 
Munn,  53  N.  Y.  185;  but  not  costs  and  attorney's  fees  in  unsuc- 
cessfully seeking  to  compel  specific  performance,  nor  for  rent  paid 
after  exercise  of  option,  Walshe  v.  Endom,  129  La.  148,  55  So.  744. 

T  Kicks  V.  State  Bank,  12  N.  D.  576,  98  N.  W.  408. 

8  Neppach  v.  Oregon  etc.  R.  Co.,  46  Ore.  374,  80  P.  482,  7  Ann.  Cas.  1035; 
Mullen  v.  Cook,  69  W.  Va.  456,  71  S.  E.  566;  Hallett  v.  Taylor,  177 
Mass.  6,  58  N.  E.  154. 


§  1119  LAW   OP    OPTION   CONTRACTS  528 

Sec.  1119.  REMEDIES  FOR  BREACH  OF 
BILATERAL  AGREEMENT.  PERSONAL 
PROPERTY.  RULES  OF  DA^IAGES.— Where 
tlie  title  to  the  goods  has  not  passed  and  the  buyer 
refuses  to  accept  and  pay,  the  remedy  of  the  seller 
is  an  action  for  damages  for  non-acceptance/  or, 
after  a  resale  by  him,  an  action  to  recover  the  excess 
of  the  contract  price  over  the  price  obtained  on  the 
resale.^ 

The  damages  recoverable  in  the  former  action, 
when  the  property  has  a  market  value,  are  gener- 
ally the  difference  between  the  contract  price  and 
the  market  price  at  the  time  and  place  of  delivery.' 

1  Henry  H.  Schott  Co.  v.  Stone,  Fisher  &  Lane,  35  Wash.  252,  77  P.  192; 
American  Cotton  Co.  v.  Herring,  84  Miss.  693,  37  So.  117. 

2CuthiU  V.  Peabody,  19  Cal.  App.  304,  125  P.  926;  Redhead  Bros.  y. 
Wyoming  Cattle  Inv.  Co.,  126  Iowa  410,  102  N.  W.  144;  Gehl  v.  Mil- 
waukee Produce  Co.,  116  Wis.  263,  93  N.  W.  26;  Daniels  v.  Morris, 
65  Ore.  289,  132  P.  958;  Dudley  A.  Tyng  &  Co.  v.  Woodward,  121 
Md.  422,  88  Atl.  243;  Mason  v.  Decker,  72  N.  Y.  595,  28  Am.  Rep. 
190. 
As  to  notice  of  intenlion  to  re-sell,  see  Van  Brocklen  v.  Smeallie,  140 
N.  Y.  70,  75,  35  N.  E.  415;  Rea  v.  Holland,  48  Mich.  218,  12  N.  W. 
167;  American  Hide  &  L.  Co.  v.  Chalkley  &  Co.,  101  Va.  458.  44  S.  E. 
705 ;  Pratt  v.  S.  Freman  &  Sons  Mfg.  Co.,  115  Wis.  648,  92  N.  W. 
368. 

8  Nelson  v.  Hirschberg,  70  Ark.  39,  66  S.  W.  347 ;  Scribner  v.  Schenkel, 
128  Cal.  250,  60  P.  860 ;  Dwiggins  v,  Clark,  94  Ind.  49,  48  Am.  Rep. 
140;  Bell  v.  Hatfield,  121  Ky.  560,  89  S.  W.  544,  72  L.  R.  A.  (N.  S.) 
529;  Peters  v.  Cooper,  95  Mich.  191,  54  N.  W.  694;  Art-Aseptible 
Furniture  Co.  v.  Shannon,  159  Iowa  225,  140  N.  W.  358;  F,  W. 
Stock  &  Sons  V.  Snell,  213  Mass.  449,  100  N.  E,  830. 

When  the  goods  are  worth  more  than  the  purchase  price  the  seller  is 
entitled  to  nominal  damages  only,  McCrea  v.  Ford,  24  Colo.  App. 
506,  135  P.  465. 

When  no  market  value,  or  goods  are  to  be  manufactured,  Baessetti  v. 
Shenango  Furnace  Co.,  122  Minn.  335,  142  N.  W.  322;  George  J. 
Cook  Co.  ▼.  Hell,  175  HI.  App.  532;  Thomas  Gordon  Malting  Co.  v. 
Bartels  Brewing  Co.,  206  N.  Y.  528,  100  N.  E.  461 ;  Smoothing  Iron 
Heating  Co.  t.  Blakely,  94  S.  C.  224,  77  S.  E.  945,  storage,  insur- 


529  REMEDIES — PERSONAL  PROPERTY  §  1119 

Where  tlie  title  to  the  goods  has  passed  to  the 
buyer  and  he  neglects  or  refuses  to  pay  for  them 
according  to  the  terms  of  the  contract,  the  seller 
may  sue  for  and  recover  the  price  of  the  goods/ 
Otherwise,  as  a  general  rule,  he  may  recover  dam- 
ages only.^ 

ance,  and  loss  of  profits;  Bond  v.  Bourke,  54  Colo.  51,  129  P.  223, 
43  L.  R.  A.  (N.  S.)  97. 

4  01eese  v.  Mobile  Fruit  Co.,  211  Dl.  539,  71  N.  E.  1084;  American  Hide 
&  L.  Co.  V.  Chalkley  &  Co.,  101  Va.  458,  44  S.  E.  705;  Hamilton  v. 
Finnegan,  117  Iowa  623,  91  N.  W.  1039;  Obery  v.  Lander,  179  Mass. 
125,  60  N.  E.  378. 

6  John  Deere  Plow  Co.  v.  Gorman,  9  Kan.  App.  675,  59  P.  177;  McCor- 
mick  H.  Mach.  Co.  v.  Balfany,  78  Minn.  370,  81  N.  W.  10,  79  A.  S.  R. 
393 ;  Greenleaf  v.  Hamilton,  94  Me.  118,  46  Atl.  798 ;  Cuthill  v.  Pea- 
body,  19  Cal.  App.  304,  125  P.  926;  Hamilton  v.  Finnegan,  117  Iowa 
623,  91  N.  W.  1039. 

Where  the  price  is  payable  at  a  fixed  date,  irrespective  of  the  date  of 
delivery,  an  action  mil  lie  to  recover  the  price,  though  the  property 
in  the  goods  has  not  passed,  Sherman  Nursery  Co.  v.  Aughenbaugh, 
93  Mass.  201,  100  N.  W.  1101. 

Shearer  v.  Jewett,  31  Mass.  232,  case  where  buyer  had  option  to  pay 
for  grain  in  kind  or  in  money  and  sold  all  the  grain.  Held  liable  for 
the  price  of  all  the  grain  furnished. 

The  decisions  exhibit  the  same  conflict  here  as  with  reference  to  the 
recovery  of  the  price  for  land.  For  instance,  the  seller  may  store 
and  retain  the  goods  for  the  buyer's  benefit  and  recover  the  contract 
price,  Habeler  v.  Rogers,  131  Fed.  43,  65  C.  C.  A.  281.  So  where  he 
fully  performs,  Shipps  v.  Atkinson,  8  Ind.  App.  505,  36  N.  E.  375; 
Obery  v.  Lander,  179  Mass.  125,  60  N.  E.  378;  American  Cotton  Co. 
V.  Herring,  84  Miss.  693,  37  So.  117;  Henry  H.  Schott  Co.  v.  Stone, 
Fisher  &  Lane,  35  Wash.  252,  77  P.  192,  rule  applied  to  stock  of 
goods  and  lease  of  store. 

On  the  other  hand,  it  is  held  there  must  be  such  a  delivery  as  will 
pass  the  title  and  vest  the  ownership  of  the  goods,  Thomas  D.  Mur- 
phy Co.  V.  Exchange  Fat.  Bank,  76  Neb.  573,  107  N.  W.  845 ;  Shipps 
V.  Atkinson,  supra. 

Where  delivery  is  tendered  and  refused,  the  only  remedy  is  for  dam- 
ages, Greenleaf  v.  Gallagher,  93  Me.  549,  45  Atl.  829,  74  A.  S.  R.  371. 

Where  title  is  reserved  and  seller  takes  possession  and  sues  to  recover 
balance  of  installments,  Edward  Thompson  Co.  v.  Murphine,  79  Wash. 
672,  140  P.  1073. 

34 — Option  Contracts. 


§  1119  LAW    OF    OPTION    CONTRACTS  530 

If  the  seller  neglects,  or  refuses  to  deliver  the 
goods  to  the  buyer,  the  buyer  may  sue  for  and 
recover  damages  for  non-delivery.® 

In  such  cases  the  damages  recoverable  are  the 
loss  directly  and  naturally  resulting  from  the 
breach,  and  where  there  is  a  market  price  for  the 
goods,  the  amount  recoverable,  as  damages,  is  the 
difference  between  the  contract  price  and  the  mar- 
ket value  of  the  goods  at  the  time  and  place  of 
delivery/ 

When  the  breach  consists  in  preventing  perform- 
ance of  the  contract,  without  fault  of  the  other 
party,  who  is  willing  to  perform,  the  prospective 
damages  which  the  latter  can  recover  consists  of 
(a)  what  he  has  already  expended  towards  per- 
formance, and  (b)  the  profits  which  he  would  have 

B  Option  to  return  stock  under  agreement  of  vendor  to  re-purchase,  vendee 
entitled  to  recover  price  and  is  not  limited  to  diiference  between 
market  value  and  price,  Echternach  v.  Moncrief,  94  Kan.  754,  147 
P.  860. 
Acme  Food  Co.  v.  Older,  64  W.  Va.  255,  61  S.  E.  235,  17  L.  K.  A.  (N.  S.) 
807,  to  the  effect  that  there  may  be  an  executed  contract  passing 
title  without  delivery  of  possession,  in  which  case  a  contract  for 
goods  bargained  and  sold  is  good,  because  the  contract  is  completed 
and  the  seller  can  therefore  recover  the  price. 

«  Arnold  v.  Blabon,  147  Pa.  372,  23  Atl.  575 ;  Ellis  v.  Miller,  164  N.  Y. 
434,  58  N.  E.  516. 
Rule  where  stock  is  held  by  broker  subject  to  option  and  broker  sells 
stock  on  declining  market,  Wiggin  y.  Federal  Stock  &  Grain  Co., 
77  Conn.  507,  59  Atl.  607. 

7  Reeves  &  Co.  v.  Cress,  80  Minn.  466,  83  N.  W.  443;  Coxe  v.  Anoka 
W.  E.  L.  &  P.  Co.,  87  Minn.  56,  91  N.  W.  265;  Loewi  v.  Long,  76 
Wash.  480,  136  P.  673;  Heard  &  Lee  v.  Heard,  (Ala.)  61  So.  343; 
Chandler  Grain  &  Milling  Co.  v.  Shea,  213  Mass.  398,  100  N.  E.  663; 
Patterson  v.  Plummer,  10  N.  D.  95,  86  N.  W.  111. 
When  no  market  price  at  place  of  delivery,  Righter  v.  Clark,  78  Conn. 
9,  60  Atl.  741,  112  A.  S.  R.  84;  Coxe  v.  Anoka  etc.  Co.,  supra; 
see,  also,  Connersville  W.  Co.  v.  McFarlan  C.  Co.,  166  Ind.  123, 
76  N.  E.  294,  and  Righter  v.  Clark,  supra. 


531  REMEDIES — PLEADING  §  1120 

realized  by  performance.^  But  profits  can  not 
always  be  recovered ;  they  may  be  too  remote  and 
speculative  in  their  character,  and,  therefore,  inca- 
pable of  that  clear  and  definite  proof  which  the  law 
requires.  When  not  fully  proven,  or  when  too 
remote,  the  true  measure  is  the  loss  of  outlay  and 
expense.® 

Sec.  1120.  PLEADING.— In  an  action  to 
recover  damages  for  a  landlord's  failure  to  perform 
an  agreement  to  lease,  plaintiff  is  bound  to  allege 
an  election  and  notice.^ 

Under  an  option  by  which  the  defendant  agreed 
to  pin-chase  plaintiff's  share  in  certain  mining 
claims  bought  by  him,  at  the  actual  amount  of  cash 
expended  therefor,  in  a  suit  by  plaintiff  against 
defendant  to  recover  damages,  it  is  necessary  to 
aUege  in  the  complaint,  not  only  plaintiff's  election 
under  the  option,  but  also  a  tender  of  performance 
by  plaintiff,  the  covenants  being  mutual  and  depen- 
dent, and,  in  such  case,  the  rule  is  that  neither  party 
can  sue  at  law  for  breach  until  he  has  put  the  other 
party  in  default  by  tendering  performance,  and  an 
offer  to  perform  made  in  the  pleadings,  or  at  the 
trial,  is  not  sufficient.^ 

8  Schlieder  v.  Dielman,  44  La.  Ann.  462,  10  So.  934. 

9  Schlieder  v.  Dielman,  supra,  citing  and  quoting  from  United  States  v. 

Behan,  110  U.  S.  338,  28  L.  Ed.  168,  4  S.  Ct.  81. 

iLoeffler  v.  Wright,  13  Cal.  App.  224,  109  P.  269;  see  Harle  v.  Haggin, 
116  N.  Y.  S.  51,  131  App.  Div.  7' 2. 
It  is  not  necessary  to  allege  that  the  contract  is  supported  by  a  con- 
sideration in  those  jurisdictions  where  the  written  contract  imports  a 
consideration,  CuthiU  v.  Peabody,  19  Cal.  App.  304,  125  P.  926. 

a  Delaware  Trust  Co.  v.  Calm,  195  N.  Y.  231,  88  N.  E.  53. 


§  1121  LAW  OF  OPTION   CONTRACTS  532 

But  it  is  not  necessary  to  allege  a  tender  when 
the  defendant  has  placed  himself  in  a  position 
where  it  can  readily  be  seen  that  he  can  not  comply 
with  the  contract,  or  where  he  absolutely  repudiates 
it  by  denying  its  existence.  Therefore,  a  complaint 
for  breach  of  contract  to  sell  under  an  option  agree- 
ment, alleging  the  option,  plaintiff's  timely  election 
to  purchase  the  land,  and  its  value,  and  defendant's 
refusal  to  comply  with  the  option,  and  the  sale  by 
him  of  the  land,  before  the  expiration  of  the  time 
limit,  is  sufficient  without  alleging  what  plaintiff 
did  in  the  way  of  tender.'  But,  to  excuse  tender, 
the  refusal  must  be  absolute  and  final.* 

The  general  rule  that  an  allegation  of  tender  is 
necessary  applies  to  an  option  giving  the  purchaser 
the  privilege  of  returning  the  shares  of  stock  in  a 
corporation,  within  the  time  and  upon  the  condition 
fixed  by  the  option.  In  such  case,  there  is  no  obliga- 
tion on  the  part  of  the  seller  to  re-purchase  the 
shares  until  the  purchaser  exercises  his  right  to 
return  and  tenders  back  the  shares,  and  demands 
repayment.^ 

Sec.  1121.  PRACTICE.— An  action  by  an 
assignor  to  recover  the  consideration  paid  for  an 
option  is  not  affected  by  the  Statute  of  Frauds,  the 
contract  being  executed  and  the  consideration  alone 
remaining  unpaid.^ 

3  Palmer  y.  Clark,  52  Wash.  345,  100  P.  749. 

4  Beiseker  v.  Amberson,  17  N.  D.  215,  116  N.  W.  94. 

6  Bovee  v.  Boyle,  25  Colo.  App.  165,  136  P.  467 ;  see  Pursley  v.  Good, 
94  Mo.  App.  382,  68  S.  W.  218,  tender  of  deed  under  option  to 
repurchase. 

1  Landon  v.  Morehead,  34  Okl  701,  126  P.  1027. 


533  REMEDIES — EVIDENCE  §  1122 

When  the  option  was  intended  for  a  third  party 
and  so  recites,  the  optionee  may  sue  and  recover  in 
his  own  name  for  the  benefit  of  the  third  party  the 
same  damages  as  the  third  party  would  have  recov- 
ered.^ 

An  escrow  holder  of  stock  may  interplead  the 
optionor  and  optionee  if  they  make  conflicting 
claims.^ 

Where  plaintiff  sued  to  recover  for  breach  of  a 
contract  to  sell  real  estate  to  him,  on  which  he  had 
paid  $20  of  the  purchase  price,  and  defendant 
alleged  the  agreement  was  merely  an  option,  plain- 
tiff is  not  entitled  to  recover  the  $20  on  defendant's 
theory  of  the  contract,  since  he  must  recover  on  his 
own  theory,  or  not  at  all/ 

A  complaint  to  recover  payments  made  on  a  land 
option,  in  form  for  money  had  and  received,  can 
not  be  so  treated  when  plaintiff's  reply  alleges  that 
the  option  had  not  "ceased  and  determined."* 

Sec.  1122.  EVIDENCE.— Evidence  as  to  value 
of  the  optioned  property  and  its  increase  in 
value  during  the  ten  years  preceding  the  trial,  and 
the  reasons  for  such  increase,  is  admissible;  evi- 
dence as  to  what  plaintiff  might  have  obtained  from 
other  parties  for  the  option  is  immaterial;  where 

2  Boyden  v.  Hill,  198  Mass.  477,  85  N.  E.  413. 

3  Walker  v.  Bamberger,  17  Utah  239,  54  P.  108. 

Bill  by  optionee  to  discover  who  purchaser  is  under  option  permitting 
optionee  to  purchase  on  as  favorable  terms  as  offered  by  any  other 
person,  Taylor  &  McCoy  Coal  &  Coke  Co.  v.  Hartman,  222  Pa.  172, 
70  Atl.  1001. 

4  Catterline  v.  Bush,  39  Ore.  496,  65  P.  1064. 

r.  Ouigley  v.  King,  182  Mo.  App.  196,  168  S.  W.  285. 


§  1122  LAW  OP  OPTION   CONTRACTS  534 

defendants  liad  obtained  a  lease  under  the  option, 
the  figure  at  which  defendants  held  the  lease  is 
admissible  to  prove  the  value  of  the  option;  evi- 
dence as  to  whether  plaintiff  paid  anything  for  the 
option  is  immaterial ;  also  whether  the  owner  of  the 
land  had  previously  given  an  option  for  its  pur- 
chase for  a  less  amount ;  also  as  to  the  reason  why 
the  owner  extended  the  option  for  one  year;  and 
also  of  statements  by  plaintiff  to  the  owner  when  he 
obtained  an  extension  of  the  option  from  the 
owner/  It  is  not  proper  to  allow  a  real  estate 
expert  to  testify  whether  he  had  ever  known  of  an 
option  being  sold  for  a  considerable  sum,  such  testi- 
mony being  immaterial  and  tending  to  open  up 
collateral  issues.^ 

Where  the  purchaser  refuses  to  accept  the  prop- 
erty and  it  is  resold,  after  notice  to  him,  for  the 
highest  price  reasonably  obtainable,  the  price  on 
resale  is  prima  facie  evidence  of  its  market  value.' 

Plaintiff's  right  to  recover  back  money  paid  on 
a  land  option,  or  damages  based  on  the  increased 
value  of  the  land,  is  conditioned  on  his  alleging  and 
proving  readiness  and  willingness  to  perform  and 
refusal  of  the  defendant  to  make  a  deed.* 

.  Under  an  option  to  purchase  land  at  a  price  to 
be  agreed  on,  the  price  at  which  the  land  had  been 
bought  at  a  sale  on  execution  against  the  owner  is 

1  Eastman  v.  Dunn,  34  R.  I.  416,  83  Atl.  1057. 

2  Eastman  v.  Dunn,  supra. 

3  First  M.  E.  Church  v.  North,  92  Kan.  381,  140  P.  888. 

4  Quigley  v.  King,  182  Mo.  App.  196,  168  S.  W.  285. 


535  REMEDIES — EJECTMENT  §  1123 

not  a  fair  criterion  of  the  price  at  wMch  the 
optionee  should  purchase  from  the  owner  at  such 
sale.^ 

Sec.  1123.  EJECTMENT.— Where  the  optionee 
is  given  possession  and  defaults,  the  optionor  has 
his  remedy  in  ejectment  to  dispossess  the  optionee.^ 
With  reference  to  an  option  contained  in  leases,  the 
lessee  (optionee),  not  being  in  default  under  the 
lease,  is  entitled  to  possession  during  the  leasehold 
term  by  virtue  of  that  instrument  and  may  not, 
therefore,  be  dispossessed  though  in  default  under 
the  terms  of  the  option  contract,^  the  two  contracts 
ordinarily  being  separate  and  distinct.^  On  the 
other  hand,  if  the  lessee  defaults  in  his  lease,  he  is 
not  entitled  to  remain  in  possession  as  against  the 
lessor  by  virtue  of  his  option  to  purchase,*  unless 
the  option  contract  gives  him  possession,^  or  unless, 
acting  under  the  option  as  distinguished  from  the 
lease,  there  have  arisen  grounds  for  invoking  the 
rule  of  estoppel  against  the  optionor.^    It  would 

5  Manning  v.  Ayers,  77  Fed.  690,  23  C.  C.  A.  405 ;  evidence  held  to  sustain 

findings  revoking  option,  Hay  v.  Mason,  141  Cal.  722,  75  P.  300. 
Evidence  not  sufficient  to  sustain  finding  there  was  no  surrender  of 

option,  K.  P.  Min.  Co.  v.  Jacobson,  30  Utah  115,  83  P.  728,  4  L.  R.  A. 

(N.  S.)   755. 
Further  as  to  evidence,  see  Sec.  1253. 

1  See  Conway  v.  Hart,  129  Cal.  480,  62  P.  44. 

2  Brown  v.  Larry,  153  Ala.  452,  44  So.  841. 

3  Mathews  Slate  Co.  v.  New  Empire  Slate  Co.,  122  Fed.  972 ;  see  Brown  ▼. 

Larry,  153  Ala.  452,  44  So.  841. 

4  See  King  v.  Maxey,  (Tex.  Civ.  App.)  28  S.  W.  401;  Clifford  T.  Gress- 

inger,  96  Ga.  789,  22  S.  E.  399. 

6  Sec.  513. 

cBigler  v.  Baker,  40  Neb.  325,  58  N.  W.  1026,  24  L.  R.  A.  255,  im- 
provements. 


§  1124  LAW  OP  OPTION  CONTRACTS  536 

seem,  however,  that  if  the  optionee  had  duly  elected 
to  purchase,  before  the  ejectment  suit  was  filed,  he 
will  have  a  complete  defense,  in  those  jurisdictions 
where  a  defendant  may  set  up  an  equitable  title  as 
a  defense.'^ 

An  optionee  may  not  maintain  ejectment  against 
the  grantee  of  the  option  during  the  running  of  the 
option  and  before  election,  as  no  title  or  interest  in 
the  property  passes  to  the  optionee.* 

Sec.  1124.  SUIT  TO  QUIET  TITLE 
(REMOVE  CLOUD).— After  the  revocation  of 
the  option,  or  after  the  expiration  of  the  time  limit, 
without  performance,  or  an  o:ffer  to  perform  by  the 
optionee,  the  option  is  a  cloud  on  the  title  and  its 
cancellation  will  be  decreed.^  In  the  case  just  cited, 

7  Parker  v.  Gortatowsky,  127  Ga.  560,  56  S.  E.  846 ;  DeEutte  v.  Muldrow, 

16  Cal.  505,  purchaser  with  notice;   Bogle  v.  Jarvis,  58  Kan.  76, 

48  P.  558. 
«  Young  V.  Latham,  132  Ala.  341,  31  So.  448. 

Not   necessary   for  owner  to   tender   deed   where   optionee   breaches; 

demand  for  possession  not  necessary  under  circumstances;  question 

whether  plaintiff  could  have  conveyed  good  title  immaterial,  Bruschi 

V.  Mining  Co.,  147  Cal.  120,  81  P.  404;  Champion  Gold  M.  Co,  v. 

Champion  Mines,  164  Cal.  205,  128  P.  315,  optionee  in  possession. 
In  Vermont  right  of  optionee  to  purchase  under  option,  can  not  be 

litigated  in  proceedings  in  nature  of  ejectment  by  landlord,  Mack  v. 

Dailey,  67  Vt.  90,  30  Atl.  686. 
Plaintiff  must  rely  upon  the  strength  of  his  own  title  and  not  upon 

the  weakness  of  that  shown  by  defendant,  Bigler  v.  Baker,  40  Neb. 

325,  58  N.  W.  1026,  24  L.  E.  A.  255. 
Eefusal  of  injunction  to  restrain  landlord  from  proceeding  with  warrant 

for  ejectment  of  tenant,  proper   on  facts,   Clifford  v.  Gressinger, 

supra. 

I  BoTst  V.  Simpson,  90  Ala.  373,  7  So.  814;  Larmon  v.  Jordan,  56  HI.  204, 
though  not  recorded  or  accepted  in  time;  Levy  v.  Lyon,  153  Cal.  213, 
94  P.  881,  quiet  title;  Davis  v.  Eiddle,  25  Colo.  App.  162,  136  P.  551, 
oil  option;  see  Hull  v.  Angus,  60  Ore.  95,  118  P.  284. 


537  REMEDIES — SUIT  TO  QUIET  TITLE  §  1124: 

the  court  said  tliat  while  a  court  of  equity  will  not 
intervene  to  remove,  as  a  cloud  on  the  title,  a  deed 
void  on  its  face,  or  when  there  is  a  mere  apprehen- 
sion of  suit,  or  the  mere  assertion  of  a  hostile  title, 
it  will  intervene  where  the  inherent  defect  can  be 
made  apparent  by  extrinsic  evidence  only. 

A  mortgage  executed  by  a  lessee,  luider  a  lease 
giving  him  an  option  to  buy  the  fee,  becomes  a  cloud 
on  lessor's  title  after  the  expiration  of  the  lease, 
where  neither  lessee  nor  mortgagee  offers  to  buy, 
and  the  lessor  rescinds  the  option  by  conveying  the 
fee  after  the  expiration  of  the  lease.^ 

It  is  not  necessary,  where  the  optionee  is  in 
default,  to  return  the  payments  made  for  the 
option,  nor  the  installments  of  the  price  paid.'  But 
it  is  otherwise  where  the  vendor  is  in  default,"*  in 
which  case  he  can  have  a  decree  only  on  condition 
that  he  restores  the  money  paid  by  the  defendant 
on  the  contract. 

Where  the  option  permitted  the  optionees  to  enter 
and  take  possession  upon  the  execution  of  the  con- 
tract, and  retain  possession,  so  long  as  they  com- 
plied with  the  conditions  of  the  option,  their  pos- 
session thereunder  was  a  mere  license  until  they 
performed  the  option  contract,  so  that  their  failure 
to  make  the  first  payment  thereunder  operated  as 
a  surrender  of  their  possession.^  Repudiation  of 
the  contract  by  the  optionee  in  possession  and  his 
refusal  to  pay  the  balance  of  the  price,  entitle  the 

2  McCauley  v.  Coe,  150  HI  311,  37  N.  E.  232. 

3  Merk  v.  Bowery  Mining  Co.,  31  Mont.  298,  78  P.  519. 

4  Benson  v.  Shotwell,  87  Cal.  49,  25  P.  249,  title  not  satisfactory. 

iKingsley  v.  Kressly,  60  Ore.  167,  118  P.  678,  Ann.  Cas.  1913E,  746; 
Cambria  Iron  Co.  v.  Leidy,  226  Pa.  122,  75  Atl.  186. 


§  1125  LAW  OF  OPTION  CONTRACTS  538 

optionor  to  maintain  an  action  to  recover  tlie  prop- 
erty in  the  nature  of  a  suit  to  quiet  title.^ 

The  optionee  who  has  elected  and  paid  the  price 
for  the  land,  may  quiet  title  against  a  purchaser 
with  notice  of  his  option,  though  the  purchaser 
claims  under  a  quitclaim  deed  from  the  optionor.'' 

Sec.  1125.  DETAINER.— F  o  r  c  i  b  1  e  detainer 
does  not  lie  against  a  person  who  has  entered  into 
possession  of  the  premises  under  a  lease  containing 
an  option  to  purchase,  where  he  has  exercised  his 
option  to  purchase,  and  has  complied  with  its 
terms. ^  So,  where  the  lessee  has  the  preference 
right  to  purchase  the  premises,  he  may  successfully 
defend  against  unlawful  detainer  brought  by  the 
lessor,  when  the  lessor  seeks  to  defeat  the  option  by 
a  fraudulent  sale  and  conveyance.^  But  when  the 
lessee  defaults  in  his  lease,  before  the  expiration  of 
the  term,  the  relation  of  landlord  and  tenant  exists 

eBeckman  v.  Waters,  3  Cal.  App,  734,  86  P.  997;  see  Jolliffe  v.  Steele, 
9  Cal.  App.  212,  98  P.  544. 

7  Crowley  v.  Byrne,  71  Wash.  444,  129  P.  113,  option  was  recorded. 

1  Stanwood  v.  Kuhn,  132  111.  App.  466 ;  Washburn  v.  White,  197  Mass. 

540,  84  N.  E.  106;  Sizer  v.  Clark,  116  Wis.  534,  93  N.  W.  529,  cir- 
cumstances excusing  tender ;  Powers  v.  Myers,  25  Okl.  165,  105  P.  674, 
holding  Oklahoma  statute  does  not  authorize  proceeding  by  vendor  to 
recover  possession  from  a  vendee  in  default. 

2  Ogle  V.  Hubbel,  1  Cal.  App.  357,  82  P.  217;  but  not  when  the  price  is 

fixed  and  tender  is  for  a  less  amount,  Bennett  v.  Farkas,  126  Ga.  228, 
54  S.  E.  942,  a  tender  being  necessary  to  the  defense. 

See  Bettens  v.  Hoover,  12  Cal,  App.  313,  107  P.  329,  option  to  renew 
lease;  refusal  to  make  offer  equal  to  that  offered  by  third  person, 
as  provided  in  the  lease,  terminates  right  to  renew.  The  defense  that 
the  offer  of  the  third  person  was  not  bona  fide  must  be  affirmatively 
alleged. 


539  REMEDIES — DETAINER  §  1125 

during  the  life  of  the  lease  and  an  option  in  the 
lease  does  not  constitute  a  defense.^ 

But  ordinarily  the  relation  of  landlord  and  ten- 
ant does  not  arise  from  the  mere  permission  of  the 
optionor  to  the  optionee  to  take  possession.  Conse- 
quently, when  the  optionee  enters  into  possession 
for  the  purpose  of  prospecting  for  minerals,  with 
the  permission  of  the  optionor,  the  optionee  is  in 
possession  as  a  licensee  and  not  as  a  tenant  and,  at 
the  expiration  of  the  option  time,  he  becomes  a 
trespasser  and,  therefore,  the  optionor  is  not 
entitled  to  a  possessory  warrant  under  the  Georgia 
Statute.* 

The  extension  of  an  option  to  purchase  land 
which  did  not  confer  right  of  possession,  does  not 
tend  to  establish  a  right  of  possession.^  Where  the 
optionee  buys  the  fee  he  is  not  estopped  from  deny- 
ing further  title  in  the  optionor.* 

The  optionee  is  liable  for  rent  until  notice  and 
tender,  or  offer  to  pay  the  purchase  money,^  but 
when  the  lease  provides  for  arbitration  of  the  price, 
the  tenant  (optionee)  is  not  liable  for  rent  during 
a  reasonable  time  necessary  to  arbitrate.* 

3  Clifford  V.  Gressinger,  96  Ga.  789,  22  S.  E.  399;  see  Bettens  v.  Hoover, 

12  Cal.  App.  313,  107  P.  329. 

4  Henry  v.  Perry,   110  Ga.  630,  36  S,  E.  87;   see  Frank  v.   Stratford- 

Handcock,  13  Wyo.  37,  77  P.  134,  110  A.  S.  E.  963,  67  L.  E.  A.  571. 

5  Kissack  v.  Bourke,  132  111.  App.  360. 

6  Wade  V.  South  Penn  Oil  Co.,  45  W.  Va.  380,  32  S.  E.  169;  right  to  deny 

title  of  lessor  when  he  is  deprived  of  it  by  operation  of  law,  SpafEord 
V.  Hedges,  231  Dl.  140,  83  N.  E.  129. 

7  Journe  v.  Hewes,  124  Cal.  244,  56  P.  1032. 

8  Washburn  v.  White,  197  Mass.  540,  84  N.  B.  106. 

Sufficiency  of  allegation  of  answer  setting  up  option  as  defense.  Walker 
V.  Edmundson,  111  Ga.  454,  36  S.  E.  800. 


§  1126  LAW  OP  OPTION  CONTRACTS  540 

Sec.  1126.  INJUNCTION.— Specific  enforce- 
ment of  an  agreement  for  the  sale  and  purchase  of 
property,  has  for  its  object  the  securing  of  a  decree 
compelling  the  defendant  to  convey  or  transfer  the 
title  to  the  property  to  plaintiff.  An  injunction  in 
a  proper  case  will  be  granted  to  preserve  the  status 
quo  during  the  pendency  of  the  suit.^  When  the 
subject  of  the  suit  is  land  and  notice  of  action  has 
been  recorded,  it  would  seem  an  injunction  to 
restrain  the  defendant  from  transferring  is  imnec- 
essary  as  a  purchaser  subsequent  to  the  record  of 
the  notice  of  action  would  be  bound  by  the  decree.^ 
In  those  jurisdictions  where  the  lessee-optionee 
may  not,  in  unlawful  detainer  brought  by  the  lessor, 
set  up  his  right  to  renew  the  lease  under  an  option 
therein  by  virtue  of  an  election  so  to  do  properly 
and  seasonably  made,  the  tenant  may  sue  to  enjoin 
the  unlawful  detainer  proceeding  and  to  procure 
the  specific  performance  of  the  covenant  to  renew.^ 
But  a  tenant  under  a  lease  with  option  to  purchase 
is  not  entitled  to  an  injunction  against  summary 
proceedings  by  a  landlord  to  recover  possession  and 

8  Eight  of  tenant  to  possession,  after  termination  of  leasehold  term,  to 
remove  improvements,  etc.,  see  Bodwell  W.  P.  Co.  v.  Old  Town  El. 
Co.,  96  Me.  117,  51  Atl.  802 ;  Franklin  etc.  Co.  v.  Card,  84  Me.  528, 
24  Atl.  960;  also  pending  arbitration  proceedings,  Washburn  ▼. 
White,  197  Mass.  540,  84  N.  E.  106. 

1  Brewer  v.  Sowers,  118  Md.  681,  86  Atl.  228,  against  optionor  selling  and 

mortgagor  foreclosing ;  Weaver  v.  Burr,  31  W.  Va.  736,  8  S.  E.  743, 
3  L.  E.  A.  94,  to  stay  waste;  Geiger  v.  Green,  (Md.)  4  Gill.  472,  the 
bill  must  show  plaintiff  is  entitled  to  specific  performance;  also 
Gelston  v.  Sigmund,  27  Md.  334;  Carnegie  Natural  Gas  Co.  v.  South 
Penn.  Co.,  56  W.  Va.  402,  49  S.  E.  548,  oil  and  gas  lease. 

2  Josey  V.  Perlstein,   (Tex.  Civ.  App.)   107  S.  W.  558. 

8  Blount  v.  Connolly,  110  Mo.  App.  603,  85  S.  W.  605;  Clifford  v.  Gres- 
singer,  96  Ga.  789,  22  S.  E.  399;  see  Pyke  v.  Northwood,  1  Beav.  152, 
17  Eng.  Ch.  152,  48  Eng.  Eeprint  897. 


541  REMEDIES — INJUNCTION  §  1126 

for  rent  in  arrears,  when  the  election  to  purchase 
was  insufficient  because  his  tender  did  not  include 
the  rent  past  due/ 

When  it  appears  from  the  bill  the  agreement 
under  which  an  option  on  mineral  rights  is  claimed 
is  not  mutual  so  that  specific  performance  will  not 
be  decreed  against  the  optionor,  the  optionee  is  not 
entitled  to  an  injunction  to  restrain  the  optionor 
from  selling  the  mineral  rights  to  a  third  person,^ 
and  so  where  the  election  is  conditional,  the 
optionee  is  not  entitled  to  an  injunction  against  the 
optionor  restraining  him  from  changing  the  status 
of  the  title  to  the  land.^ 

Under  a  contract  of  employment  for  theatrical 
services  which  are  special,  unique  and  extraordi- 
nary in  character  and  under  which  the  employee 
stipulates  not  to  perform  similar  services  for  any 
other  person  during  the  contract  time,  and  contain- 
ing an  option  in  favor  of  the  employer  to  renew  or 
extend  the  term  of  ser^dces  for  a  fixed  period  upon 
defi"  He  terms,  and  the  option  has  been  exercised,  a 
court  of  equity  will  enjoin  the  employee  from  per- 
forming for  third  persons  during  the  renewed  or 
extended  term/ 

4  Campbell  v.  Babcoek,  13  N.  T.  S.  843,  26  Abb.  N.  C.  35. 

6  Peacock  v.  Deweese,  73  Ga.  570. 

e  Lamed  v.  Wentworth,  114  Ga.  208,  39  S.  E.  853. 

7  See  Keith  v,  Kellerman,  169  Fed.  196 ;  Canary  v.  Russell,  30  N.  Y.  S. 

122;  88  to  injunction  against  baseball  player,  lee  Sec.  117,  note  12. 


CHAPTER  XII. 

SPECIFIC  PERFOEMANCE 

Sec.  1201.     Generally. 

Sec.  1202.     The  subject  of  specific  performance  is  the  bilateral  contract 

and  not  the  option. 
Sec.  1203.     Discretion  of  the  court. 

Sec.  1204.     Equitable  essentials  for  specific  performance.   Generally, 
Sec.  1205,     Inadequacy  of  consideration.   SeaL 
Sec.  1206.     Statute  of  frauds. 
Sec.  1207.     Statute  of  frauds.   Part  performance. 
Sec.  1208.     Same.    Same.    Cases. 

Sec.  1209.     Inadequacy  of  remedy  at  law.   Options  on  land. 
Sec.  1210.     Inadequacy  of  remedy  at  law.    Options  on  personal  chattels. 

Shares  of  stock. 
Sec.  1211.     Option  in  leases. 
Sec.  1212.     Arbitration  clauses. 
Sec.  1213.     Valuation  clauses. 
Sec.  1214.     Mutuality.    Meaning  of. 

See.  1215,     Mutuality.    Application  of  rule  to  option  contracts. 
Sec.  1216.     Distinction  between  mutuality  of  remedy  and  of  obligation. 
Sec.  1217.     The  same,   continued.    The   option   contract. 
Sec.  1218.     The  same,  continued.    The  bilateral  contract.    Mutuality  of 

obligation  means  consideration. 
Sec.  1219.     Mutuality,    Old  rule.    Cooke  v.  Oxley. 
Sec.  1220.     Mutuality.    Old  rule. 
Sec.  1221.     Mutuality.    Old  rule  modified.    Boucher  v.  Van  Buskirk,  and 

other  Kentucky  cases. 
Sec.  1222.     Mutuality,     Benedict  v.  Lynch  and  other  New  York  cases. 
Sec,  1223.     Mutuality.     Old    rule    modified.     Graybill    v.    Braugh,    and 

other  Virginia  cases. 
Sec.  1224.     Mutuality.     Options    and    offers.     Modern    and    established 

rule.     Generally. 

Sec.  1225.     Mutuality.     Modern    and    established    rule.     Alabama.     Ar- 
kansas. 

Sec.  1226.     Mutuality.     Modern  and  established  rule,     California.     Colo- 
rado. 

(543) 


LAW  OF  OPTION  CONTRACTS  544 

Sec.  1227.     Mutuality.     Modern  and  established  rule.     Georgia.     Illinois. 

Sec.  1228.  Mutuality.  Modern  and  established  rule.  Indiana.  EAnsas. 
Iowa.     Louisiana.     Maryland. 

Sec.  1229.     Mutuality.     Modern  and  established  rule.     Massachusetts. 

Sec.  1230.  Mutuality.  Modern  and  established  rule.  Michigan.  Min- 
nesota. Missouri.  Montana.  Nebraska.  Nevada.  New 
Mexico.     North  Dakota. 

Sec.  1231.     Mutuality.     Modern  and  established  rule.     New  Jersey. 

Sec.  1232.  Mutuality.  Modern  and  established  rule.  North  Carolina, 
Ohio.     Oregon. 

Sec.  1233.  Mutuality.  Modern  and  established  rule.  Pennsylvania. 
Ehode  Island.     South  Carolina.     Tennessee. 

See.  1234.  Mutuality.  Modern  and  established  rule.  Virginia.  West 
Virginia.  Washington.  Wisconsin.  Wyoming.  Fed- 
eral decisions. 

Sec.  1235.     Mutuality.     Miscellaneous  cases. 

Sec.  1236.  Mutuality.  Summary  of  decisions.  Election  raises  contract 
having  mutuality  of  obligation,  and,  as  a  rule,  mutuality 
of  remedy. 

Sec.  1237.     Mutuality.     So-called  exceptions  to  rule. 

Sec.  1238.     Persons  entitled  to  specific  performance. 

Sec.  1239.     Necessary  and  proper  parties.     English  rule. 

Sec.  1240.     Necessary  and  proper  parties.     Prevailing  rule. 

Sec.  1241.     Parties  plaintiff. 

Sec.  1242.     Parties  defendant. 

Sec.  1243.     Parties.     Dower  and  homestead  rights  of  wife. 

Sec.  1244.     Complaint  or  bill. 

Sec.  1245.     Eeformation  of  contract. 

Sec.  1246.     Demurrer.     Cross  complaint.     Answer. 

Sec.  1247.     Damages  in  lieu  of  or  as  incident  to  specific  performance. 

Sec.  1248.     Defenses. 

Sec.  1249.     Defenses.     Increase  ox  decrease  in  value. 

Sec.  1250.     Laches. 

Sec.  1251.     Time  to  sue. 

Sec.  1252.     Statute  of  limitations. 

Sec.  1253.     Evidence. 

Sec.  1254.    Decree. 


545  SPECIFIC  PERFORMANCE OBJECT  OF        §  1201 

Section  1201.  GENERALLY.— Specific  per- 
formance lias  for  its  object  the  enforcement  of  an 
executory  contract  according  to  the  precise  terms 
agreed  upon.  The  common  law,  of  course,  afforded 
no  such  specific  redress.  Limited  by  certain  fixed 
rules,  common  law  courts  awarded  money  damages 
only  against  the  breaching  party  to  the  contract. 
These  monej^  damages  were  looked  upon  as  full  and 
legal  compensation  to  the  injured  party.  A  court 
of  equity  regards  such  damages,  in  special  cases,  as 
affording  inadequate  relief  and  so  it  has  become  a 
rule  that,  where  in  a  particular  case,  breach  of  the 
contract  can  not  be  adequately  compensated  by 
awarding  damages,  a  court  of  equity  will  compel 
the  specific  performance  of  the  contract  by  requir- 
ing the  breaching  party  to  do  the  precise  thing  he 
agreed  to  do. 

We  are  here  concerned  with  options  for  the  pur- 
chase of  real  property  or  personal  chattels  only.  As 
a  rule,  damages  for  breach  of  an  executory  contract 
to  sell  and  convey  a  particular  tract  of  land  are 
inadequate  and  specific  performance  is  granted  as 
a  matter  of  course.  As  to  the  sale  and  delivery  of 
personal  chattels,  specific  performance  is  not 
granted  except  under  special  circumstances,  since 
in  the  common  run  of  cases,  an  action  for  damages 
furnishes  an  adequate  remedy. 

The  right  to  specific  enforcement  of  the  contract 
is  circumscribed,  however,  by  certain  rules,  some  of 
which  are  common  to  courts  of  law  and  some 
peculiar  to  courts  of  equity. 

35 — Option   Contracts. 


§  1202  LAW  OF  OPTION  CONTRACTS  546 

It  is  proposed  in  this  chapter  to  bring  together 
the  decisions  of  the  courts  touching  option  con- 
tracts, and  to  show  the  application  of  these  rules  to 
such  contracts  in  suits  for  their  specific  enforce- 
ment. 

Sec.  1202.  THE  SUBJECT  OF  SPECIFIC 
PERFOEMANCE  IS  THE  BILATERAL  CON- 
TRACT AND  NOT  THE  OPTION.— It  is  well  to 
bear  in  mind  the  distinction  pointed  out  in  pre- 
ceding chapters.  If  the  optionee  fails  properly  and 
timely  to  elect  and  make  tender,  where  tender  is  a 
part  of  the  act  of  election,  his  rights  imder  the 
option  are  at  an  end.  If,  on  the  other  hand,  he 
properly  and  timely  elects  and  tenders,  the  option 
contract  is  turned  into  a  bilateral  contract.^  Speak- 
ing technically,  it  is  not  the  option  contract  at  all 
which,  in  the  latter  case,  is  the  subject  of  specific 
performance;  but  rather,  the  bilateral  contract 
raised  by  the  election  and  tender,^  and  whether  or 
not  plaintiff  is  entitled  to  have  specific  perform- 
ance, must  be  determined  in  accordance  with  the 
rules  of  equity  applicable  to  bilateral  contracts, 
keeping  in  mind  the  rule  of  relation,  for  the  pur- 
pose of  testing  the  equities  and  rights  of  the 
respective  parties.  The  election  and  tender,  that  is, 

1  We  use  the  expression  "bilateral  contract"  here  and  elsewhere,  but  it 

must  be  understood  it  is  used  on  the  assumption  that  the  election  is 
one  binding  the  optionee  to  purchase.    See  Sec.  417. 

2  Eude  V.  Levy,  43  Colo.  482,  96  P.  560,  24  L.  E.  A,   (N.  S.)   91,  127 

A.  S.  E.  123 ;  Eease  v.  Kittle,  56  W.  Va.  269,  49  S.  E.  150 ;  Watkins 
V.  Eobertson,  105  Va.  269,  54  S.  E.  33,  38,  115  A.  S.  E.  880,  5  L.  E.  A. 
(N.  S.)  1194;  Smith  v.  Bangham,  156  Cal.  359,  104  P.  689,  28 
L.  R.  A.  (N.  S.)  522. 


547  SPECIFIC  PERFORMANCE — DISCRETION  OF  COURT        §  1203 

the  raising  of  the  bilateral  contract,  must  be 
deemed  to  have  taken  place  as  of  the  time  of  the 
execution  of  the  option  contract.^  So,  while  it  is 
true,  in  a  technical  sense,  and  particularly  from 
the  standpoint  of  mutuality,  that  the  subject  of  the 
suit  for  specific  performance  is  the  bilateral  con- 
tract and  not  the  option,  still,  if  there  are  any  facts 
or  circumstances  attending  the  option  contract, 
which  like  fraud,  for  instance,  would  be  sufficient 
to  justify  the  withholding  of  the  remedy,  courts  of 
equity  will  consider  such  facts  and  circumstances. 

Sec.  1203.  DISCRETION  OF  THE  COURT.— 

It  is  a  common  place  statement  that  the  granting 
or  the  withholding  of  specific  performance  is  in  the 
sound  judicial  discretion  of  the  court,^  and  is  not 
a  matter  of  right. ^  By  this  it  is  not  meant  the  court 
may  arbitrarily  grant  or  deny  specific  performance. 
It  means,  merely,  that  when  all  the  facts  and  cir- 
cumstances of  the  case  are  before  the  court,  the 
court  grants  or  denies  specific  performance  in 
accordance  with  the  rules  of  equity  upon  the  sub- 
ject, rules  which  are  now  as  well  established  and  as 
uniformly  applied  as  rules  of  law,  and  when,  there- 
fore, the  contract  sought  to  be  specifically  enforced, 

3  Donnally  v.  Parker,  5  W.  Va.  301 ;  see  Sees.  514,  515. 

iHoUmann  v.  Conlon,  143  Mo.  369,  45  S.  W.  275;  Hennessey  v.  Wool- 
worth,  128  U.  S.  438,  32  L.  Ed.  500,  9  S.  Ct.  109. 

1  Thomas  v.  Gottlieb  etc.  Co.,  102  Md.  417,  62  Atl.  633 ;  Page  v.  Martin, 
46  N.  J.  Eq.  585,  20  Atl.  46;  Bluegrass  Realty  Co.  v.  Shelton,  148 
Ky.  666,  147  S.  W.  33. 


§  1203  LAW  OF  OPTION   CONTRACTS  548 

couforms  to  such  rules,  specific  performance  is 
granted  as  a  matter  of  course.^ 

When  the  ground  of  defense  is  unfairness  of  the 
contract  or  the  hardship  of  the  remedy,  the  court 
exercises  its  discretion  in  a  true  sense,  since  each 
case  must  stand  and  he  decided  upon  its  own  facts 
and  circumstances,  but  where  the  defense  is  fraud, 
misrepresentation,  mistake,  lack  of  mutuality, 
inadequate  consideration,  laches,  uncertainty  or 
incompletenesss  of  the  contract,  and  such  like,  a 
court  of  equity,  in  allowing  or  rejecting  the  defense, 
is  merely  deciding  whether  a  case  has  been  made 
which  brings  it  within  the  rule  of  law  on  the  sub- 
ject* 

3  Anderson  v.  Anderson,  251  HI.  415,  96  N.  E.  265,  Ann.  Cas.  1912C,  556; 
Matthes  v.  Wier,  (Del.  Ch.)  84  Atl.  878;  Eoberts  v.  Braffett,  33 
Utah  51,  92  P.  789. 

But  caution  is  exercised,  Van  Doren  v.  Robinson,  16  N.  J.  Eq.  256, 
lease  and  option;  Rude  v.  Levy,  43  Colo.  482,  96  P.  560,  24  L.  R.  A. 
(N.  S.)  91,  127  A.  S.  R.  123;  Corbett  v.  Cronkhite,  239  ni.  9,  87 
N.  E.  874;  Davis  v.  Petty,  147  Mo.  374,  48  S.  W.  944,  946;  Stengel 
V.  Sergeant,  74  N.  J.  Eq.  20,  68  Atl.  1106 ;  HoUmann  v.  Conlon,  supra. 

The  same  caution,  however,  is  exercised  in  the  specific  enforcement  of 
bilateral  contracts.  What  is  really  meant  is,  for  instance,  that  the 
court  will  not  enforce  unilateral  contracts  not  timely  and  properly 
accepted,  that  is,  option  contracts  without  consideration,  or  rather 
mere  oflFers.  As  said  in  Woodward  v.  Davidson,  150  Fed.  840 
(reversed  on  other  grounds  156  Fed.  915),  "an  option  to  buy  real 
estate  given  for  a  valuable  consideration  is,  in  the  eyes  of  the  law, 
as  sacred  as  any  other  lawful  contract  and  is  enforceable  by  suit  in 
equity."  See  Hawralty  v.  Warren,  18  N.  J.  Eq.  124,  90  Am.  Dee. 
613 ;  Beddow  v.  Flage,  22  N.  D.  53,  132  N.  W.  637. 

x'he  real  test  is  whether,  from  all  the  circumstances,  specific  perform- 
ance will  subserve  the  ends  of  justice  and  work  no  hardship  on  the 
defendant,  Pearson  v.  Millard,  150  N.  C.  303,  63  S.  E.  1053. 

Denied  though  no  fraud  is  imputable  to  plaintiff  where  defendant  is 
old,  infirm,  etc..  Bell  v.  Howard,  9  Mod.  302,  88  Eng.  Reprint  467. 

4Wetherby  v.  Griswold,  (Ore.)  147  P.  388;  Western  Sec.  Co.  v.  Atlee, 
(Iowa)  151  N.  W.  56;  Clough  v.  Cook,  (Del.  Ch.)  87  Atl.  1017,  1019. 


549  SPECIFIC  PERFORMANCE — EQUITABLE  ESSENTIALS      §  1204 

Sec.  1204.  EQUITABLE  ESSENTIALS  FOR 
SPECIFIC  PERFORMANCE.  GENERALLY. 
— A  timely  and  proper  election,  by  the  optionee  and 
tender,  when  necessary,  do  not  alone  entitle  him  to 
specific  performance.  Such  acts,  however,  are  con- 
ditions precedent  to  his  right  to  obtain  specific 
performance.^  But  having  elected  and  tendered, 
where  tender  is  necessary,  his  case  must  then  meet 
the  requirements  of  the  rules  on  the  subject. 

A  decree  of  specific  performance  will  not  be 
granted  when,  because  of  circimastances,  the  decree 
can  not  be  executed,  or  when  it  would  be  nugatory, 
or  when  the  contract  is  so  uncertain  or  incomplete 
in  its  terms  that  the  court  can  not  form  a  proper 
decree  f  orr  when,  under  the  circumstances,  the  exe- 
cution of  the  decree  would  require  supervision  by 
the  court  involving  continuous  acts  on  its  part,  and 
thus  unduly  tax  the  time  of  the  court.^  In  the  latter 
cases,  however,  the  court  acts  on  its  own  discretion. 

Of  course,  the  option  contract  must  not  have  been 
secured  through  fraud  or  by  misrepresentation;* 

1  Eude  V.  Levy,  43  Colo.  482,  96  P.  560,  24  L.  E.  A,  (N.  S.)   91,  127 

A.  S.  E.  123;  Finn  v.  Bowden,  66  Fla.  41,  63  So.  139;  Gates  v. 
McNeil,  (Cal.)  147  P.  944. 

2  See  Sees.   209-213;    Tippins  v.  Phillips,   123   Ga.   415,   51   S.  E.   410, 

description;  Clinchfield  Coal  Co.  v.  Powers,  107  Va.  393,  59  S.  E.  370, 
misunderstanding  as  to  acreage;  New  England  Box  Co.  v.  Prentiss, 
75  N.  H.  246,  72  Atl.  826,  terms  of  agreement  iinilateral;  Krah  v. 
Wassmer,  75  N.  J.  Eq.  109,  71  Atl.  404;  Zimmerman  v.  Ehodes,  226 
Pa.  174,  75  Atl.  207,  amount  of  royalty,  term  of  contract,  and 
quantity  of  coal  to  be  mined. 

8  Stanton  v.  Singleton,  126  Cal.  657,  59  P.  146,  47  L.  E.  A.  334,  stamp 
mill;  Clarno  v.  Grayson,  30  Ore.  Ill,  46  P.  426,  437. 

4  Van  Deusen  v.  Brown,  167  Mich.  49,  132  N.  W.  472;  Clough  v.  Cook, 
(Del.  Ch.)  87  Atl.  1017,  misrepresentation  must  have  been  relied  on. 


§  1204  LAW  OF  OPTION  CONTRACTS  550 

its  execution  must  not  have  been  procured  by  undue 
influence ;  there  must  not  be  mistake  in  the  essen- 
tial terms  of  the  contract ;  the  contract  must  not  be 
illegal,  immoral,  or  against  public  policy;  it  must 
not  be  unfair  in  its  terms  ;^  and  the  decree,  if 
granted,  must  not  injuriously  or  harshly  affect  the 
defendant,^  or  even  third  persons;^  and  particu- 
larly when  not  beneficial  to  plaintiff.^    Plaintiff 

4  The  mere  fact  that  the  option  was  taken  as  a  speculation  does  not 
render  it  fraudulent,  Cummins  v.  Beavers,  103  Va.  230,  48  S.  E.  891, 
106  A.  S.  E.  881,  1  Ann.  Gas.  986. 

6  Marsh  v.  Lott,  8  Cal.  App.  384,  97  P.  163 ;  Berry  v.  Frisbie,  120  Ky. 

337,  86  S.  W.  558,  27  Ky.  L.  Eep.  724,  oil  lease;  Thomas  v.  Gottlieb 
etc.  Co.,  102  Md.  417,  62  Atl.  633;  Federal  Oil  Co.  v.  Western  Oil 
Co.,  121  Fed.  674,  57  C.  C.  A.  428 ;  Clark  v.  Eosario  M.  &  M.  Co., 
176  Fed.  180,  99  C.  C.  A.  534;  Tebeau  v.  Eidge,  261  Mo.  547,  170 
S.  W.  871;  Forgey  v.  Gilbirds,  262  Mo.  44,  170  S.  W.  1135. 
In  Matthes  v.  Wier,  (Del.  Ch.)  84  Atl.  878,  the  court  says,  "The  con- 
tract (to  be  specifically  enforceable)  must  be  concluded,  certain, 
unambiguous,  mutual  and  upon  a  valuable  consideration;  it  must 
be  perfeclty  fair  in  all  its  parts;  free  from  any  misrepresentation 
or  misapprehension,  fraud,  or  mistake,  imposition  or  surprise;  not 
an  unconscionable  or  hard  bargain;  and  its  performance  not 
oppressive  upon  the  defendant,  and  finally  it  must  be  capable  of 
specific  execution  through  a  decree  of  the  court. ' ' 

•  Hopwood  V.  McClausland,  120  Iowa  218,  94  N.  W.  469;  Meidling  v. 
Trefz,  48  N.  J.  Eq.  638,  23  Atl.  824. 
Plaintiff  will  not  be  entitled  to  specific  performance  or  to  damages, 
when  he  refuses  to  accept  lease  containing  option  to  purchase  because 
of  certain  litigation  to  which  defendants  were  not  parties  and  for 
which  they  are  not  responsible,  Livesley  v.  Muckle,  46  Ore.  420, 
80  P.  901. 

7  Stanton  v.    Singleton,   126   Cal.   657,   59   P.    146,   47   L.  E.    A.   334; 

Eathbone  v.  Groh,  137  Mich.  373,  100  N.  W.  588;  Davenport  v. 
Latimer,  53  S.  C.  563,  31  S.  E.  630,  innocent  purchaser;  see  Curran 
V.  Holyoke  Water  Power  Co.,  116  Mass.  90;  DowUng  v.  Bergin, 
47  Mich.  188,  10  N.  W.  194,  third  party  in  possession;  Johnson  v. 
HubbeU,  10  N.  J.  Eq.  332,  66  Am.  Dec.  773. 

8  Chicago  &  A.  E.  Co.  v.  Schoeneman,  90  111.  258;   King  v.  Hamilton, 

29  U.  S.  311,  7  L.  Ed.  869 ;  Texas  &  P.  Ey.  Co.  v.  City  of  Marshall, 
136  U.  S.  393,  34  L.  Ed.  385,  10  S.  Ct.  846. 


551  SPECIFIC  PERFORMANCE — EQUITABLE  ESSENTIALS      §  1204 

must  come  into  court  with  clean  hands,^  and  show 
performance  on  his  part/" 

An  option  will  not  be  specifically  enforced  where 
there  are  facts  or  circumstances  surrounding  the 
transaction  which  render  it  unjust  or  inequitable  to 
do  so/^  For  instance,  specific  performance  will  not 
be  decreed  against  the  optionor  who  is  not  able,  for 
want  of  title,  to  comply  with  the  contract  ;^^  or, 
when  a  decree  would,  under  special  circumstances, 
give  an  unfair  advantage  to  the  optionee  ;^^  or, 

9  York  V.  Searles,  189  N.  Y.  573,  82  N.  E.  1134,  affirming  s.  c.  90  N.  Y. 
S.  37,  97  App.  Div.  331;  Iteynolds  v.  Boland,  202  Pa.  642,  52  Atl. 
19;  Houtz  V.  Hellman,  228  Mo.  655,  128  S.  W.  1001;  Washburn  v. 
White,  197  Mass.  540,  84  N,  E.  106;  George  Gunther  Jr.  Brew.  Co. 
V.  Brywczynski,  107  Md.  696,  69  Atl.  514. 

McLaughUn  v.  Leonhardt,  113  Md.  261,  77  Atl.  647,  holding  that 
specific  performance  of  an  agreement  to  give  plaintiff  an  option  to 
purchase  corporate  stock  will  not  be  granted  when  the  evidence 
shows  bad  faith  on  the  part  of  plaintiff  and  the  person  acting 
for  him. 

Where  a  real  estate  broker,  employed  to  purchase  property,  took  an 
option  in  his  own  name,  there  was  a  breach  of  faith  and  conveyance 
having  been  made  to  the  principal,  he  was  not  entitled  to  specific 
performance.  Pace  v.  Cline,  (Colo.)  147  P.  672. 

10  Lonergan  v.  Goodman,  241  111.  200,  89  N.  E.  349 ;  Eude  v.  Levy,  43 

Colo.  482,  96  P.  560,  24  L.  R.  A.  (N.  S.)  191,  127  A.  S.  R.  123; 
Briles  v.  Paulson,  (Cal.)  149  P.  169. 

11  Aiple  etc.  Co.  v.  Spelbrink,  211  Mo.  671,  111  S.  W.  480,  14  Ann.  Gas. 

652;  Starcher  Bros.  v.  Duty,  61  W.  Va.  373,  56  S.  E.  524,  123 
A.  S.  R.  990,  9  L.  R.  A.  (N.  S.)  913,  inequality  resulting  from 
ignorance,  etc.,  of  optionor. 

12  Smith  V.  Bangham,  156  Cal.  359,  104  P.  689,  28  L.  R.  A.  (N.  S.)  522. 

13  Starcher  v.  Duty,  61  W.  Va.  373,  56  S.  E.  524.  123  A.  S.  R.  990, 

9  L.  R.  A.  (N.  S.)  913. 

See  Green  River  Coal  Min.  Co.  v.  Brown,  140  Ky.  332,  131  S.  W.  13, 
holding  defense  that  enforcement  of  option  agreement  optionee 
would  work  injustice  to  him,  will  not  defeat  specific  performance, 
unless  he  shows,  by  preponderance  of  the  evidence,  the  absence  of 
coal  of  workable  quality  and  condition  under  the  land. 


§  1205  LAW  OP  OPTION  CONTRACTS  552 

where  the  conduct  of  the  optionee  has  induced  the 
optionor  to  infer  an  abandonment  of  the  option  to 
buy,  and  by  acting  upon  such  inference,  the 
optionor  has  been  injured/* 

Sec.  1205.  INADEQUACY  OF  CONSIDERA- 
TION. SEAL. — Another  rule  is  that  the  con- 
sideration must  be  valuable  and  adequate.^  The 
consideration  referred  to  is  the  consideration  to 
support  the  contract  raised  by  the  election  to  pur- 
chase under  the  option.  The  consideration  of  the 
option  contract  is  a  separate  and  distinct  matter. 
A  nominal  money,  or  any  other  valuable  considera- 
tion, will  uphold  the  option  contract  in  the  sense 
that  it  will  make  it  binding  upon  the  optionor 
during  its  time  limit.-  However,  the  smallness  of 
the  consideration  to  support  an  option  has  been 
taken  into  account  by  some  of  the  courts  in  deter- 
mining the  fairness  of  the  transaction,  and  a  few 
have  held  that  a  small  money  consideration  is 
inadequate,  and  refused  specific  performance.  But 
these  decisions  are  against  the  great  weight  of 
authority  and,  as  a  rule,  were  made  upon  a  set  of 
circumstances  which  rightly  justified  the  denial  of 
specific  performance  upon  some  oiher  equitable 
ground. 

Inadequacy  of  the  price  for  the  property,  when 
it  is  so  gross  and  palpable  as,  of  itself,  to  appear 
evidence  of  actiml  fraud,  may  be  sufficient  to  induce 

14  Meidling  v.  Trefz,  48  N.  J.  Eq.  638,  23  Atl.  824;  see  Orby  v.  Trigg, 
9  Mod.  2,  88  Eng.  Eeprint  276. 

1  Rice  V.  Gibbs,  33  Neb.  460,  50  N.  W.  436 ;  see  See.  324. 

2  See  Sees.  328,  330. 


553      SPECIFIC  PERFORMANCE — STATUTE  OF  FRAUDS    §  1206 

the  court  to  stay  the  exercise  of  its  discretionary 
power  to  enforce  specific  performance  and  leave 
the  party  to  his  remedy  at  law ;  but  inadequacy  of 
price  merely,  without  being  such  as  to  prove  fraud 
conclusively,  is  not  a  good  objection  against  decree- 
ing specific  performance.' 

In  some  jurisdictions  a  seal  imports  a  considera- 
tion, but  the  eflect  of  a  seal,  in  equity,  is  to  raise  a 
presumption  of  consideration  only.  Parol  evidence 
is  admissible  to  show  that  no  consideration  was  in 
fact  rendered  or  paid,  notwithstanding  the  seal.* 

Sec.  1206.  STATUTE  OF  FRAUDS.— This 
subject  has  been  discussed  in  Chapter  IV,  and, 
therefore,  it  is  sufficient  to  point  out  here  that  a 
contract  sought  to  be  specifically  enforced,  if  it  falls 
within  its  provisions,  must  meet  the  requirements 
of  that  statute,  which  requirements  are,  speaking 
generally,  that  the  option  contract  must  be  in  writ- 
ing, identify  the  parties,  set  forth  the  terms  of  the 
agreement,  describe  the  subject  matter  sufficiently 
for  identification,  be  subscribed  by  the  party  to  be 
charged,  and,  in  some  jurisdictions,  the  considera- 
tion must  be  recited  or  shown.  ^ 

By  force  of  the  statute,  a  memorandiun  of  the 
contract  is  sufficient.  Parol  evidence  is  not  admis- 
sible to  supply  any  essential  term  of  the  agreement.^ 

8  Van  Norsdall  v.  Smith,  141  Mich.  355,  104  N.  W.  660 ;   Hamilton   v. 
Hamilton,  162  Ind.  430,  70  N.  E.  535;  see  Sec.  324. 

4Corbett  v.  Cronkhite,  239  HI.  9,  87  N.  E.  874;  Crandall  v.  Willig,  166 
HL  233,  46  N.  E.  755;  see  Sees.  332,  333. 

1  See  Sec.  406. 
3  Sec.  406. 


§  1207  LAW  OF  OPTION   CONTRACTS  554 

By  the  weight  of  authority,  an  agreement  extending 
the  option  time  to  elect  falls  within  the  statute.^  In 
some  jurisdictions  the  authority  of  the  agent  to 
execute,  on  behalf  of  his  principal,  an  agreement 
required  by  law  to  be  in  writing,  must  also  be  in 
writing,  and  be  subscribed  by  the  principal.* 

An  option  contract,  though  evidenced  by  a  writ- 
ing sufficient  under  the  Statute  of  Frauds,  is  not 
necessarily  a  contract  which  may  be  specifically 
enforced  where  the  price  of  the  property  is  inade- 
quate and  an  unfair  advantage  was  taken  of  the 
optionor  in  securing  the  execution  of  the  option.^ 
An  option  contract  for  sale  of  the  land  though 
signed  by  the  optionor  only,  if  otherwise  sufficient, 
will,  if  there  is  a  timely  and  proper  election  by  the 
optionee,  be  specifically  enforced  at  the  suit  of  the 
latter  notwithstanding  objection  of  want  of  mutu- 
ality of  remedy.^  In  such  case,  want  of  mutuality 
is  cured  by  the  optionee's  bill  for  specific  perform- 
ance, the  remedy  thereby  becoming  mutual.'^ 

Sec.  1207.  STATUTE  OF  FRAUDS.  PART 
PERFORMANCE.— A  court  of  equity,  in  the 
exercise  of  its  general  jurisdiction  to  relieve  against 

3  See  Sees.  409,  413. 

4  See  Sec.  405. 

6  Leuschner  v.  Duff,  7  Cal.  App.  721,  95  P.  914. 

«  Cheney  v.  Cook,  7  Wis.  413 ;  Gira  v.  Harris,  14  S.  D.  537,  86  N.  W. 
624;  Vance  v.  Newman,  72  Ark.  359,  80  S.  W.  574,  105  A.  S.  E.  42; 
Moses  V.  McClain,  82  Ala.  370,  2  So.  741;  Ross  v.  Parks,  93  Ala.  153, 
8  So.  368,  30  A.  S.  R.  47,  11  L.  R.  A.  148;  see  Sees.  1213,  et  seq. 

7  Peevey  v.  Haughton,  72  Miss.  918,  17  So.  378,  18  So.  357,  48  A.  S.  R. 

592 ;  Perry  v.  Paschal,  103  Ga.  134,  29  S.  E.  703. 


555      SPECIFIC  PERFORMANCE — PART  PERFORMANCE    §  1207 

fraud,  has  power  to  grant  specific  performance  of 
oral  contracts  relating  to  land  where  there  has  been 
part  performance  of  the  contract  on  the  part  of 
plaintiff.  The  jurisdiction,  however,  is  not  exer- 
cised because  of  any  binding  effect  of  the  oral 
contract,  but  in  order  to  prevent  fraud,  and  hence, 
it  is  only  in  those  cases  where,  to  deny  specific  per- 
formance, would  be  to  work  a  fraud  upon  plaintiff, 
that  he  is  entitled  to  such  relief.^ 

There  must  be  an  oral  contract,^  and  the  acts 
constituting  part  performance  must  be  referable  to 
the  oral  contract.'  A  tenant  who  had  been  occupy- 
ing a  building  and  presuming  that  on  termination 
of  his  lease,  he  would  be  compelled  to  vacate, 
secured  an  option  on  another  building.  Subse- 
quently, he  contracted  orally  with  the  landlord  of 
the  building  which  he  occupied,  for  a  lease  for  a 
greater  term  than  one  year,  and  it  was  held  he  could 
not  maintain  a  suit  for  specific  performance  on  the 
ground  that  part  performance  had  taken  the  lease 
out  of  the  statute,  as  his  possession  was  a  mere 
uninterrupted  continuation  of  a  former  possession 

1  Wallace  v.  Eappleye,  103  HI.  229;    Small  t.  Owings,   1  Md.  Ch.  363; 

Wheeler  v.  ReTnolds,  66  N.  Y.  227;  Sullivan  v.  O'JSTeal,  66  Tex.  433, 
1  S.  W.  185;  Kidder  v.  Hunt,  18  Mass.  (1  Pick.)  328,  11  Am. 
Dec.  183.  * 

2  See  Hartwell  v.  Black,  48  HI.  301 ;  Gibbs  t.  Whitwell,  164  Mo.  387,  64 

S.  W.  110;  Price  v.  Lloyd,  31  Utah  86,  86  P.  767,  8  L.  E.  A. 
(N.  S.)  870. 

8  Possession  by  tenant  under  a  lease  and  option  to  purchase  and  improve- 
ments made  by  him  on  the  leased  premises,  are  referable  to  his  rights 
as  tenant  under  the  lease  and  not  to  his  rights  under  the  option, 
Abbott  V.  76  Land  Co.,  101  Cal.  567,  36  P.  1,  53  P.  445;  see  Bigler 
V.  Baker,  40  Neb.  325,  58  N.  W.  1026,  24  L.  B.  A.  255;  Broadway 
H.  &  S.  V.  Decker,  47  Wash.  586,  92  P.  445. 


§  1208  LAW  OF  OPTION  CONTRACTS  556 

and  the  abandonment  of  the  option  was  not  in  pur- 
suance of  any  contract  with  the  landlord.* 

Payment  of  part  or  of  the  whole  of  the  price  is 
not  alone  such  part  performance  as  to  entitle  the 
plaintiff  to  relief  f  nor,  is  mere  naked  possession ; 
nor,  are  improvements  without  possession  suf&- 
cient.**  Speaking  generally,  to  constitute  part  per- 
formance, plaintiff  must  have  taken  possession, 
imder  the  contract,  with  the  consent,  expressed  or 
implied,  of  the  defendant,  and  paid  some  part  of 
the  purchase  price,  or  constructed  valuable  and 
permanent  improvements  on  the  land.'^ 

Sec.  1208.  SAME.  SAME.  CASES.— Where 
plaintiff  had  a  written  option  to  purchase  land  and 
exercised  it  within  the  prescribed  time,  entered  into 
possession  of  the  land,  and  expended  money 
thereon,   he   is   entitled   to   specific   performance 

4  Henry  Jennings  &  Sons  v.  Miller,  48  Ore.  201,  85  P.  517 ;  J.  L.  Gates 
Land  Co.  v.  Ostrander,  124  Wis.  287,  102  N.  W.  558,  holding  relin- 
quishment of  option  on  facts,  not  act  of  part  performance. 

B  Cooper  T.  Colson,  66  N.  J.  Eq.  328,  58  Atl.  337,  105  A.  S.  R.  660, 

This  is  a  correct  statement  of  the  rule  in  most  jurisdictions,  Rogan  v. 
Arnold,  233  lU.  19,  84  N.  B.  58;  Peckham  v.  Balch,  49  Mich,  179, 
13  N.  W.  506 ;  Halsell  v.  Eenf row,  202  U.  S.  287,  50  L.  Ed.  1032, 
26  S.  Ct.  610. 
But  in  Delaware  part  payment,  if  shown  in  writing,  is  such  part  per- 
formance as  removes  the  bar  of  the  statute  of  frauds,  Matthes  v, 
Wier,  (Del.  Ch.)  84  Atl.  878, 

6  Hanes  v.  Newport,  134  111.  App.  453.   This  was  a  case  of  naked  posses- 

sion and  the  bUl  did  not  allege  that  the  optionee  (lessee)  had  paid 
the  rentals,  or  elected,  or  made  improvements. 

7  Smith  V.  Taylor,  2  Wash,  422,  27  P.  812,  improvements  small,  etc. ; 

West  V.  Wash.  etc.  Railroad,  49  Ore.  436,  90  P,  666;  Finlen  v.  Heinze, 
32  Mont.  354,  80  P.  918;  Bigler  v.  Baker,  supra;  Popp  v.  Swanke, 
68  Wis.  364,  31  N.  W.  916,  mere  deposit  of  title  papers  in  escrow 
not  sufficient.  See  Powell  v.  Lovegrove,  8  DeG.  M.  &  G.  357,  2  Jur. 
(N.  S.)  791,  44  Eng.  Reprint  427. 


557  SPECIFIC  PERFORMANCE — INADEQUACY  OF  REMEDY    §  1209 

against  the  owner/  So,  where  the  parol  agreement 
has  been  acted  upon  and  the  condition  of  the  parties 
thereby  changed.^ 

A  lessee  having  made  improvements  on  the  leased 
lands  will  be  granted  specific  performance  of  his 
option  in  the  lease  to  purchase.'  And  so  will  the 
assignee  of  the  optionee  where  the  assignee  has  been 
accepted  by  the  optionor,  and  has  paid  amounts  on 
the  purchase  price,  and  entered  into  possession/ 
And  so,  where,  under  an  oral  agreement  therefor, 
an  option  has  been  procured,  the  corporation 
formed,  and  the  stock  issued  to  the  parties/ 

Sec.  1209.  INADEQUACY  OF  REMEDY  AT 
LAW.  OPTIONS  ON  LAND.— The  general  rule 
is  that  equity  will  not  award  specific  performance 
where  there  is  an  adequate  and  complete  remedy  at 
law.^   This  rule  applies  to  option  contracts  but,  of 

1  Wall  V.  Minneapolis  etc.  E.  Co.,  86  Wis.  48,  56  N.  W.  367,  this  case 

involved  a  verbal  modification  of  the  option. 

2  Wilkins  v.  Evans,  1  Del.  Ch.  156 ;  but  not  where  no  election  is  made, 

J.  L.  Gates  L.  Co.  v.  Ostrander,  124  Wis.  287,  102  N.  W.  558, 

8  Eichardson  v.  Harkness,  59  Wash.  474,  110  P.  9;  but  not  where  optionee 
abandons  option.  Eagle  v.  Pettus,   109  Ark.  310,  159  S.  W,   1116. 
Finlen  v.   Heinze,  32  Mont.   354,   80   P.   918;    case  of  a  mine  where 
"slight  expenditures"  in  improvements  were  made. 

4  Cramer  v.  Mcroney,  59  N.  J.  Eq.  164,  44  Atl.  625 ;   one  of  the  points 
here  was  that  the  contract  was  signed  hj  the  vendor  only. 

6  Kent  V.  Costin,  (Minn.)  153  N.  W.  874. 

1  New  England  Box  Co.  v.  Prentiss,  75  N.  H.  246,  72  Atl.  826,  lumber  to 
be  cut  from  certain  landj  Paddock  v.  Davenport,  107  N.  C.  710, 
12  S.  E.  464,  trees. 
The  fact  that  optionee  contracts  to  sell  the  land  to  a  third  person,  does 
not  preclude  him  from  maintaining  a  suit  for  specifis  performance 
of  the  option  contract  on  the  ground  that  he  has  an  adequate  remedy 
at  law,  Solomon  Mier  Co.  v.  Hadden,  148  Mich.  488,  111  N.  W.  1040, 


§  1210  LAW  OF  OPTION  CONTRACTS  558 

course,  with  the  usual  qualifications.  For  instance, 
where  the  option  is  on  an  estate  in  land,  specific 
performance  is  granted  as  a  matter  of  course.  That 
is  to  say,  it  is  taken  for  granted  the  legal  remedy 
is  inadequate.^  Again,  there  is  a  view  which  finds 
support  in  the  decisions  that  the  very  thing  con- 
tracted for  in  an  option  is  the  right  to  have  specific 
perfoi-mance  of  it,  and  this  view  has  a  tendency 
towards  relaxing  the  general  rule  that  specific  per- 
formance will  not  be  granted  when  there  is  an  ade- 
quate remedy  at  law.  But  there  may  be  special 
circumstances,  especially  where  the  rights  of  third 
persons  will  be  injuriously  affected,  upon  consider- 

118  A.  S.  R.  586,  12  Ann.  Gas.  88,  nor  does  the  fact  that  the  optionor 
conveys  to  a  grantee  having  knowledge  of  the  option  for  which  the 
optionee  may  have  a  remedy  at  law  for  damages,  City  of  Birmingham 
V.  Forney,  173  Ala.  1,  55  So.  618. 

1  But  the  optionee  has  an  adequate  remedy  at  law  for  damages  where 

the  optionor  sold  directly  to  the  party  to  whom  the  optionee  had 
given  an  option,  Marthinson  v.  King,  150  Fed.  48,  82  C.  C.  A.  360; 
and  so  where  lessor  was  to  have  paid  to  him  one-tenth  of  the  price 
for  which  the  lessee  (under  a  lease  in  perpetuity)  sold  the  premises, 
Livingston  v.  Stickles,  8  Paige  (N.  Y.)  398. 

2  Aiple  etc.  Co.  ▼.  Spelbrink,  211  Mo.  671,  111  S.  W.  480,  14  Ann.  Cas. 

652;    Hodges  v.  Rowing,  58  Conn.   12,   18   Atl.   979;   Cummings   v. 

Nielson,  42  Utah  157,  129  P.  619 ;  Christiansen  v.  Aldrich,  30  Mont. 

446,  76  P.  1007;  Carnegie  Natural  Gas  Co.  v.  South  Penn  Oil  Co., 

56  W.  Va.  402,  49  S.  E.  548,  oil  and  gas  lease;   Matthes  v.  Wier, 

(Del.  Ch.)  84  Atl.  878;  Anderson  v.  Anderson,  251  Dl.  415,  96  N.  E. 

265,  Ann.  Cas.  1912C,  556;  Beddow  v.  Flage,  22  N.  D.  53,  132  N.  W. 

637;   Mathews  Slate  Co.  v.  New  Empire  Slate  Co.,  122  Fed.  972; 

Bryant  Timber  Co.  v.  Wilson,  151  N.  C.  154,  65  S.  E.  932,  timber; 

Tidball  v.  Challburg,  67  Neb.  524,  93  N,  W.  679,  grain  elevator. 
The  remedy  at  law,  however,  must  be  as  certain,  complete,  prompt,  and 

efficient  to  attain  the  ends  of  justice  as  the  remedy  in  equity.  Castle 

Creek  W.  Co.  v.  City  of  Aspen,  146  Fed.  8,  76  C.  C.  A.  516,  8  Ann. 

Cas.  660.   When  an  accounting  is  necessary,  the  remedy  in  equity  is 

more  complete.   Id. 
The  fact  that  plaintiff  is  entitled  to  condemn  the  optioned  land  is  a 

fact  to  be  taken  into  consideration,  but  is  not  a  bar,  Rice  v.  Lincoln 

etc.  R.  Co.,  88  Neb.  307,  129  N.  W.  425. 


559  SPECIFIC  PERFORMANCE INADEQUACY  OF  REMEDY     §  1210 

ation  of  which  the  court  will  deny  specific  perform- 
ance and  leave  the  party  to  his  remedy  at  law. 
Thus,  specific  performance  of  an  option  to  purchase 
land  by  R  of  G,  before  April  1st,  will  be  denied 
as  inequitable,  where  A  became  a  bona  fide  pur- 
chaser May  7th,  though  he  did  not  record  his  deed 
till  after  the  option  was  recorded,  June  3rd,  and 
not  only  paid  the  price  but  made  improvements  in 
ignorance  of  the  option,  where  R  will  suffer  but 
little,  if  any  loss,  and  has  a  remedy  at  law  for  any 
breach  of  contract  by  G-  who  sold  to  A  for  less 
than  R  agreed  to  pay,  on  the  understanding  that  R 
refused  to  purchase  because  a  release  of  mortgage 
could  not  be  obtained.* 

Sec.  1210.  INADEQUACY  OF  REMEDY  AT 
LAW.  OPTIONS  ON  PERSONAL  CHAT- 
TELS. SHARES  OF  STOCK.— The  general  rule 
is  that  a  court  of  equity  will  not  entertain  jurisdic- 
tion for  the  specific  performance  of  an  option 
respecting  goods,  chattels,  shares  of  stock  and 
choses  in  action  when  compensation  by  way  of 
damages  furnishes  a  complete  and  satisfactory 
remedy.^ 

The  reason  usually  given  is  that,  with  the  dam- 
ages awarded  for  breach  of  the  contract,  plaintiff 

3  Rathbone  v.  Groh,  137  Mieh.  373,  100  N.  W.  588. 

1  Hissam  v.  Parrish,  41  W.  Va.  686,  24  S.  E.  600,  56  A.  S.  R.  892.  This 
decision  is  correct  on  the  point  cited,  but  is  not  in  accord  with  the 
established  rnle  on  mutuality;  see  Sec.  1215  et  scq.;  New  England 
Box  Co.  V.  Prentiss,  75  N.  H.  246,  72  Atl.  826. 


§  1210  LAW  OP  OPTION  CONTRACTS  560 

will  be  enabled  to  procure,  in  the  market,  other 
articles  as  good  in  all  respects  as  those  contracted 
for.  The  legal  remedy  to  recover  damages,  there- 
fore, being  adequate,  specific  performance  will  not 
be  decreed. 

But  there  are  exceptions.  When,  for  instance, 
the  chattel  contracted  for  is  a  work  of  art,  or  a 
rare  article,  or  one  in  which  the  purchaser  has  a 
sentimental  interest,  or  where  the  specific  article 
itself  is  desired,  and  in  other  like  cases  in  which 
the  particular  article  can  not  be  duplicated  or  pur- 
chased elsewhere,  courts  of  equity  quite  uniformly 
grant  specific  performance.^ 

In  accordance  with  the  general  rule,  specific  per- 
formance of  an  option  contract  to  purchase  shares 
of  stock  will  not  be  granted  if  the  stock  is  one 
which  has  a  market  value  and  can  be  readily 
obtained  on  the  market.^  On  the  other  hand,  if  the 
stock  has  not  a  market  value  and  is  not  upon  the 
market  for  sale,  and,  therefore,  can  not  be  obtained 

2  See  Graham  v.  Herlong,  50  Fla.  521,  39  So.  Ill;  Sullivan  v.  Tuck,  1 

Md.  Ch.  59. 
Growing  trees,  granted,  Bryant  Timber  Co.  v.  Wilson,  151  N.  C.  154, 

65  S.  E.  932.    See,  however.  Paddock  v.  Davenport,  107  N.  C.  710, 

12  S.  E.  464,  where  trees  were  bought  with  a  view  to  their  severance 

from  the  soil  and  specific  performance  denied. 
Stock  of  goods  and  good  will  of  business  carried  on  on  leased  premises, 

with  option  to  reeew  lease,  Fred  Gorder  &  Son  v.  Pankonin,  83  Neb. 

204,  119  N.  W.  449. 

BNoyes  v.  Marsh,  123  Mass.  286,  agreement  to  repurchase;  Moulton  y. 
Warren  Mfg.  Co.,  81  Minn.  259,  83  N.  W.  1082;  Butler  v.  Wright, 
186  N.  Y.  259,  78  N.  E.  1002;  Bacon  v.  Grosse,  165  Cal.  481,  132  P. 
1027;  Eyan  v.  McLane,  91  Md.  175,  46  Atl.  340,  50  L.  E.  A.  501, 
80  A.  S.  E.  438,  pooled  stock,  not  granted. 


561  SPECIFIC    PERFORMANCE ^LEASES  §  1211 

except  from  the  seller,''  and  in  other  special  cases,'' 
specific  performance  will  be  granted. 

Sec.  1211.  OPTION  IN  LEASES.— Equity  will 
decree  specific  performance  of  a  covenant  in  a  lease 
which  provides  that  the  lessee  shall  have  the  privi- 
lege of  purchasing  the  leased  premises  for  a  fixed 
sum  of  money  on  or  before  the  expiration  of  the 
lease,  and  will  also  decree  the  specific  performance 
of  an  option  to  renew  the  lease. ^ 

4  Eiehbaum  v.  Sample,  213  Pa.  216,  62  Atl.  837,  option  to  repurchase; 
First  Nat 'I  Bank  of  Hastings  v.  Corp.  Sec.  Co.,  128  Minn.  341,  150 
N.  W.  1084;  see  Watkins  v.  Eobertson,  105  Va.  269,  54  S.  E.  33,  115 
A.  S.  E.  880,  5  L.  R.  A.  (N.  S.)  1194;  New  England  Trust  Co.  v. 
Abbott,  162  Mass.  148,  38  N.  E.  432;  27  L.  R.  A.  271. 

Scruggs  V.  CotteriU,  73  N.  Y.  S.  882,  67  App.  Div.  583,  option  between 
stockholders,  upon  death  of  either,  granted,  but  not  necessarily 
where  the  breach  hj  one  stockholder  has  not  resulted  in  actual  injury 
to  plaintiff,  Brown  v.  Britton,  58  N.  Y.  S.  353,  41  App.  Div.  57. 

Williams  v.  Montgomery,  148  N.  Y.  519,  43  N.  E.  57,  escrow  of  stock 
by  stockholder  for  six  months. 

Jones  V.  Brown,  171  Mass.  318,  50  N.  E.  648,  option  between  stock- 
holders. 

BKrouse  v.  Woodward,  110  Cal.  638,  42  P.  1084;  Gilfallan  v.  Gilfallan, 
168  Cal.  23,  141  P.  623 ;  Hogg  v.  McGuffin,  67  W.  Va.  456,  68  S.  E.  41, 
31  L.  E.  A.  (N.  S.)  491. 

1  Hall  V.  Center,  40  Cal.  63,  option  to  purchase;  Chas.  J.  Smith  Co.  v. 
Anderson,  (N.  J.  Eq.)  95  Atl.  358;  Wright  v.  Kayner,  150  Mich.  7, 
113  N.  W.  779,  option  to  renew  or  to  purchase;  Herman  v.  Babcock, 
103  Ind.  461,  3  N.  E.  142,  option  reserved  to  lessor  to  convey  at 
price  to  be  fixed  by  three  disinterested  persons. 

Hunter,  In  re,  1  Edw.  Ch.  (N.  Y.)  1,  option  to  purchase,  overruling 
Parkhurst  v.  Van  Cortlandt,  1  Johns.  Ch.  282,  and  Benedict  v.  Lynch, 
1  Johns.  Ch.  370,  7  Am.  Dec.  484,  saying  that  Chancellor  Kent,  there 
intimated  lack  of  mutuality,  but  in  the  later  case  of  Clason's  Ex'rs 
V.  Bailey,  14  Johns.  (N.  Y.)  484,  he  held  to  the  rule  stated  in 
the  text. 

While  formerly  there  was  a  marked  difference  of  opinion  among  the 
courts  as  to  the  validity  of  pure  options,  there  seems  to  have  been 
but  little  divergence  among  the  courts  as  to  the  enforceability  of 

36 — Option  Contracts. 


§  1211  LAW  OF  OPTION  CONTRACTS  562 

The  lease  furnishes  the  consideration  to  support 
the  option  to  purchase.-  Like  any  other  contract, 
specific  performance  of  an  option  in  the  lease  is 
not  a  matter  of  right.  The  right  to  such  relief  rests 
in  the  sound  discretion  of  the  court.^  The  effect 
of  the  election  is  to  end  the  lease  and  to  entitle 
the  lessee  to  specific  performance.^  Where  a  cov- 
enant in  a  lease  to  renew  operated  as  a  material 
inducement  to  its  execution,  it  is  not  a  unilateral 
agreement,  or  nudum  pactum,  but  a  substantial 
part  of  the  contract.^  The  contract  to  sell  and  pur- 
chase becomes  a  mutual  obligation  upon  acceptance 
by  the  lessee.^ 

The  rule  of  mutuality  applies  to  an  option  in  a 
lease  as  it  does  to  all  contracts  the  specific  perform- 
ance of  which  is  sought.  When,  therefore,  the 
executory  contract  for  the  possession  and  devel- 
opment of  oil  lands  leaves  it  optional  with  the  lessee 
whether  or  not  he  will  proceed  with  the  contem- 
plated work,  it  is  optional  with  the  lessor,  and 

such  options  when  connected  with  leases,  Murphy  Thompson  &  Co.  v. 
Reid,  125  Ky.  585,  101  S.  W.  964,  966,  31  Ky.  L.  Rep.  176,  10  L.  R.  A. 
(N.  S.)  195,  overruling  Boucher  v.  Van  Buskirk,  9  Ky.  (2  A.  K. 
Marsh)   345. 

1  As  to  "refusals"  to  renew  lease,  see  Sees.  211,  212. 

2  House  V.  Jackson,  24  Ore.  89,  32  P.  1027;  MeCormick  v.  Stephany,  57 

N.  J.  Eq.  257,  41  Atl.  840;  Schroeder  v.  Gemeinder,  10  Nev.  355; 
Bacon  v.  Kentucky  C.  Ry.  Co.,  95  Ky.  373,  25  S.  W.  747,  16  Ky.  L. 
Rep.  77;  see  Sec.  321. 

»  Page  V.  Martin,  46  N.  J.  Eq.  585,  20  Atl.  46. 

4  Newell 's  Appeal,  100  Pa.  513. 

BMonihon  v.  Wakelin,  6  Ariz.  225,  56  P.  735;  Wright  ▼.  Kaynor,  150 
Mich.  7,  113  N.  W.  779 ;  MeCormick  v.  Stephany,  57  N.  J.  Eq.  257, 
41  Atl.  840;  King  v.  Prospect  Point  Fishing  Co.,  (Md.)  94  Atl.  780. 

6  Simon  v.  Schmitt,  118  N.  Y.  S.  326. 


563  SPECIFIC   PERFORMANCE ARBITRATION  §  1212 

specific  performance  will  not  be  granted  at  the  suit 
of  the  lessee  who  has  not  performed/ 

Sec.  1212.  ARBITRATION  CLAUSES.— 
Options,  and  particularly  those  contained  in  leases, 
often  provide  for  the  appointment  of  arbitrators 
or  valuers  to  fix  the  price  to  be  paid  upon  exercise 
of  the  option  to  purchase,  or  the  rental  for  the 
renewed  or  extended  term  of  the  lease.^ 

The  American  rule  on  this  subject  is  that  where, 
in  a  contract  for  the  sale  of  property,  at  a  price 
to  be  fixed  by  appraisers  to  be  chosen  by  the  par- 
ties, the  stipulation  for  appraisers  is  not  a  con- 
dition, nor  the  essence  of  the  agreement,  but  is  sub- 
sidiary or  auxiliary  to  its  main  purpose  and  scope, 
and  where  the  parties  can  not  be  left  or  placed  in 
status  quo,  if  specific  performance  is  denied,  a  court 
of  equity  may  determine  the  price  itself,  or  by  a 

7  Superior  Oil  &  Gas  Co.  v.  Mehlin,  25  Okl.  809,  108  P.  545,  saying-  oil 
and  gas  leases  do  not  enjoy  the  presumptions  usually  indulged  in 
favor  of  ordinary  leases  and  that  the  former  are  construed  most 
strongly  against  the  lessee  and  in  favor  of  the  lessor,  citing  Southern 
Ey.  Co.  V.  FrankUn  &  P.  Ry.  Co.,  96  Va.  693,  32  S.  E.  485,  44  L.  R.  A. 
297;  Huggins  v.  Daley,  99  Fed.  606,  40  C.  C.  A.  12,  48  L.  R.  A.  320; 
Venture  Oil  Co.  v.  Fretts,  152  Pa.  451,  25  Atl.  732;  Berry  v.  Frisbie, 
120  Ky.  337,  86  S.  W.  558,  27  Ky.  L.  Rep.  724;  Kelley  v.  Ohio  Oil 
Co.,  57  Ohio  St.  317,  49  N.  E.  399,  39  L.  R.  A.  765,  63  A.  S.  R.  721; 
Federal  Oil  Co.  v.  Western  Oil  Co.,  121  Fed.  674,  57  C.  C.  A.  428. 

1  Strictly  speaking,  this  proceeding  is  not  an  arbitration;  there  is  no 
dispute  between  the  parties ;  it  is  a  procedure  to  fix  the  price, 
Florida  Yacht  Club  v.  Renfroe,  67  Fla.  154,  64  So.  742;  Dore  v. 
Southern  Pacific  Co.,  163  Cal.  182,  124  P.  817.  Hearings  and  notice 
to  the  parties  would  not,  therefore,  seem  to  be  necessary,  Id. 
Castle  Creek  W.  Co.  v.  City  of  Aspen,  146  Fed.  8,  76  C.  C.  A.  516,  8 
Ann.  Gas.  660;  Cherryvale  Water  Co.  v.  Cherryvale,  65  Kan.  219, 
69  P.  176;  Coles  v.  Peck,  96  Ind.  333,  49  Am.  Rep.  161;  Herman  v. 
Babcock,  103  Ind.  461,  3  N.  E.  142;  Dunnell  v.  Keteltas,  16  Abb.  Pr. 
(N.  Y.)   205. 


§  1212  LAW  OP  OPTION  CONTRACTS  564 

master,  or  by  appraisers  of  its  own  selection,  and 
may  then  enforce  specific  performance.^  But, 
where  the  stipulation  for  appraisers  to  fix  the 

2  In  Town  of  Bristol  v.  Bristol  &  W.  Waterworks,  19  E.  I.  413,  34  Atl. 
359,  32  L.  E.  A.  740,  which  involved  an  option  on  waterworks,  where 
the  city  elected  and  the  optionor  refused  to  sell  or  to  appoint  an 
arbitrator,  the  Court  said:  "The  town  of  Bristol  had  the  right, 
under  the  contract  aforesaid,  to  purchase  the  waterworks  in  question, 
at  a  price  to  be  mutually  agreed  upon  by  the  parties  thereto,  or,  in 
case  of  a  failure  so  to  agree,  to  have  the  price  fixed  by  arbitrators, 
chosen  as  aforesaid.  It  has  elected  to  exercise  said  right.  The 
Bristol  &  Warran  Waterworks,  which  confessedly  stands,  so  far  as 
said  contract  is  concerned,  in  the  shoes  of  said  Norman,  with  the 
same  rights  and  liabilities  which  appertained  to  him,  has  refused 
either  to  agree  upon  a  price  for  said  waterworks  or  to  appoint 
arbitrators  to  fix  the  same.  In  other  words,  it  has  deliberately 
violated  the  express  terms  of  said  contract  in  this  regard;  and  it  is 
suggested  that,  unless  this  court  has  jurisdiction  to  either  compel  a 
specific  performance  thereof  or  to  grant  the  relief  prayed  for,  said 
waterworks  company  may  continue  to  hold  said  property,  and  enjoy 
the  privileges  and  immunities  secured  by  said  contract,  for  the 
remainder  of  the  term  of  fifty  years,  in  continual  violation  of  said 
contract.  But,  however  this  may  be,  we  think  there  is  no  doubt 
as  to  the  jurisdiction  of  this  court  to  grant  the  relief  prayed  for.  Said 
company  having  failed  to  comply  with  the  terms  of  said  contract  in 
the  particulars  aforesaid,  this  court  clearly  has  the  authority  to 
provide  some  means  for  the  fixing  of  the  price  at  which  said  water- 
works shall  be  conveyed  to  said  town,  and  to  order  such  conveyance; 
and  we  think  that  the  regular  and  proper  mode  to  accomplish  this 
object  is  by  first  referring  the  case  to  a  master,  to  ascertain  and 
determine  the  price  at  which  said  works  shall  be  conveyed.  If  the 
case  was  that  of  a  simple  agreement  or  contract  for  the  sale  of 
land  or  other  property  at  a  price  to  be  fixed  by  arbitrators,  where  one 
of  the  parties  had  refused  to  appoint  an  arbitrator,  the  court  prob- 
ably could  not,  upon  the  application  of  the  other  party,  either  fix 
a  price  itself  or  appoint  arbitrators,  for  the  reason  suggested  in 
the  demurrer,  viz:  that  the  contract,  being  simply  for  a  sale  at  a 
price  to  be  fixed  in  a  certain  manner,  the  parties  could  not  be  com- 
pelled either  to  sell  or  buy  at  a  price  not  so  fixed.  Such  is  the 
English  doctrine.  Milnes  v.  Gery,  14  Ves.  400 ;  Wilks  v.  Davis,  3  Met. 
507;  Vickers  v.  Vickers,  L.  R.  4  Eq.  529.  The  same  rule  has  been 
followed  in  this  country  when  there  have  been  no  circumstances 
to  distinguish  the  case  from  Milnes  v.  Gery,  Pom.  Spec.  Perf .  Cont., 
Sec.  150.  The  cases  of  City  of  Providence  v.  St.  John's  Lodge, 
2  R.  I.  46,  and  Dike  v.  Greene,  4  E.  I.  285,  would  seem  at  first 
blush  to  establish  a  different  rule.     But  in  these  cases  the  contract 


565  SPECIFIC   PERFORMANCE ARBITRATION  §  1212 

price,  or  value,  is  a  condition,  and  not  a  covenant 
merely,  a  court  of  equity  will  not  itself  fix  the  price, 
and   then   enforce   specific   performance,^   unless 

was  to  sell  at  a  price  to  be  fixed  by  appraisement,  with  no  stipula- 
tion as  to  how  the  appraisers  should  be  appointed.  The  Court  held 
in  these  circumstances  that  it  could  itself  appoint  a  master  to  make 
the  appraisal,  and  would  decree  a  specific  performance  at  the  price 
BO  determined.  But,  as  well  stated  hy  complainant 's  counsel,  where 
the  contract  to  sell  does  not  stand  alone,  but  is  merely  a  subsidiary 
part  of  another  contract  for  a  more  extensive  purpose,  the  per- 
formance of  which  has  already  been  entered  upon,  a  different  rule 
prevails.  In  such  a  case  the  courts  hold  that  the  manner  of  determin- 
ing the  price  is  a  matter  of  form,  rather  than  of  substance ;  and  if  it 
becomes  evident  that  it  can  not  be  determined  in  the  manner  provided 
for  in  the  contract,  by  reason  of  the  refusal  of  one  party  to  do 
what  in  equity  he  ought  to  do,  the  court  will  determine  it  upon  the 
application  of  the  other.  Coles  v.  Peck,  96  Ind.  333.  In  other  words, 
if  the  parties  have  incurred  obligations  under  the  contract  so  that 
they  can  not  be  placed  in  statiis  quo,  the  court  will  itself  enforce  the 
agreement. ' ' 

8  In  "Woodruff  v.  Woodruff,  44  N.  J.  Eq.  349,  16  Atl.  4,  1  L.  R.  A.  380, 
it  is  held  the  first  consideration  is  whether  the  provision  for  the 
appointment  of  arbitrators  to  ascertain  the  value  is  a  covenant  or 
condition;  if  it  is  a  covenant,  a  court  of  equity  may  specifically 
enforce  it;  otherwise,  if  it  is  a  condition,  as  the  consequence  of  the 
non-fulfillment  of  the  condition  is  a  forfeiture  of  the  estate  and 
that  the  limit  to  which  a  court  will  go  in  fixing  the  price  is  to 
ascertain  it  when  the  contract  simply  provides  it  shall  be  fair  with- 
out naming  the  arbitrators  or  fixing  the  method  of  their  selection. 

Where  parties  to  an  executory  agreement  for  the  sale  of  goods  agree 
that  the  price  to  be  paid  for  the  property  shall  be  fixed  by  valuers 
appointed  by  them,  there  is  no  contract  of  sale  if  the  persons 
appointed  as  valuers  fail  or  refuse  to  act ;  and  this  is  true  even  where 
one  of  the  parties  to  such  an  agreement  is  the  cause  of  such  failure 
or  refusal,  Elberton  Hardware  Co.  v.  Hawes,  122  Ga.  858,  50  S.  E. 
964.  But  where  the  agreement  has  been  executed  by  delivery  of  the 
goods  and  the  purchaser  does  any  act  which  prevents  their  valuation 
as  the  agreement  provides,  the  vendor  is  entitled,  in  a  proper  action, 
to  recover  the  value  of  the  goods  estimated  by  the  court,  Elberton 
Hardware  Co.  v.  Hawes,  supra. 

Montgomery  Gas  Light  Co.  v.  City  Council,  87  Ala.  245,  6  So.  113, 
4  L.  E.  A.  616,  holding  the  rule  does  not  apply  where  the  thing  to  be 
appraised  is  only  a  minor  part  of  the  subject  matter,  as,  for  instance, 
where  land  is  purchased  at  a  fixed  price,  but  the  contract  of  sale 
also  includes  fixtures  and  such  like,  the  valuation  of  which  is  to  be 
determined  by  third  persons. 


§  1212  LAW  OF  OPTION   CONTRACTS  566 

there  are  facts  and  circumstances  which  entitle 
plaintiff  to  relief  upon  some  other  equitable 
ground. 

Thus,  though  an  option  to  buy  land  provided  that 
the  price  should  be  fixed  by  two  arbitrators,  one  to 
be  appointed  by  each  of  the  parties,  and  if  they 
could  not  agree,  a  third  was  to  be  appointed  by 
the  two,  the  court  fixed  the  price  where  the  two 
arbitrators  were  unable  to  agree  thereon,  or  on  the 
appointment  of  a  third  arbitrator,  it  appearing 
that  the  optionee  entered  into  possession  under  the 
lease  giving  him  the  option  to  purchase  and 
remained  in  possession  and  made  improvements.* 

So,  a  lease  for  a  term  of  years  containing  a  stipu- 
lation that,  at  the  end  of  the  term,  the  lessee  should 
have  the  right  to  purchase  the  land  at  a  price  to  be 
fixed  by  three  disinterested  persons,  one  to  be 
chosen  by  each  party  and  the  third  by  the  two 
chosen,  confers  upon  the  lessee  a  right  of  purchase 
which  a  court  of  equity  will  specifically  enforce, 
where  the  lessor  refused  to  choose  his  appraiser 
and  when,  during  the  term  of  the  lease,  the  lessee 
made  valuable  improvements.^ 

The  optionee  and  the  owner  of  the  legal  title  are 
the  proper  parties  to  select  the  arbitrators,  and, 
when  the  option  so  provides,  a  majority  may  fix 
the  price,  and  the  time  and  manner  of  payment,^ 
but  where  the  submission  is  not  made  under  a 
statute,  nor  under  an  express  agreement  that  a 

4  Eiehardson  v.  Harkness,  59  Wash.  474,  110  P.  9 ;  see  Piggot  v.  Mason, 
1  Paige  (N.  Y.)  412;  Kaufmann  v.  Liggett,  209  Pa.  87,  58  Atl.  129, 
67  L.  R.  A.  353,  103  A.  S.  R.  988,  option  to  renew  lease. 

6  Herman  v.  Babeock,  103  Ind.  461,  3  N.  E.  142. 

6  Florida  Yacht  Club  v.  Eenfroe,  67  Fla.  154,  64  So.  742. 


567  SPECIPIC   PERFORMANCE ARBITRATION  §  1212 

majority  of  the  referees  may  act,  but  pursuant  to 
the  term  of  a  lease  providing  therefor,  in  fixing  the 
price  under  an  option  to  purchase,  an  award  or 
finding  of  two  of  three  referees  is  not  binding."^ 

The  orphan's  court  has  no  jurisdiction  to  exer- 
cise a  power  to  appraise  real  estate  under  a  power 
of  sale  in  a  will  giving  certain  persons  an  option 
to  purchase,  at  the  appraised  value,  where  the 
donee  of  the  power  is  not  named,  but  such  power 
may  be  exercised  by  a  court  of  equity.' 

Where  the  failure  of  a  tenant  to  appoint  an 
appraiser,  within  the  time  stipulated,  to  fix  the 
value  of  the  premises  as  a  basis  of  rental,  was  not 
wilful,  and  it  did  not  appear  that  any  new  rights 
had  intervened,  or  that  the  position  of  the  parties 
had  been  changed  by  the  delay  in  appointing 
appraisers,  or  that  damage  would  result,  while  if 
relief  was  refused,  the  tenant  would  lose  a  valu- 
able building,  and  time  was  not  made  of  the  essence 
of  the  contract,  equity  will  excuse  the  delay  and 
grant  specific  performance  of  the  covenant  to 
renew.® 

7  Washburn  v.  White,  197  Mass.  540,  84  N.  E.  106. 

8  Magin  v.  Niner,  110  Md.  299,  73  Atl.  12,  also  holding  that  where  the 

power  of  sale  does  not  name  the  trustee  to  make  the  sale,  and  the 
executor  is  one  of  the  parties  to  whom  was  granted  the  privilege 
of  purchasing,  at  the  appraised  value,  it  would  be  inequitable  to 
allow  him  to  make  the  appraisement  and  then  take  the  property 
at  such  value. 

»  Simon  v.  Schmitt,  118  N.  Y.  S.  326 ;  Washburn  v.  White,  197  Mass.  540, 
84  N.  E.  106. 
Option  construed  as  requiring  the  optionee  to  take  the  property  at 
the  appraisal,  and  holding  that  the  election  to  purchase  should  be  at 
the  price  to  be  fixed  by  the  arbitrators  and  that  it  could  not  elect 
and  leave  the  price  open  until  fixed  so  as  to  see  whether  it  was 
satisfactory,  Montgomery  Gaslight  Co.  v.  City  Council,  87  Ala.  245, 


§  1213  lav;  of  option  contracts  568 

Sec.  1213.    VALUATION  CLAUSES.  — In  a 

New  Jersey  case,^  a  lease  gave  the  lessee  an  option 
to  purchase  the  premises  "at  the  expiration  of  the 
lease  at  a  fair  valuation  by  appraisement."    The 

6  So.  113,  4  L.  E.  A.  616,  distinguished  in  Farmington  Village  Corp. 
V.  Farmington  W.  Co.,  93  Me.  192,  44  Atl.  609,  holding  under  the 
language  of  the  option  that  the  optionee  could  elect  after  the 
appraisement;  Marino  v.  Williams,  30  Nev.  360,  96  P.  1073,  holding 
lessee  had  right  to  elect  to  renew  after  appraisal. 
9  Duty  of  lessee  where  all  arbitrators  could  not  agree  under  agreement 
requiring  concurrence  of  all,  Washburn  v.  White,  197  Mass.  540, 
84  N.  E.  106,  and  holding  mere  lapse  of  time,  by  lessee,  in  obtaining 
an  award  is  insufficient  to  show  loss  of  his  right  to  hold  the  prop- 
erty as  purchaser,  or  the  possession  thereof,  after  electing. 

Sharkey  v.  Larkin,  52  N.  Y.  623,  rental  value  to  be  determined  by 
arbitration  based  on  value  of  surrounding  land. 

Power  of  appointment  where  one  valuer  refuses  to  act,  Elberton  Hard- 
ware Co.  V.  Hawes,  122  Ga.  858,  50  S.  E.  964. 

Power  to  withdraw  appointment.  Guild  v.  Atchison  etc.  E.  Co.,  57  Kan. 
70,  45  P.  82,  57  A.  S.  E.  312,  33  L.  E.  A.  77. 

The  valuation  or  price  fixed  is  conclusive  in  the  absence  of  fraud, 
Edmonds  v.  Millet,  20  Beav.  54,  52  Eng.  Eeprint  522. 

Eevocation  of  arbitration,  pleading,  Fitzsimmons  v.  Lindsay,  205  Pa. 
79,  54  Atl.  488. 

Qualification  of  and  objection  to  appraisers,  Chicago  Aud.  Ass'n  v. 
Corp.  Fine  Arts  Bldg.,  244  HI.  532,  91  N.  E.  665,  18  Ann.  Cas.  253; 
City  of  Fayetteville  v.  Fayetteville  Water  L.  &  P.  Co.,  135  Fed.  400. 

Agreement  under  which  corporation  sold  stock  with  option  to  pur- 
chase, at  an  appraisal  to  be  made  by  directors,  construed  as  not 
requiring  appraisal  unless  corporation  desired  to  exercise  option, 
Whiton  V.  Batchelder  &  Lincoln  Corp.,  179  Mass.  169,  60  N.  E.  483. 

Provision  in  lease  allowing  lessee  to  have  an  appraisal  of  the  property 
and  an  option  to  purchase  for  a  certain  period  after  the  appraisal, 
is  not  specifically  enforceable  by  the  lessee  because  the  lessor  has 
no  right  to  enforce  specific  performance,  Mutual  Life  Ins.  Co.  v. 
Stephens,  214  N.  Y.  488,  108  N.  E.  856;  see,  also,  Sec.  213. 

1  Lester  Agricultural  Chemical  Works  v.  Selby,  68  N.  J.  Eq.  271,  59  Atl. 
247,  further  holding  that  the  language  of  the  clause  "valuation  by 
appraisement"  did  not  show  it  was  the  intention  of  the  parties 
that  they  should  appoint  their  own  appraisers,  saying  that  appraise- 
ment by  the  court  or  its  officers  was  as  consistent  with  the  words  and 
spirit  of  the  contract  as  any  other  and  that  it  would  interpretate  the 
clause  so  as  to  give  it  effect  rather  than  to  defeat  it. 


569  SPECIFIC   PERFORMANCE VALUATION  §  1213 

lessee  brought  suit  for  specific  performance,  and 
it  was  urged  by  the  lessor  as  a  defense  there  was 
not  sufficient  certainty  as  to  price  to  warrant  a 
decree.  The  court  answered  by  saying,  the  rule 
was  that  where  the  parties  have  agreed  the  land 
shall  be  conveyed,  not  upon  a  price  to  be  agreed 
upon  themselves,  but  at  a  fair  price,  or  at  a  fair 
valuation,  then  the  parties  having  fixed  a  standard 
or  measure  of  value,  without  having  designated 
any  particular  method  of  ascertaining  the  value  or 
price,  the  court  may,  without  making  a  contract, 
ascertain  the  price  according  to  the  standard  fixed 
by  the  contract,  and  then  enforce  the  contract,  and 
added  that  the.mode  of  ascertaining  the  value  con- 
flicts neither  with  the  letter  nor  the  spirit  of  the 
contract. 

The  same  rule  was  laid  down  in  an  Illinois  case.^ 
The  option  to  sell  stipulated  there  should  be  a  fair 
valuation  of  a  portion  of  the  land.  It  was  held  the 
valuation  was  to  be  fixed  at  a  reasonable  estimate 
made  by  the  parties,  if  they  could  agree,  or  if  they 
were  unable  to  agree,  then  by  the  court,  no  means 
of  ascertaining  the  value  of  the  property  being 
pointed  out.  In  another  case,^  a  lease  provided  the 
tenant  should  have  an  option  extending  the  same 
for  another  term  ''unless  the  landlord  shall  pay  a 
fair  price  for  the  building,"  to  be  erected  by  the 

2  Estes  V.  Furlong,  59  111.  298. 

3  Duffy  V.  Kelly,  55  N.  J.  Eq.  627,  37  Atl.  597,  the  court  holding  the  con- 

tract contains  the  exception  to  the  rule  and  quoting  Sir  William 
Grant,  master  of  the  rolls,  in  Milnes  v.  Gery,  14  Ves.  400 :  ' '  The 
case  of  an  agreement  to  sell  at  a  fair  valuation  is  essentially  dif- 
ferent. In  that  case  no  particular  means  of  ascertaining  the  value 
were  pointed  out.  There  is  nothing,  therefore,  precluding  the  court 
from  adopting  any  means  adapted  to  that  purpose. '  * 


§  1214  LAW  OF  OPTION   CONTRACTS  570 

tenant.  In  a  suit  by  the  landlord  for  specific  per- 
formance, after  he  had  elected  to  purchase  the 
building,  it  was  held  the  court  would  fix  the  value  of 
the  property  and  enforce  the  contract. 

Sec.  1214.  MUTUALITY.  MEANING  OF.— 
As  applied  to  contracts  "mutuality"  has  different 
meanings.  There  is  a  mutuality  of  assent,  meaning 
thereby  it  is  essential  to  the  validity  of  a  contract 
that  all  the  parties  in  their  agreement  intended  the 
same  thing.  ^  There  is  a  mutuality  of  engagement, 
or  obligation,  meaning  thereby  that,  in  a  simple 
executory  contract,  each  party  must  be  bound  to 
do  something  under  it,  or,  as  sometimes  otherwise 
stated,  an  obligation  on  each  party  to  do  or  permit 
to  be  done  something  in  consideration  of  the  act  or 
promise  of  the  other  party. ^  There  is  a  mutuality 
of  remedy,  meaning  that  in  a  court  of  equity  one 
party  to  an  executory  contract  can  not  have  specific 
performance  against  the  other  party  imless  the 
former  is  bound  in  such  way  the  latter  can  have 
specific  enforcement  of  the  contract  against  the 
former.* 

Mutuality  of  assent  is  essential  to  the  validity  of 
every  contract.**  It  is  said  mutuality  of  obligation 

1  Cavagnaro  v.  Johnson,  77  N.  J.  Eq.  272,  79  Atl.  686,  affirming  70  Atl. 

995,  74  N.  J.  Eq.  589 ;  German  S.  &  L.  Society  v.  McLellan,  154  Cal. 
710,  99  P.  194;  Phelan  v.  Neary,  22  S.  D.  265,  117  N.  W,  142;  Creecy 
V.  Grief,  108  Va.  320,  61  S.  E.  769. 

2  Cal.  Hirsch  &  Sons  I.  &  E.  Co.  v.  Paragould  &  M.  E,  Co.,  48  Mo.  App. 

173,  127  S.  W.  623. 

8  Vassault  v.  Edwards,  43  Cal.  458 ;  Woodruff  v.  Woodruff,  44  N.  J.  Eq. 
349,  16  Atl.  4,  1  L.  E.  A.  380 ;  Heth  v.  Smith,  175  Mich.  328,  141 
N.  W.  583. 

4  Fetter  on  Equity,  p.  273;  note  1,  supra. 


571  SPECIFIC   PERFORMANCE MUTUALITY  §  1215 

is  not  necessary  in  an  action  at  law  to  recover 
damages,^  but  that  it  is  necessary  in  a  suit  to 
specifically  enforce  a  simple  executory  contract.* 

Sec.   1215.    MUTUALITY.    APPLICATION 
OF  RULE   TO   OPTION   CONTRACTS.— The 

application  to  option  contracts  of  the  rules  requir- 
ing mutuality  of  remedy  and  of  obligation  was 
insisted  on  by  the  courts  in  the  early  development 
of  the  law,  and  since  an  option  contract,  in  virtue 
of  its  very  nature  and  object,  bound  the  optionor 
to  sell,  on  election,  but  did  not  bind,  absolutely,  the 
optionee  to  elect  and,  therefore,  to  buy,  it  was  held 
that,  for  this  reason,  its  specific  enforcement  could 
not  be  had  by  the  optionee  at  the  hands  of  a  court 
of  equity.  In  these  earlier  and  in  some  later 
decisions,  the  presence  of  a  consideration  for  the 
option  was  not  appreciated.  The  real  obstacle  to 
specific  performance,  as  pointed  out,  was  the  rule 
requiring  mutuality  of  obligation  and  of  remedy  to 
exist  at  the  time  of  the  execution  of  the  option  con- 
tract,^ and  since,  as  it  was  thought,  no  such  mutual- 
ity then  existed,  the  option,  like  an  unaccepted 
offer,  was  a  nude  pact.^ 

5  Fetter  on  Equity,  p.  273 ;  see  Dambmann  v.  Lorentz,  70  Md.  380,  17  Atl. 

389,  14  A.  S.  R.  364. 

6  Fetter  on  Equity,  p.  273. 

iDuvall  V.  Myers,  2  Md.  Ch.  401;  Hissam  v.  Parrish,  41  W.  Va.  686, 
24  S.  E.  600,  56  A.  S.  R.  892 ;  Wadick  v.  Mace,  191  N.  Y.  1,  83  N.  E. 
571,  20  L.  E.  A.  (N.  S.)  251. 

2  See  Smith  v.  Reynolds,  8  Fed.  696,  3  McCrary  157;  Burnet  v.  Bisco, 
4  Johns.  (N.  Y.)  235;  Hissam  v.  Parrish,  41  W.  Va.  686,  24  S.  E. 
600,  56  A,  S.  R.  892. 

But  in  an  option  and  like  contracts,  it  is  not  necessary  that  mutuality 
9f  obligation  should  have  existed  at  the  time  the  option  was  made. 


§  1215  LAW  OF  OPTION  CONTRACTS  572 

Other  and  modern  decisions  have  pointed  out  the 
distinction  between  the  option  contract  and  the 
bilateral  contract,  raised  by  an  election  to  purchase. 
The  former  is  not  an  agreement  of  sale  and  pur- 
chase of  the  property  covered  by  the  option ;  it  is  a 
sale,  by  the  owner,  of  the  right  merely,  at  the  elec- 
tion of  the  optionee,  to  buy  the  property;  it  does 
not,  prior  to  election,  bind  him  to  any  obligation 
whatsoever.^ 

In  the  early  development  of  the  law  the  effect  of 
the  election  as  transforming  the  option  contract 
into  a  real  bilateral  contract  was  entirely  over- 
looked or  completely  disregarded. 

Later  on  the  courts  became  concerned  more  with 
the  legality  of  the  transaction  covered  by  the 
option,  and  having  determined  that  the  option  con- 
tract, though  one-sided  in  its  nature,  was  not 
against  public  policy  as  being  speculative,  and 
reaching  the  conclusion  that  an  owner  of  property 
had  as  good  right  to  sell  an  option  on  his  property 

Marie  v.  Garrison,  83  N.  Y.  14;  Naylor  v.  Parker,  (Tex.  Civ.  App.) 
139  S.  W.  93;  Davis  v.  Robert,  89  Ala.  402,  8  So.  114,  18  A.  S.  R. 
126;  Codding  v.  Wamsley,  1  Hun.  (N.  Y.)  585,  4  N.  Y.  Sup.  Ct. 
(4.  Thomp.  &  C.)  49,  affirmed  60  N.  Y.  644. 

8  "  It  is  the  right  of  election  to  purchase  that  has  been  bought  and  paid 
for  and  which  forms  the  basis  of  the  contract  between  the  parties, ' ' 
Pollock  V.  Brookover,  60  W.  Va.  75,  53  S.  E.  795,  6  L.  R.  A.  (N.  S.) 
403. 
* '  The  .  ,  .  option  originally  is  neither  a  sale  nor  an  agreement  of 
sale.  It  is  simply  a  contract  by  which  the  owner  of  property  agrees 
with  another  person  that  he  shall  have  the  right  to  buy  his 
(optionor's)  property  at  a  fixed  price,  within  a  time  certain.  He 
does  not  sell  the  land;  he  does  not  then  agree  to  sell  it,  but  he  does 
then  sell  something,  viz :  the  right  or  privilege  to  buy  at  the  election 
or  option  of  the  other  party,"  Ids  v.  Leiser,  10  Mont.  5,  24  P.  695, 
24  A.  S.  R.  17. 


573  SPECIFIC   PERFORMANCE — MUTUALITY  §  1216 

as  he  had  to  sell  the  property  itself,''  and  that  an 
option  contract,  supported  by  a  consideration,  was 
not  a  nude  pact,  it  only  remained  to  discover  that 
the  contract  which  the  court  was  called  upon  to 
enforce,  and  the  contract,  therefore,  which  must 
have  mutuality,  was  the  two-sided  contract  raised 
by  the  election  and  not  the  one-sided  option. 

The  subject  in  hand  is  one  of  the  most  interesting 
connected  with  the  law  of  options.  Its  presentation 
will  show  the  evolution  of  the  option  contract  from 
what  some  courts  first  thought  was  a  nude  pact,  to 
an  established  and  recognized  form  of  contract, 
which  is  now  used  in  many  of  the  most  important 
commercial  transactions  of  the  day. 

After  pointing  out  the  distinction  between  mutu- 
ality of  obligation  and  of  remedy  and  then  present- 
ing some  of  the  leading  decisions  showing  the 
judicial  evolution  of  the  option  from  a  nude  pact 
to  a  real  contract,  attention  will  be  turned  to  the 
bilateral  contract  raised  by  the  election  and  to  the 
modern  rule  that  such  contracts,  in  proper  cases, 
may  be,  and  quite  uniformly  are,  specifically 
enforced  by  courts  of  equity. 

Sec.  1216.  DISTINCTION  BETWEEN  MUTU- 
ALITY OF  REMEDY  AND  OF  OBLIGATION. 

■ — The  doctrine  of  mutuality  of  remedy  is  peculiar 

4DeRutte  v.  Muldrow,  16  Cal.  505;  Black  v.  Maddox,  104  Ga.  157,  30 
S.  E.  723;  see  Watkins  v.  YouU,  70  Neb.  81,  96  N.  W.  1042;  Johnston 
Y.  Wadsworth,  24  Ore.  494,  34  P.  13. 

The  fonn  of  contract  has  become  of  general  use  and  its  legality  recog- 
nized, George  etc.  Co.  v.  Maxwell,  78  Ohio  St.  54,  84  N.  E.  595,  597. 

To  deny  the  right  to  specific  performance,  upon  election  and  in  a  case 
otherwise  proper,  is  to  deny  the  power  of  making  conditional  con- 
tracts, Corson  v.  Mulvany,  49  Pa.  88,  88  Am.  Dec.  485. 


§  1216  LAW  OF  OPTION   CONTRACTS  574 

to  courts  of  equity.  They  will  not  grant  specific 
performance  of  an  executory  contract,  at  the  suit 
of  one  party,  unless,  at  the  same  time,  the  party 
seeking  such  remedy  may,  in  accordance  with  the 
rules  of  the  court  on  the  subject,  be  compelled 
specifically  to  perform  on  his  part,  at  the  suit  of 
the  other  party.  This  rule  has  to  do  with  the  rem- 
edy merely  and  only.  It  has  nothing  to  do  with 
the  respective  obligations  of  the  parties  under  the 
executory  contract  further  than  what  is  implied 
by  the  rule  that  in  order  to  have  mutual  remedies 
each  party  must,  by  the  terms  of  the  contract,  be 
bound  to  perform  some  act  which  a  court  of  equity 
is  capable  of  specifically  enforcing  at  the  suit  of 
the  other  party.  The  rule,  therefore,  is  founded 
on  a  common  law  contract  containing  stipulations 
by  the  respective  parties  for  the  performance  of 
acts  executory  in  their  nature  which  a  court  of 
equity  may  and  will  specifically  enforce. 

The  expression  ''mutuality  of  obligation'*  means 
an  executory  contract  whose  stipulations  bind  each 
party  to  the  performance  of  some  act  which  in  law 
furnishes  a  consideration  for  the  promise  of  the 
performance  of  some  act  by  the  other  party.  This 
rule  is  not  the  outgrowth,  or  the  development,  of 
equity  jurisprudence.  It  is  a  common  law  rule  pure 
and  simple,  but  it  is  one  which  is  observed  and  fol- 
lowed by  a  court  of  equity  in  the  same  way  as  it 
observes  and  follows  the  rule  of  law,  for  instance, 
requiring  at  least  two  parties  to  conclude  a  valid 
enforceable  contract. 

It  will  be  noticed,  therefore,  that  there  is  a  fun- 
damental distinction  from  the  viewpoint  of  equity 
between  mutuality  of  remedy  and  mutuality  of 


575  SPECIFIC  PERFORMANCE — MUTUALITY  §  1217 

obligation.     This   distinction,   however,   has   not 
always  been  observed  in  the  decisions. 

Sec.  1217.  THE  SAME,  CONTINUED.  THE 
OPTION  CONTRACT.— To  obtain  a  better  con- 
ception of  mutuality  of  obligation  and  its  relation 
to  the  equitable  rule  of  mutuality  of  remedy,  take, 
for  example,  an  unaccepted  offer  of  a  contract. 
By  virtue  of  the  offer  there  is  no  obligation  on  the 
part  of  the  offeree  to  accept,  nor  on  the  part  of  the 
proposer  to  keep  the  offer  open.  There  is  no  con- 
sideration, and  no  binding  stipulation  on  either 
party.  It  is  a  nude  pact ;  there  is  no  mutuality  of 
obligation. 

Take  a  mere  offer  without  consideration,  which 
has  been  properly  and  timely  accepted  before  its 
withdrawal  by  the  proposer.  In  such  case,  agree- 
ment has  been  reached  and  a  real  contract  con- 
cluded. The  contract  is  not  a  nude  pact  because  the 
effect  of  the  acceptance  is  to  bind  the  proposer  to 
sell  and  the  accepter  to  buy  and  pay  the  price.' 
The  executory  contract  thus  concluded  is  mutual 
in  obligation  and  even  in  the  absence  of  an  original 
consideration  for  the  offer,  there  is  mutuality  of 
remedy  for  its  enforcement  by  the  respective 
parties. 

Take  an  option  contract  supported  by  a  consid- 
eration. In  this  form  of  transaction  the  parties 
have  reached  an  agreement  by  the  terms  of  which, 

1  Smith  V.  Bangham,  156  Cal.  359,  104  P.  689,  28  L.  B.  A.  (N.  S.)  522, 
holding  acceptance  of  the  offer,  before  revocation,  constitutes  a 
valid  and  mutually  binding  contract  from  which  neither  party  can 
recede;  also  Ide  v.  Leiser,  10  Mont.  5,  24  P.  695,  24  A.  S.  R.  17 j 
Black  v.  Maddox,  104  Ga.  157,  30  S.  E.  723;  Brewer  v.  Sowers, 
118  Md.  681,  86  Atl.  228. 


§  1218  LAW  OF  OPTION   CONTRACTS  576 

for  a  consideration,  the  owner  sells  the  option  right 
on  his  property  to  the  other  party.  A  contract  is 
thus  concluded.  This  contract  contains  every  essen- 
tial necessary  to  make  it  a  valid  contract.  It  is 
supported  by  a  consideration,  and  is,  therefore, 
binding  on  the  optionor  to  keep  open  his  promise 
to  sell,  at  the  election  of  the  optionee,  for  the  time 
fixed,  and  it  is  binding  on  the  optionee  to  pay  the 
consideration  for  the  option.  It  is  not,  therefore,  a 
nude  pact.  If  the  optionor  breaches  the  option 
during  its  time  limit,  the  optionee,  without  elec- 
tion, would  have  a  remedy  at  law  for  damages  for 
the  breach.  And  if  the  optionee  fails  to  pay  the 
consideration  for  the  option,  the  optionor  would 
have  his  remedy  at  law  to  recover  the  same.  The 
option  contract,  therefore,  even  during  its  strict 
option  life,  has  mutuality  of  obligation  and  it  has 
also  mutuality  of  remedy,  but  it  should  be  observed, 
if  such  observation  is  necessary,  that  at  law,  mutu- 
ality of  remedy  is  not  necessary  to  the  enfor- 
cibility  of  a  contract.^  The  decisions,  therefore, 
holding  that  an  option  contract  of  the  kind  just 
described  will  not  be  specifically  enforced  in  equity 
because  lacking  in  mutuality,  have  failed  to  appre- 
ciate the  distinctions  pointed  out.^ 

Sec.1218.  same,  CONTINUED.  THE  BI- 
LATERAL CONTRACT.  MUTUALITY  OF 
OBLIGATION  MEANS  CONSIDERATION.— 
This  brings  the  subject  to  the  contract  raised  by 
the  election  of  the  optionee  to  purchase.  In  analogy 

2  Alabama  etc.  Ins.  Co.  v.  Oliver,  82  Ala.  417,  2  So.  445. 

3  See  Hissam  v.  Parrish,  41  W.  Va.  686,  24  S.  E.  600,  56  A.  S.  R.  892. 


577  SPECIFIC  PERFORMANCE — MUTUALITY  §  1218 

to  offers,  the  effect  of  an  election,  timely  and  prop- 
erly made,  is  to  turn  tlie  option  into  a  bilateral 
contract,  and  this  is  true  whether  or  not  the  option 
was  originally  supported  by  a  consideration/  The 
contract  thus  raised  and  now  sought  to  be  spe- 
cifically enforced,  is  not  the  one-sided  option  con- 
tract, but  the  two-sided  bilateral  contract,  in  which 
there  is  mutuality  of  obligation.^  Assuming  an 
election  which  binds  the  optionee  to  purchase,  the 
executory  contract  thus  raised  is  not  a  nude  pact 
and  now,  according  to  what  we  understand  to  be 
the  established  rule  on  the  subject,  the  only  con- 
cern of  a  court  of  equity  is  to  ascertain  and  deter- 
mine whether  the  remedies  of  the  parties,  under 
such  executory  contract,  are  mutual.  And  this 
inquiry  is  limited  to  the  single  question  whether 
or  not  the  act  to  be  performed  by  the  defendant, 
whether  for  the  payment  of  the  money  considera- 
tion, or  for  the  performance  of  some  other  act,  is 
one  which,  in  accordance  with  equitable  principles, 
can  and  should  be  specifically  enforced.^ 

Thus,  take  for  instance  a  California  case,*  in 
which  the  consideration  for  the  land  to  be  con- 
veyed was  personal  services.     The  court  refused 

1  See  note  1,  Sec.  1217. 

2  See  Sec.  1202. 

8  The  fact  that  the  relief  sought  by  the  optionor,  or  vendor,  is  to  enforce 
the  payment  of  money  makes  no  difference.  The  test  is  whether  there 
is  a  remedy  to  enforce  the  respective  rights  of  the  parties  under  the 
contract,  and  not  whether  the  act  to  be  performed  is  the  payment 
of  money,  or  the  performance  of  some  other  act,  see  Morgan  v. 
Eaton,  59  Fla.  562,  52  So.  305. 

4  Cooper  V.  Pena,  21  Cal.  404;   see  Alworth  v.  Seymour,  42  Minn.  526, 
44  N.  W.  10.30;  King  v.  Gildersleeve.  79  Cal.  504,  21  P.  961;  Kenni- 
cott  v.  Leavitt,  37  111.  App.  435 ;  Heth  v.  Smith,  175  Mich.  328,  141 
N.  W.  583. 
37 — Option  Contracts. 


§  1218  LAW  OF   OPTION    CONTRACTS  578 

specific  performance  at  the  suit  of  the  vendee 
because  the  remedy  was  not  mutual.  The  court 
held  it  could  not  compel  the  vendee  to  perform  the 
personal  confidential  services.  The  contract,  how- 
ever, was  not  for  this  reason  a  nude  pact.  The 
vendee  had  a  remedy  at  law  for  damages,  but,  as 
illustrating  the  subject  in  hand,  the  vendee  would 
not  have  been  entitled  to  recover  damages  at  law 
if  the  contract  lacked  mutuality  of  obligation. 

The  preceding  discussion  can  be  siunmarized  by 
saying  that  mutuality  of  obligation  means  merely 
a  contract  that  is  not  nudum  pactum,  or  in  other 
words,  a  contract  supported  by  a  consideration,  or 
in  some  jurisdictions,  a  writing  under  seal.^  And 

4  In  an  agreement  for  exchange  of  lands  when  the  land  to  be  exchanged 

by  one  of  the  parties  is  owned  at  the  time  by  a  third  person,  there 
is  no  mutuality  of  remedy  if  the  land  was  not  acquired  at  the  time 
of  the  suit,  Norris  v.  Fox,  45  Fed.  406. 

5  Naylor  v.  Parker,  (Tex.  Civ.  App.)  139  S.  W.  93. 

The  old  rule  that  want  of  mutuality  of  obligation  and  remedy  is  a 
bar  is  now,  by  modern  decisions,  narrowed  down  to  cases  where  there 
is  no  consideration  to  support  the  option,  Hawralty  v.  Warren,  18 
N.  J.  Eq.  124,  90  Am.  Dec.  613;  Murphy  etc.  Co.  v.  Reid,  125  Ky. 
585,  101  S.  W.  964,  31  Ky.  L.  Eep.  176,  10  L.  E.  A.  (N.  S.)  195, 

"The  doctrine  of  the  earlier  English  and  American  cases  in  which  it 
was  held  that  the  want  of  mutuality  of  obligation  and  remedy 
would  render  the  contract  incapable  of  specific  performance,  has,  by 
more  modern  cases,  been  so  modified  that  optional  agreements  to 
convey  without  any  corresponding  obligation  or  covenant  to  pur- 
chase, will  now  be  specifically  enforced  in  equity,  if  made  upon 
sufficient  and  valuable  consideration,"  or  where  the  option  is  part 
of  a  lease  or  other  contract  which  forms  the  true  consideration  for 
the  option,  Hayes  v.  O'Brien,  149  111.  403,  37  N.  E.  73,  23  L.  R.  A. 
555;  also  Black  v.  Maddox,  104  Ga.  157,  30  S.  E.  723,  725;  Taber  v. 
Dallas  Co.,  101  Tex.  241,  106  S.  W.  332;  Litz  v.  Goosling,  93  Ky. 
185,  19  S.  W.  527,  14  Ky.  L.  Rep.  91,  21  L.  R.  A.  127. 

This  always  was  the  rule,  and  correctly  so,  when  the  option  is  con- 
tained in  a  lease  which  furnishes  the  consideration  for  the  option, 
in  which  case  it  is  held  the  consideration  makes  the  '  *  unilateral  con- 
tract binding  in  equity,"  which  means  that  the  miscalled  mutuality 
of  obligation  is  nothing  more  or  less  than  the  consideration  for  the 


579  SPECIFIC   PEKFORMANCE — MUTUALITY  §  1218 

that  with  reference  to  an  option  contract,  sup- 
ported by  a  consideration,  or  under  seal,  or  an  offer 
without  consideration,  but  timely  and  properly 
accepted,  the  only  additional  requirement  in  this 
respect,  in  a  court  of  equity,  for  specific  perform- 
ance, is  that  there  must  be  mutuality  of  remedy, 
and  that  the  so-called,  or  mis-called,  mutuality  of 
obligation,  in  any  other  sense,  may  be  dismissed 
as  a  play  of  legal  phraseology  and,  of  course,  with- 
out point  or  meaning.® 

Another  distinction  should  be  pointed  out. 
Mutuality  of  obligation,  or  better  the  necessity  for 
a  consideration,  going  as  it  does  to  the  legal  exis- 
tence of  the  executory  contract,  must  necessarily 
arise  concurrently  with  the  making  of  the  contract. 
But  this  is  not  true  of  mutuality  of  remedy.  The 
original  lack  of  mutuality  of  remedy  under  the 
contract,  or  better,  in  the  right  to  specific  perform- 
ance of  the  contract,  does  not  preclude  the  enforce- 
ment of  the  contract  where  such  want  has  been 
removed  at  the  time  the  suit  is  brought,^  and  in 

option.  See  Wolfe  v.  Lodge,  159  Iowa  162,  140  N.  W.  429,  and 
cases  cited,  Hawralty  v.  Warren,  18  N.  J.  Eq.  124,  90  Am.  Dec.  613; 
McCormiek  v.  Stephany,  57  N.  J.  Eq.  257,  41  Atl.  840;  White  v. 
Weaver,  68  N.  J,  Eq.  644,  61  Atl.  25;  In  re  Hunter,  1  Edw.  Ch. 
(N.  Y.)  1. 

6  And  the  same  rule  obtains  with  reference  to  an  option  to  reconvej, 
Peterson  v.  Chase,  115  Wis.  239,  91  N.  W.  687. 

6  Vassault  v.  Edwards,  43  Cal.  458. 

The  correct  rule  is  stated  in  Heth  v.  Smith,  175  Mich.  328,  141  N".  W. 
583,  "To  entitle  a  party  to  specific  performance  there  must  be  a 
valid  contract  and  at  the  time  of  the  institution  of  the  suit  a 
mutuality  of  remedies  and  obligations." 

TSayward  v.  Houghton,  119  Cal.  545,  51  P.  853,  52  P.  44;  citing  Wood- 
ruff V.  Woodruff,  44  N.  J.  Eq.  349,  16  Atl.  4,  1  L.  R.  A.  380 ;  Thurber 
V.  Meves,  119  CaL  35,  50  P.  1063,  51  P.  536;  Vassault  v.  Edwards, 
43  Cal.  458;   see,  also,  Black  v.  Maddox,   104  Ga.   157,  30   S.   E. 


§  1219  LAW  OP  OPTION  CONTRACTS  580 

some  cases,  like  those  of  acquiring  or  perfecting 
title,  at  the  time  of  making  the  decree. 

Sec.  1219.  MUTUALITY.  OLD  RULE. 
COOKE  V.  OXLEY.— The  leading  English  case 
holding  that  an  option  contract  is  not  enforceable, 
is  Cooke  v.  Oxley,  decided  in  1790.^  The  facts  as 
reported  are  these:  A,  having  proposed  to  sell 
goods  to  B,  gave  him  a  certain  time,  at  his  request, 
to  determine  whether  or  not  he  would  buy  them. 
B,  within  the  time,  determined  to  buy  them  and 
gave  notice  thereof  to  A,  and  it  was  held  that  A 
was  not  liable,  in  an  action  on  the  case,  for  not 
delivering  them  because  B  was  not  bound  by  the 
original  contract,  there  being  no  consideration  to 
bind  A.  Lord  Kenyon  said  nothing  could  be 
clearer  than  that,  at  the  time  of  entering  into  the 
contract,  the  engagement  was  all  on  one  side ;  that 

723,  726;  Heth  v.  Smith,  175  Mich.  328,  141  N.  W.  583;  see  note  7, 
Sec.  1206, 

^  Mutuality  of  remedy  required  for  specific  performance  need  not  exist 
prior  to  the  filing  of  the  bill  and  is  a  consequence  of  it,  Ives  v. 
Hazard,  4  R.  I.  14,  67  Am.  Dec,  500.  See  Kentucky  D.  &  W.  Co.  v. 
Blanton,  149  Fed.  31,  80  C.  C.  A.  343,  when  optionor  made  a  con- 
tract for  sale  of  property  and  afterwards  placed  himself  in  a  position 
where  specific  performance  could  be  decreed  against  him. 

1  Cooke  V.  Oxley,  3  T,  R,  653,  100  Eng.  Reprint  785.  This  decision  has 
been  the  subject  of  much  criticism  both  in  this  country  and  in 
England.  See  note  2,  infra,  and  also  Stevenson  v.  McLean,  L.  R. 
6  Q.  B.  Div.  346,  which  says  the  Cooke  decision  affirms  only  that 
the  offerer  is  not  bound  to  wait  till  the  expiration  of  time  limit 
before  withdrawing;  Humphries  v.  Carvalho,  16  East  45,  saying  the 
complaint  in  the  Cooke  case  failed  to  allege  an  election. 

As  further  bearing  on  the  Cooke  decision,  see  Bromley  v.  Jeffereys, 
Prec.  Ch.  138,  2  Vern.  415,  24  Eng.  Reprint  66;  see,  also,  Lawren- 
son  V.  Butler,  1  Sch.  &  Lef.  13;  and  Gillespie  v.  Edmonston,  11 
Humph.   (Tenn.)   553, 


581  SPECIFIC   PERFORMANCE MUTUALITY  §  1219 

the  other  party  was  not  bound  and  that,  therefore, 
the  engagement  was  nudum  pactum. 

It  is  said,  in  a  Massachusetts  case,^  that  Cooke  v. 
Oxley  was  overruled  by  Adams  v.  Lindsell,  1  B.  & 
Aid.  618,  and  is  now  no  longer  regarded  as  author- 
ity, and  further,  that  the  report  of  the  case  is  inac- 
curate in  that,  in  fact,  there  was  no  acceptance. 
The  Massachusetts  case  then  lays  down  the  rule 
that  a  proposition  to  sell  land  at  a  certain  price, 
if  taken  within  a  certain  time,  is  a  continuing  offer 
which  may  be  retracted  at  any  time  before  accep- 
tance ;  but  if  accepted  within  the  time,  and  before 
retraction,  it  may  not  be  retracted,  as  such  offer 
and  acceptance  constitute  a  valid  contract,  the  spe- 
cific performance  of  which  will  be  enforced  by  bill 
in  equity. 

2  Boston  etc.  R.  Co.  v.  Bartlett,  3  Cush.  (Mass.)  224.  The  court  points 
out  that  a  different  doctrine  obtains  in  France,  Scotland,  and  Hol- 
land, saying  it  is  there  held  that  whenever  an  offer  is  made,  granting 
to  a  party  a  certain  time  within  which  he  is  entitled  to  decide 
whether  he  will  accept  it  or  not,  the  party  making  such  offer  is  not 
at  liberty  to  withdraw  it  before  the  appointed  time;  but  whether 
wisely  or  not,  the  common  law  insists  upon  a  consideration,  or  a 
sealed  writing,  in  order  to  obligate  the  optionor  not  to  withdraw 
his  offer  during  the  stipulated  time. 
Following  the  Massachusetts  decision  in  repudiating  Cooke  v.  Oxley, 
see  Black  v.  Maddox,  104  Ga.  157,  30  S.  E,  723,  and  Cooper  v. 
Lansing  Wheel  Co.,  94  Mich.  272,  54  N.  W.  39,  34  A.  S.  R.  341, 
saying  the  doctrine  of  the  Cooke  case  has  been  abated  to  the  extent 
that  if  the  offer,  without  consideration,  is  accepted  before  with- 
drawal, such  offer  and  acceptance  constitute  a  valid  contract;  also 
Ide  V.  Leiser,  10  Mont.  5,  24  P.  695,  24  A.  S.  R.  17. 
Commenting  on  Cooke  v.  Oxley,  Sir  William  Anson  (Anson  on  Contracts, 
2nd  Am.  Ed.,  top  page  34)  says  the  case  turned  on  the  pleadings; 
that  is,  the  declaration  did  not  disclose  a  good  cause  of  action  by 
alleging  a  contract,  and  remarks  that  the  court  not  only  regarded 
Oxley  as  free  to  revoke  his  offer  at  any  time  before  acceptance,  but 
free  to  revoke  it  by  a  mere  sale  of  the  goods  without  notice  (there 
being  no  consideration).   As  to  notice  of  revocation,  see  Sec.  704. 


§§  1220,  1221     LAW  OF  OPTION  CONTRACTS  582 

Sec.  1220.  MUTUALITY.  OLD  RULE.— Bean 

V.  Burbank^  follows  the  Cooke  decision  and  holds 
that  a  contract  in  writing,  conveying  lands  at  a 
fixed  price,  and  within  a  stated  time,  on  payment 
of  a  certain  sum,  where  nothing  was  paid,  or 
agreed  to  be  paid,  by  the  other  party  to  obtain 
the  contract,  is  void,  for  want  of  consideration. 
The  court  ruled  out  an  offer  on  the  part  of  the 
optionee  to  prove  acceptance  and  tender  within  the 
time  fixed.  The  offer,  so  far  as  the  report  of  the 
case  shows,  was  not  withdrawn  prior  to  the  alleged 
acceptance. 

Sec.  1221.  MUTUALITY.  OLD  RULE  MODI- 
FIED. BOUCHER  V.  VAN  BUSKIRK,  AND 
OTHER  KENTUCKY  CASES.^— This  case  was 
made  to  turn  on  the  point  that  the  option  coiitract 
in  the  lease  of  the  premises  lacked  mutuality,  and 
would  not,  therefore,  be  specifically  enforced.  The 
lessee  went  into  possession  of  the  premises,  made 
valuable  improvements,  and  in  time  tendered  the 
option  price  and  demanded  a  deed.  The  court  said 

1  Bean  v.  Burbank,  16  Me.  458,  33  Am,  Dec.  681.  This  case  seems  to 
hold,  like  some  of  its  predecessors,  that  an  option  contract  without 
consideration  in  nudum  pactum,  though  accepted  in  time  and  before 
withdrawal. 
In  Ide  V.  Leiser,  10  Mont.  5,  24  P.  695,  24  A.  S.  E.  17,  it  is  said  the 
decision  in  Boston  etc.  R.  Co.  v.  Bartlett,  3  Gush.  (Mass.)  224,  dis- 
tinguishes Bean  v.  Burbank,  which  seems  to  hold  contrary  to  the 
modern  and  established  rule. 

1  Boucher  v.  Van  Buskirk,  9  Ky.  (2  A.  K.  Marsh)  345.  Followed  in 
Jones  V.  Noble,  66  Ky.  (3  Bush.)  695.  In  the  latter  ease,  however, 
tender  of  the  price  and  election  were  not  in  time.  See,  also,  Butt  v, 
Bondurant,  23  Ky.  421.  As  to  Berry  v.  Frisbie,  see  Sec.  1236,  note  5. 
It  is  said  in  Murphy  etc.  v.  Reid,  infra,  that  the  case  of  Bank  of 
Louisville  v.  Baumiester,  87  Ky.  6,  7  S.  W.  170,  9  Ky.  L.  Rep.  845, 
repudiated  the  principal  of  the  Boucher  decision. 


583  SPECIFIC    PERFORMANCE — MUTUALITY  §  1221 

that  if  both  parties  could  not  have  demanded  exe- 
cution of  the  contract,  neither  should  be  favored. 
This  decision  was  followed  in  Litz  v.  Goosling- 
involving  a  contract  for  the  sale  of  land  which  by 
reason  of  a  termination  clause  was  construed  to  be 
an  option  and  where  it  was  held  such  contract 
could  not  be  specifically  enforced  by  the  vendee  for 
want  of  mutuality.  It  does  not  appear  whether 
there  was  an  election  but  this  seems  to  be  negli- 
gible, as  the  decision  is  made  to  turn  on  the  point 
that  the  option  contract,  lacking  mutuality  of  obli- 
gation, was  nudum  pactum.  A  later  case^  dis- 
tinguishes both  of  the  above  and  other  decisions 
on  the  ground  of  lack  of  consideration  to  support 
the  option,  and  holds  that  an  option  to  purchase 
contained  in  a  lease  of  land  could  be  enforced 
since  the  lease  furnished  the  consideration  for  the 
option.  In  a  still  later  case,^  the  modern  and  estab- 
lished rule  was  laid  down  that  an  option  based  on 
a  valuable  and  sufficient  consideration  could,  in  a 
case  otherwise  proper,  be  specifically  enforced,  and 
further,  that  even  if  the  option  was  without  con- 
sideration, still  if  an  election  was  made  before  the 

2  Litz  V.  Goosling,  93  Ky.   185,  19  S.  W.  527,  14  Ky.  L.  Eep.  91,   21 

L.  R.  A.  127. 

3  Baeon  v.  Kentucky  C.  R.  Co.,  95  Ky.  373,  25  S.  W.  747,  16  Ky.  L.  Eep. 

77,  the  court  says  modern  authorities  have  narrowed  the  doctrine  of 
mutuality  down  to  cases  in  which  there  is  no  other  consideration  and 
that  it  is  now  well  settled  that  an  option  contract  to  convey  or  renew 
a  lease  without  any  covenant  or  obligation  to  purchase  or  accept, 
and  without  any  mutuality  of  remedy  (obligation)  will  be  enforced 
in  equity  if  made  upon  proper  consideration. 

*  Murphy  etc.  Co.  v.  Reid,  125  Ky.  585,  101  S.  W.  964,  31  Ky.  L.  Rep. 
176,  10  L.  R.  A.  (N.  S.)  195,  in  this  case  the  court  said  of  the  Litz 
case,  supra,  that  it  did  not  appear  the  court  considered  the  effect 
of  the  acceptance  of  the  option  during  its  time  and  before  its 
withdrawal  by  the  owners  of  the  land. 


§  1222  LAW  OF  OPTION  CONTRACTS  58i 

option  was  withdrawn,  a  binding  contract  was 
raised  which  a  court  of  equity  would  specifically 
enforce. 

Sec.  1222.    MUTUALITY.    BENEDICT  v. 
LYNCH  AND  OTHER  NEW  YORK  CASES.^ 

— This  case  involved  an  option  to  purchase,  con- 
tained in  a  lease  of  land.  Chancellor  Kent  in  pass- 
ing said  it  had  been  ruled  in  several  cases^  that  a 
bill  for  specific  performance  could  not  be  sustained 
if  the  remedy  was  not  mutual,  or  if  one  party  only 
was  bound  by  the  agreement,  but  that  there  were 
other  cases  in  which  the  agreement  had  not  been 
deemed  within  the  Statute  of  Frauds  and  specific 
performance  had  been  decreed,  when  the  contract 
was  signed  only  by  the  party  to  be  charged,"  and 
that  the  contrary  opinion,  from  the  then  most 
recent  decisions,  appeared  to  be  then  prevailing.* 

In  a  later  case,^  however,  he  remarked  that  from 
a  review  of  the  cases  then  made  by  him,  it  was  too 

1  Benedict  v.  Lynch,  1  Johns.  Ch.  (N.  Y.)  370,  7  Am.  Dee.  484. 

2  Citing  Arniiger  v.  Clark,  Bunb.  Ill;   Bromley  v.  Jeffereys,  Prec.  Ch, 

138,  2  Vern.  415;  24  Eng.  Reprint  66;  Lawrenson  v.  Butler,  1  Sch. 
&  Lef.  13. 

3  Citing  Seton  v.  Slade,  7  Ves.  265 ;  Fowle  v.  Freeman,  9  Ves.  351. 

4  Citing  Champion  v.  Plummer,  5  Esp.  N.  P.  240 ;  Huddleston  v.  Briscoe, 

11  Ves.  592. 

5  Clason  's  Ex  'rs  v.  Bailey,  14  Johns.  484. 

In  the  Matter  of  Hunter,  1  Edw.  Ch.  (N.  Y.)  1,  it  is  said  that  the  case 
of  Parkhurst  v.  Van  Cortlandt,  1  Johns.  Ch.  282,  and  Benedict  v. 
Lynch,  supra,  were  referred  to  as  establishing  the  doctrine  that  lack 
of  mutuality  was  a  bar  to  specific  performance  and  referring  to  the 
Clason  case,  supra,  holds  that  an  option  will  be  specifically  enforced 
in  a  proper  case;  see,  also.  Justice  v.  Lang,  42  N.  Y.  493,  1  Am.  Rep. 
576;  McCrea  v.  Purmort,  16  Wend.  460,  30  Am.  Dec.  103;  Worrall  v. 
Munn,  5  N.  Y.  229,  55  Am.  Dec.  330;  Burnet  v.  Bisco,  4  Johns.  235; 
Jones  V.  Barnes,  94  N.  Y.  S.  695,  105  App.  Div.  287. 


585  SPECIFIC  PERrORMANCE MUTUALITY  §  1222 

well  established  to  be  questioned  that  a  contract, 
though  not  mutual,  would,  in  a  proper  case,  be  spe- 
cifically enforced. 

It  is  pointed  out  in  another  case,^  that  the  rule 
does  not  apply  to  a  contract  for  the  sale  of  land  in 
which  it  is  expressly  stipulated  that  no  action, 
whether  for  specific  performance  or  damages, 
should  be  brought  by  the  vendor  against  the  pur- 
chaser, where  no  such  restriction  was  imposed 
upon  the  purchaser,  and  holding  that  such  a  con- 
tract must  be  mutual  in  its  obligation  and  in  its 
remedy.  The  court  held  this  stipulation  made  the 
contract  unilateral  and  the  effect  of  the  ruling  on 
the  facts  was  to  deny  the  right  of  the  optionee  to 
have  specific  performance,  unless  the  case  can  be 
distinguished,  as  undoubtedly  it  should  be,  and  as 
appears  from  the  decisions  it  was,  distinguished 
on  the  ground  that  the  stipulation  referred  to  was 
inserted  with  knowledge  of  the  rule  requiring 
mutuality  of  remedy  as  a  basis  for  a  suit  of  specific 
performance  of  the  contract,  and  that,  therefore, 
the  vendor  in  relinquishing  the  right  to  this  remedy 
herself,  assumed  that  her  action  in  so  doing  neces- 
sarily i]ivolved  relinquishment  by  the  vendee;  or 
further,  imless  the  case  is  distinguished  as  it  and 
all  other  like  cases  can  be  distinguished,  as  a  con- 
tract signed  by  both  parties.  In  an  option  contract, 
the  effect  of  filing  a  bill  for  its  specific  enforce- 
ment, after  proper  and  timely  election,  binds  the 
optionee,  and  this  gives  mutuality,  meeting  all  the 
requirements  of  the  rule.    In  a  contract  originally 

6  Wadick  v.  Mace,  191  N.  T.  1,  83  N.  E.  571,  2  L.  R.  A.  (N.  S.)  251, 
the  court  also  holding  in  effect  that  the  contract  was  too  vague  and 
indefinite  as  to  boundaries  to  be  specifically  enforceable. 


§  1222  LAW  OF  OPTION  CONTRACTS  58G 

signed  by  both  parties  and  containing  a  stipulation 
like  the  one  involved  in  the  Wadick  case,  which 
has  the  effect  of  relinquishing  or  destroying  mutu- 
ality, the  filing  of  a  bill  can  not  give  mutuality 
because  the  effect  of  the  stipulation  is  to  bar  any 
remedy  at  all  on  the  contract.'^ 

In  Levin  v.  Deitz,^  the  owner  of  premises,  after 
he  and  plaintiff  had  discussed  a  sale  thereof 
with  the  owner's  broker,  who  was  authorized  by 
him  to  sell  the  premises,  wrote  and  signed  a  letter 
addressed  to  plaintiffs  in  which  he  stated  he  would 
mail  deeds  of  the  property  to  certain  brokers,  and 
requiring  plaintiffs  to  be  present  at  a  specified  time 
and  place,  with  the  sum  in  cash,  and  receive  a  deed 
to  the  property.  The  owner  also  wrote  his  broker 
to  the  same  effect.  There  was  no  express  agreement 
on  the  part  of  plaintiffs  to  buy.  Suit  was  brought 
for  specific  performance,  and  it  was  found  by  the 
trial  court  that  plaintiffs  were  present  at  the  time 
and  place  and  on  the  day  mentioned,  and  produced 
and  tendered  the  price,  and  demanded  a  deed  of 
the  premises,  and  that  the  owner,  defendant,  was 
not  then  and  there  present,  and  that  no  deed  to  the 
premises  was  offered  to  plaintiffs.  Judgment  went 
for  plaintiffs  for  specific  performance.    This  was 

'T  Palmer  v.  Gould,  144  N.  Y.  671,  39  N.  E.  378,  381. 

But  the  fact  that  the  option  gave  the  optionee  a  choice  of  election  to 
sue  for  damages  or  for  specific  performance,  while  it  gave  the 
optionor  stipulated  damages,  does  not  preclude  the  optionee  having 
specific  performance,  Solomon  Mier  Co.  v.  Hadden,  148  Mich.  488,  111 
N.  W.  1040,  118  A,  S.  E.  586,  12  Ann.  Cas.  88. 

« Levin  v.  Dietz,  194  N.  Y.  376,  87  N.  E.  454,  20  L.  E.  A.   (N.  S.)   251. 

In  Mutual  Life  Lis.  Co.  v.  Stephens,  214  N.  Y.  488,  108  N.  E.  856,  it 

is  held  that  mutuality  of  remedy  need  not  exist  at  the  inception  of 

the  contract;    lease   for  appraisal  of   the  property   and   option  to 

purchase. 


587  SPECIFIC   PERFORMANCE MUTUALITY  §  1223 

affirmed  by  the  Appellate  Division  and  reversed 
by  the  Court  of  Appeals,  the  court  saying:  ''What- 
ever conflict  and  uncertainty  may  have  been  created 
by  earlier  decisions,  in  comparatively  recent  years 
a  series  of  cases  has  come  to  this  court,  fina.lly  lead- 
ing up  to  that  of  Wadick  v.  Mace  (cited  supra), 
whereby  it  has  been  finally  and  firmly  established 
that  specific  performance  of  a  unilateral  contract 
will  not  be  adjudged  against  the  party  who  has  exe- 
cuted it  on  behalf  of  the  opposite  party,  who  is 
not  in  any  manner  bound  by  the  contract." 

The  above  is  undoubtedly  a  correct  statement  of 
the  rule  as  applied  to  a  unilateral  contract,  that  is, 
an  offer  lacking  acceptance,  or  an  option  lacking 
election.  The  court  having  reached  the  conclusion 
that  plaintiff's  presence  at  the  appointed  time  and 
place  and  his  tender  and  demand  for  a  deed  were 
not  an  acceptance,  it  necessarily  followed  that  no 
binding  contract  was  raised  and  that,  consequently, 
there  was  lack  of  mutuality  and  that,  in  such  case, 
the  mere  filing  of  a  bill  for  specific  performance 
would  not  bind  the  purchaser  or  give  mutuality  to 
the  contract. 

Sec.  1223.  MUTUALITY.  OLD  RULE  MODI- 
FIED. GRAYBILLV.BRAUGH^  AND  OTHER 
VIRGINIA  CASES.— This  case  involved  a  writ- 

1  GraybiU  v.  Braugh,  89  Va.  895,  17  S.  E.  558,  21  L.  E.  A.  133,  37  A. 
S.  R.  894,  it  also  appearing  that  the  wife  of  the  optionor  did  not 
Bign  the  option  contract  and  refused  to  join  in  the  deed  so  as  to 
release  her  dower  interest,  the  court  holding  that  in  such  case  it 
would  not  decree  specific  performance  unless  plaintiff  was  willing  to 
pay  the  full  price  and  accept  the  husband's  deed  alone. 
To  the  same  effect  as  the  Graybill  case,  see  Wood  v.  Dickey,  90  Va. 
160,  17  S.  E.  818. 


§  1223  LAW  OF  OPTION  CONTRACTS  588 

ten  option  for  the  purchase  of  land,  without  con- 
sideration, and  expressly  provided  that  there 
should  be  no  obligation  on  the  optionee  to  purchase 
*' unless  within  the  period  of  said  ten  months  (the 
option  time)  he  pays  one-third  of  the  purchase 
money. ' ' 

It  was  held  plaintiff  was  not  entitled  to  specific 
performance,  but  it  is  not  clear  whether  the  deci- 
sion was  placed  on  the  ground  of  lack  of  consider- 
ation, or  lack  of  mutuality,  or  on  the  erroneous 
notion  that  an  option  is  ''not  such  an  interest  in 
the  subject  (land)  of  which  a  purchaser  for  value 
was  bound  to  notice,  or  which  equity  will  regard, ' ' 
the  optioned  property  having  been  purchased  by  a 
third  party  during  the  life  of  the  option  time  with 
notice  of  plaintiff's  outstanding  option.  The  court 
remarked,  however,  that  plaintiff's  ''bill  should 
have  been  dismissed  in  the  Circuit  Court  for  want 
of  mutuality  of  obligation  in  the  option  sued  on. 
It  professes  to  bind  one  of  the  parties  absolutely 
and  stipulates  only  for  the  indefinite  pleasure  of 
the  other ;  and  it  can  not,  therefore,  be  specifically 
enforced." 

In  a  subsequent  case  from  the  same  court,^  it  is 
said  the  ruling  in  the  Graybill  case,  supra,  to  the 
effect  that  an  option  contract  would  not  be  enforced 
in  equity  because  one-sided  and  lacking  mutuality, 
was  practically  overruled  in  Central  Land  Com- 
pany V.  Johnson^  and  Ciunmins  v.  Beavers,^  and 

2  Watkins  v.  Robertson,  105  Va.  269,  54  S.  E.  33,  115  A.  S.  B.  880,  5 
L.  R.  A.  (N.  S.)  1194. 

8  Central  Land  Co.  v.  Johnson,  95  Va.  223,  28  S.  E.  175. 

4  Cummins  v.  Beavers,  103  Va.  230,  48  S.  E.  891,  106  A.  S.  R.  881,  1  Ann. 
Gas.  986. 


589  SPECIFIC  PEKFORMANCE — MUTUALITY  §  1224 

the  rule  is  there  laid  down  that  if  the  option  is 
supported  by  a  valuable  consideration,  or  is  evi- 
denced by  a  writing  under  seal,  and  is  accepted 
within  the  specified  time,  equity,  in  a  case  otherwise 
proper,  will  grant  specific  performance  at  the  suit 
of  the  optionee. 

Sec.  1224.  MUTUALITY.  OPTIONS  AND 
OFFERS.  MODERN  AND  ESTABLISHED 
RULE.  GENERALLY.— The  cases  reviewed  in 
the  preceding  sections,  touching  mutuality,  show 
a  tendency,  in  the  early  development  of  the  law, 
to  denounce  option  contracts  upon  various  grounds 
and  it  is  for  this  reason  these  cases  have  been  pre- 
sented at  some  length.  It  is  proposed  to  collect 
the  numerous  decisions  of  courts  of  the  various 
states,  holding  that  an  option  contract  supported 
by  a  consideration,  or  in  some  jurisdictions,  evi- 
denced by  a  sealed  writing,  or  contained  in  a  lease 
or  other  contract  furnishing  a  consideration  to 
support  the  option  therein,  is  not  a  nude  pact,  not- 
withstanding that,  prior  to  election  thereunder,  it 
does  not  bind  the  optionee  to  purchase  and 
notwithstanding  some  decisions  holding  to  the  con- 
trary. It  will  appear  from  a  perusal  of  the  deci- 
sions to  be  cited  that,  at  the  present  day,  the  option 
contract  is  not  unfavorably  looked  upon  as  form- 
erly it  was  by  the  courts  of  some  jurisdictions,  and 
that  where  the  optionee,  under  the  option  contract, 
properly  and  seasonably  elects,  the  case  being 
otherwise  proper,  specific  performance  will  be 
granted  of  the  contract  thus  raised  by  the  election. 
And,  further,  that  the  same  rules  obtain  with  ref- 
erence to  offers,  or  options  not  under  seal,  or  not 


§  1225  LAW    OF    OPTION    CONTRACTS  590 

supported  by  a  consideration,  where  the  offer  or 
option  is  properly  and  seasonably  accepted  before 
its  withdrawal  by  the  proposer  or  optionor.^ 

Sec.  1225.  MUTUALITY.  MODERN  AND 
ESTABLISHED  RULE.  ALABAMA.  ARKAN- 
SAS.— In  Moses  v.  McClain,^  the  optionee  sought 
specific  performance  of  the  following  option:  ''For 
and  in  consideration  of  the  sum  of  $1  in  hand  paid, 
I  hereby  give  A.  J.  Moses  an  option  on  my  lands 
and  improvements,  situated  near  Sheffield  and 
known  as  my  'Home  Place,'  containing  125  acres 
more  or  less,  for  the  sum  of  $8000,  to  be  paid,  'say 
$3000  cash  and  balance  in  one  or  two  years,  with 

1  Boston  etc.  R.  Co.  v.  Bartlett,  3  Gush.  (Mass.)  224;  Walter  G.  Reese 
Co.  V.  House,  162  Cal.  740,  124  P.  442;  Brewer  v.  Sowers,  118  Mel. 
681,  86  Atl.  228;  MeCowen  v.  Pew,  18  Cal.  App.  302,  123  P.  191; 
Wilcox  V.  Cline,  70  Mich.  517,  38  N.  W.  555;  Frank  v.  Stratford- 
Handcock,  13  Wyo.  37,  77  P.  134,  110  A.  S.  R.  963,  67  L.  R.  A.  571; 
Western  Sec.  Co.  v.  Atlee,  (Iowa)  151  N.  W.  56;  Carter  v.  Love,  206 
HI.  310,  69  N.  E.  85;  see  Donahue  v.  Potter  &  George  Co.,  63  Neb. 
128,  88  N.  W.  171;  Goodman  v.  Spurlin,  131  Ga.  588,  62  S.  E.  1029; 
Abel  V.  Gill,  95  Neb.  279,  145  N.  W.  637;  TidbaU  v.  Challburg,  67 
Neb.  524,  93  N.  W.  679;  Schroeder  v.  Gemeinder,  10  Nev.  355; 
Murphy  T.  &  Co.  v.  Reid,  125  Ky.  585,  101  S.  W.  964,  31  Ky.  L. 
Rep.  176,  10  L.  R.  A.  (N.  S.)  195. 
But  of  course  if  not  timely  accepted  it  lacks  mutuality  and  will  not  be 
specifically  enforced  at  the  suit  of  either  party,  Sprague  v.  Schotte, 
48  Ore.  609,  87  P.  1046 ;  see  Mers  v.  Franklin  Ins.  Co.,  68  Mo.  127 ; 
Weaver  v.  Burr,  31  W.  Va.  736,  8  S.  E.  743,  3  L.  R.  A.  94;  Litz  v. 
Goosling,  93  Ky.  185,  19  S.  W.  527,  14  Ky.  L.  Rep.  91,  21  L.  R.  A. 
127 ;  Crandall  v.  WilHg,  166  HI.  233,  46  N.  E.  755. 

1  Moses  V.  McClain,  82  Ala.  370,  2  So.  741;  citing  Wilks  t.  Georgia  Pac. 

R.  Co.,  79  Ala.  180. 
The  Moses  case  was  followed  and  approved  in  Ross  v.  Parks,  93  Ala. 

153,  8  So.  368,  11  L.  R.  A.  148,  30  A.  S.  R.  47,  and  in  principle  in 

Taylor  v.  Newton,  152  Ala.  459,  44  So.  583 ;  see  also  Linn  v.  McLean, 

80  Ala.  360. 
The  same  rule  obtains  in  Arkansas,  Meyer  v.  Jenkins,  80  Ark.  209, 

96  S.  W.  991. 


591  SPECIFIC    PERFORMANCE — MUTUALITY  §  1226 

interest  from  date  of  possession,  money  to  be  paid 
when  titles  are  approved.     This  option  good  for 
two  days.   (Signed)  J.  W.  McClain."  It  appeared 
the  optionor  was  a  married  man  and  was  residing 
on  the  optioned  property  with  his  wife  as  a  home- 
stead.   The  optionee  timely  elected  to  purchase. 
The  optionor  refused  to  convey  on  the  ground  that 
his  wife  would  not  consent  to  join  in  the  execution 
of  a  deed  of  conveyance.   The  optionee  then  gave 
notice  of  his  willingness  to  accept  the  deed  of  the 
optionor  alone,  but  the  optionor  still  refused  to 
convey  and  the  optionee  brought  suit  for  specific 
performance.    The  defense  was  want  of  mutuality 
in  that  the  optionee  had  not  bound  himself  by 
writing  to  purchase.  The  court  said  mutuality  was 
one  of  the  conditions  of  a  rightful  suit  for  specific 
performance,  but  that  the  decisions  did  not  go  to 
the  length  contended  for;  that  where  the  contract 
is  fair,  just,  and  reasonable  in  all  its  parts,  and 
the  party  sought  to  be  charged  has  so  bound  him- 
self as  to  meet  the  requirements  of  the  Statute  of 
Frauds,  the  election  of  the  optionee  to  treat  the 
contract  as  binding  upon  him  and  to  enforce  it  met 
the  requirements  of  the  ride. 

Sec.  1226.  MUTUALITY.  MODERN  AND 
ESTABLISHED  RULE.  CALIFORNIA.  COL- 
ORADO.— Hall  V.  Center,^  involved  an  option  con- 

1  Hall  V.  Center,  40  Cal.  63 ;  see  Vassault  v.  Edwards,  43  Gal.  458,  Statute 
of  Frauds,  citing  Cooper  v.  Pena,  21  Cal.  404 ;  also  DeEutte  v.  Mul- 
drow,  16  Cal.  505,  (Lease  and  Option)  ;  Calanchini  v.  Branstetter, 
84  Cal.  249,  24  P.  149;  Sayward  v.  Houghton,  119  Cal.  545,  51  P. 
853,  52  P.  44,  (stock)  ;  Smith  v.  Bangham,  156  Cal.  359,  104  P.  689, 
28  L.  R.  A.  (N.  S.)  522;  Walter  G.  Reese  Co.  v.  House,  162  Cal.  740, 
124  P.  442. 


§  1227  LAW  OF  OPTION  CONTRACTS  592 

tract  executed  by  the  predecessors  of  plaintiff  and 
defendant  respectively,  by  the  terms  of  which  they 
agreed  to  establish  the  boundary  line  between  their 
lands,  by  a  survey,  and  give  to  each  of  the  parties 
the  privilege  of  purchasing  the  land  of  the  other 
lying  on  his  side  of  the  true  line  to  be  established 
by  the  survey.  The  survey  was  made  and  the  line 
established  and  plaintiff  elected  to  purchase  the 
land  of  the  defendant  lying  as  aforesaid  and  ten- 
dered him  the  value  of  the  land.  Defendant  refused 
to  convey  and  plaintiff  brought  suit  for  specific 
performance.  One  of  the  defenses  was  that  the 
contract  was  not  mutual  and,  therefore,  could  not 
be  enforced.  The  court  said  the  rule  undoubtedly 
was  that  a  contract  to  be  specifically  enforced  must 
be  mutual,  but  that  there  were  exceptions  and  one 
of  them  was  that  a  contract  for  the  sale  of  real 
estate,  at  the  option  of  the  vendee  only,  upon  elec- 
tion and  notice,  may  not  only  be  enforced,  but  the 
refusal  of  the  vendor  to  accept  the  purchase  money 
did  not  destroy  the  mutuality,  though  the  vendee 
could  thereupon  withdraw  his  election. 

Sec.  1227.  MUTUALITY.  MODERN  AND 
ESTABLISHED  EULE.  GEORGIA.  ILLI- 
NOIS.— In  Sims  v.  Lide,^  the  defendant,  in  con- 
sideration of  $5  agreed  to  make  plaintiff  a  good  and 
sufficient  title  to  certain  land,  upon  condition  that 

1  Gordon  v,  Darnell,  5  Colo.  302,  holding,  however,  that  if  there  is  no 
consideration  to  support  the  option,  it  is,  until  timely  and  properly 
elected,  a  nude  pact. 

I  Sims  V.  Lide,  94  Ga.  553,  21  S.  E.  220 ;  see,  also,  Black  v.  Maddox,  104 
Ga.  157,  30  S.  E.  723 ;  Simpson  v.  Sanders,  130  Ga.  265,  60  S.  E.  541 ; 
Goodman  v.  Spurlin,  131  Ga.  588,  62  S.  E.  1029;  Perry  v.  Paschall, 
103  Ga.  134,  29  S.  E.  703. 


593  SPECIFIC  PERFORMANCE MUTUALITY  §  1227 

plainti:ff  paid  Mm  a  certain  sum  within  a  fixed 
time.  The  price  was  duly  and  timely  tendered,  but 
defendant  refused  to  convey  and  plaintiff  brought 
suit  for  specific  performance.  The  question  arose 
on  demurrer  to  the  bill,  alleging  lack  of  mutuality 
and  want  of  consideration.  The  court  held  to  the 
general  and  established  rule  that  a  contract  under 
seal  by  A  to  convey  land  to  B,  provided  such  pay- 
ment was  made  within  a  certain  time,  was,  if  sup- 
ported by  a  consideration  of  $5,  actually  paid  at 
the  time,  obligatory  on  A,  upon  the  election  of  B 
to  purchase  and  tender  of  the  price  for  the  prop- 
erty, and  in  such  case  there  was  no  want  of  mutu- 
ality ;  that  both  parties  were  bound  absolutely  and 
specific  performance  would  be  enforced  at  the 
instance  of  B. 

The  same  rule  is  observed  and  followed  in  Illi- 
nois. In  Hayes  v.  O  'Brien,^  involving  an  option  to 
purchase,  contained  in  a  lease,  it  is  said  the  doctrine 
of  the  early  English  and  American  cases,  in  which 
it  was  held  that  want  of  mutuality  of  obligation  and 
remedy  would  render  the  contract  incapable  of 
specific  enforcement,  has,  by  more  modern  cases, 
been  so  modified  that  optional  agreements  to  con- 
vey, without  any  corresponding  obligation  or  cov- 
enant to  purchase,  will  now  be  specifically  enforced 
in  equity  if  made  upon  sufficient  and  valuable 
consideration. 

2  Hayes  v.  O'Brien,  149  HI.  403,  37  N.  E.  73,  23  L.  E.  A.  555;  see,  also, 
Perkins  v.  Hadsell,  50  HI.  216;  Estes  v.  Furlong,  59  HI.  298;  Cran- 
dall  V.  Willig,  166  HI.  233,  46  N.  E.  755 ;  Guyer  v.  Warren,  175  HI. 
328,  51  N.  E.  580;  Adams  v.  Peabody  Coal  Co.,  230  HI.  469,  82  N.  E. 
645;  Corbett  v.  Cronkhite,  239  HI.  9,  87  N.  E.  874;  Seyferth  v. 
Groves  etc.  E.  E.  Co.,  217  HI.  483,  75  N.  E.  522. 
38 — 'Option  Contracts. 


§  1228  LAW    OF    OPTION    CONTRACTS  594 

Sec.  1228.  MUTUALITY.  MODERN  AND 
ESTABLISHED  RULE.  INDIANA.  IOWA. 
KANSAS.  LOUISIANA.  MARYLAND.— Souf- 
frain  v.  McDonald.^  A  leased  a  certain  tract  of 
land  to  B  and  C  for  a  term  of  years  and  gave  them 
therein  an  option  to  purchase  the  leased  lands  for 
a  certain  consideration.  They  elected  and  other- 
wise performed  their  part  of  the  lease  and  the 
option  agreement,  and  demanded  a  deed  of  convey- 
ance. The  defendant  refusing,  plaintiff  brought 
suit  for  specific  performance,  and  it  was  held  that 
upon  election  and  tender  there  arose  a  binding  con- 
tract to  convey  which  a  court  of  equity  would 
enforce.  The  court  saying,  it  was  well  settled  that 
an  option  contract  to  convey,  or  to  renew  a  lease, 
without  any  covenant  or  obligation  to  purchase, 
or  accept,  and  without  any  mutuality  of  remedy, 
will  be  enforced  in  equity  if  it  is  made  upon  proper 
consideration,  or  forms  part  of  the  lease  or  other 
contract  between  the  parties,  that  may  be  treated 
as  a  consideration  for  it. 

The  same  rule  obtains  in  lowa,^  Kansas,'  Louisi- 
ana,^ and  Maryland.^ 

1  Souffrain  v.  McDonald,  27  Ind.  269 ;  see,  also,  Herman  v.  Babcock,  103 

Ind.  461,  3  N.  E.  142;  Hamilton  v.  Hamilton,  162  Ind.  430,  70  N.  E. 
535;  Fowler  UtUities  Co.  v.  Gray,  168  Ind.  1,  79  N.  E.  987, 
(injunction). 

2  Goodpaster  v.  Porter,  11  Iowa  161;  Western  Sec.  Co.  v.  Atlee,  (Iowa) 

151  N.  W.  56. 

sChadsey  v,  Condley,  62  Kan.  853,  62  P.  663;  Quinton  v.  Mulvane,  71 
Kan.  687,  81  P.  486. 

4  Whitting,  Succession  of,  121  La.  501,  46  So.  606,  15  Ann.  Cas.  379. 

•  Stansbury  v.  Fringer,  11  Gill.  &  J.  (Md.)  149;  Maughlin  v.  Perry,  35 
Md.  352 ;  Thomas  v.  Gottlieb  etc.  Brewing  Co.,  102  Md.  417,  62  Atl. 
633;  Dambmann  v.  Lorentz,  70  Md.  380,  17  Atl.  389,  14  A.  S.  R. 
364,  (action  for  damages  for  non-delivery  of  goods). 


595  SPECIFIC  PERFORMANCE — MUTUALITY  §  1229 

Sec.  1229.  MUTUALITY.  MODERN  AND 
ESTABLISHED  EULE.  MASSACHUSETTS. 
— In  O'Brien  v.  Boland/  the  written  offer  to  sell 
was  under  seal.  There  was  no  consideration  other 
than  that  imported  by  the  seal.  The  offer  was  con- 
ditioned upon  acceptance  within  ten  days.  Two 
days  after  making  the  offer,  the  defendant  (ven- 
dor), in  writing,  withdrew  it.  Plaintiff  (pur- 
chaser), notwithstanding  the  withdrawal,  accepted 
the  offer,  which  acceptance  was,  of  course,  within 
the  stipulated  time.  Defendant  refused  to  convey 
and  plaintiff  brought  suit  for  specific  performance. 
The  defendant  contended  that  because  he  could  not 
have  compelled  plaintiff  to  buy  before  the  accept- 
ance, there  was  want  of  mutuality,  which  should 
defeat  the  bill.  Answering  this  contention,  the 
Supreme  Court  said  it  specifically  enforced  con- 
tracts assented  to  by  both  parties  and  further  acted 
upon  by  plaintiff,  even  when  he  had  given  only  a 
verbal  assent,  and,  but  for  the  offer  in  his  bill, 
could  not  be  held  to  performance  on  his  part,  the 
court  holding  that  because  the  offer  was  under  seal, 
it  was  an  irrevocable  covenant,  conditional  upon 
acceptance  within  ten  days,  and  that  the  writ- 
ten acceptance  within  that  time  made  it  a  mutual 
contract,  which  plaintiff  could  have  specifically 
enforced. 

1  O'Brien  v.  Boland,  166  Mass.  481,  44  N.  E.  602.  The  court  said  it 
was  not  necessary  to  discuss  wliether  it  would  specifically  enforce  a 
contract  upon  which  the  plaintiff  had  not  acted,  except  to  give  a 
mere  assent  which  would  not  enable  the  defendant  to  enforce  the 
contract  against  plaintiff.  See,  also,  Mansfield  v.  Hodgdon,  147  Mass. 
304,  17  N.  E.  544;  Boston  etc.  Ey.  Co.  v.  Eose,  194  Mass.  142,  80 
N.  E.  498;   Boston  etc.  Ey.  Co.  v.  Bartlett,  3  Gush.    (Mass.)    224. 


§  1230  LAW  OF  OPTION  CONTRACTS  596 

Sec.  1230.  MUTUALITY.  MODERN  AND 
ESTABLISHED  EULE.  MICHIGAN.  MINNE- 
SOTA. MISSOURI.  MONTANA.  NEBRASKA. 
NEVADA.  NORTH  DAKOTA.  NEW  MEXICO. 

— The  option  to  purchase  land,  in  Solomon  Mier 
Co.  V.  Hadden/  recited  a  consideration  of  $1  and 
its  receipt  by  the  optionor,  and  provided  that  if  the 
optionor  failed  or  refused  to  convey,  the  optionee 
could  specifically  enforce  the  contract,  or,  at  his 
option,  recover  damages  against  the  optionor,  with 
interest  and  attorney's  fees,  and  further  provided, 
that  the  optionee  could  refuse  to  purchase  the  land, 
and  if  he  did  so,  he  should  forfeit  and  pay  to  the 
optionor,  with  interest  and  attorney's  fees,  the  sum 
of  $1,  which  should  constitute  the  only  liability 
on  his  part.  Plaintiff  duly  and  timely  elected  and 
defendant  refused  to  convey.  Referring  to  the 
alleged  want  of  mutuality  in  the  contract,  the  court 
said  that  an  option  for  the  purchase  of  land  based 
on  a  valuable  consideration  is  valid,  and  will  be 
specifically  enforced,  and  that  there  was  no  want  of 
mutuality  in  the  right  of  specific  enforcement 
because  the  optionee,  by  the  express  terms  of  the 
contract,  was  given  the  right  to  maintain  a  suit  for 
specific  performance  or  an  action  for  damages. 
The  courts  in  Minnesota,^  Missouri,^  Montana,* 

1  Solomon  Mier  Co.  v.  Hadden,  148  Mich.   488,   111  N.  W.   1040,   118 

A.  S.  E.  586,  12  Ann.  Cas.  88;  see,  also,  Gustin  v.  Union  School 
Dist.,  94  Mich.  502,  54  N.  W.  156,  34  A.  S.  E.  361;  Agar  v.  Streeter, 
183  Mich.  600,  150  N.  W.  160;  Wilcox  v.  Cline,  70  Mich.  517,  38 
N.  W.  555. 

2  First  Nat'l  Bank  v.  Corp.  Sec.  Co.,  128  Minn.  341,  150  N.  W.  1084. 

3  Warren  v.  Costello,  109  Mo.  338,  19  S.  W.  29,  32  A.  S.  E.  669;  Mers  v. 

Franklin  Ins.  Co.,  68  Mo.  127. 

4  Ide  V.  Leiser,  10  Mont.  5,  24  P.  695,  24  A.  S.  E.  17. 


597  SPECIFIC  PERFORMANCE — MUTUALITY  §  1231 

N'ebraska,^  Nevada,®  North  Dakota/  and  New 
Mexico*  all  hold  to  the  general  rule  exhibited  by 
the  preceding  and  following  decisions  to  the  effect 
that  an  option  to  purchase  land  supported  by  a 
valuable  consideration,  duly  and  timely  elected, 
will  be  specifically  enforced  at  the  suit  of  the 
optionee  as  against  the  objection  of  want  of 
mutuality. 

Sec.  1231.  MUTUALITY.  MODERN  AND 
ESTABLISHED  RULE.  NEW  JERSEY.— The 
early  case  of  Hawralty  v.  Warren^  laid  down  the 
rule  that  a  one-sided  or  unilateral  contract  binding 
one  party  to  convey  lands  and  not  binding  the  other 
party  to  purchase  is  not  favored  in  equity  and  will 
not  be  specifically  enforced,  if  without  considera- 
tion, but  if  the  contract  is  part  of  a  lease,  or  is  one 
made  at  the  same  time  with  it  and  in  consideration 
of  the  lease,  it  will  be  specifically  enforced,  and, 
after  reviewing  and  commenting  upon  numerous 
decisions  of  the  courts,  said  the  old  rule  that  want 
of  mutuality  of  obligation  and  remedy  is  a  bar  to 
specific  performance  had,  by  modern  authorities, 
narrowed  the  doctrine  down  to  contracts  in  which 
there  i"s  no  consideration  to  support  the  option 

6  Bigler  v.  Baker,  40  Neb.  325,  58  N.  W.  1026,  24  L.  E.  A.  255;  Donahue 
V.  Potter  &  George  Co.,  63  Neb.  128,  88  N.  W.  171 ;  Tidball  v.  Chall- 
burg,  67  Neb.  524,  93  N.  W.  679;  Abel  v.  GiU,  95  Neb.  279,  145 
N.  W.  637. 

6  Sehroeder  v.  Gemeinder,  10  Nev.  355. 

7  Beddow  v.  Flage,  22  N.  D.  53,  132  N.  W.  637. 

8  Borel  V.  Mead,  3  N.  M.  84,  2  P.  222. 

1  Hawralty  v.  Warren,  18  N.  J.  Eq.  124,  90  Am.  Dee.  613 ;  Page  v. 
Martin,  46  N.  J.  Eq.  585,  20  Atl.  46;  Waters  v.  Bew,  52  N,  J,  Eq. 
787,  29  Atl.  590. 


§  1232  LAW    OF    OPTION    CONTRACTS  598 

privilege.  Following  this  decision  is  Houghwout  v. 
Boisaubin,^  holding  that  an  offer,  or  proposal,  by 
one  party  to  another,  unsupported  by  a  considera- 
tion, is  a  nude  pact,  but  if  timely  and  properly 
accepted  will,  notwithstanding  lack  of  considera- 
tion, be  specifically  enforced.  In  a  later  case,^  it 
was  held  that  the  general  rule  that  equity  will  not 
specifically  enforce  the  performance  of  a  contract, 
where,  from  its  terms,  a  right  does  not  arise  in 
favor  of  each  party  against  the  other,  and  where 
either  -party  is  not  entitled  to  the  equitable  remedy 
of  specific  execution  of  such  obligation  against  the 
other  contracting  party,  had  been  so  modified  that 
if  the  quality  originally  lacking  be  subsequently 
supplied,  the  enforcement  of  the  contract  may  be 
made  possible. 

Sec.  1232.  MUTUALITY.  MODERN  AND 
ESTABLISHED  RULE.  NORTH  CAROLINA. 
OHIO.  OREGON.— In  Bryant  Timber  Co.  v.  Wil- 
son,^ speaking  of  an  option  to  purchase  growing 
timber,  the  court  said  that  if  the  defendants  had 

2  Hough wout  V.  Boisaubin,  18  N.  J.  Eq.  315;  Eichards  v.  Green,  23  N.  J. 
Eq.  536;  see,  also.  Cutting  v.  Dana,  25  N.  J.  Eq.  265;  ReTnolds  v. 
O'Neil,  26  N.  J.  Eq.  223. 
Miller  v.  Cameron,  45  N.  J.  Eq.  95,  15  Atl.  842,  1  L.  R.  A.  554,  suit 
by  optionor  against  optionee  who  signed  agreement,  the  optionor 
not  signing. 

8  Woodruff  V.  Woodruff,  44  N.  J.  Eq.  349,  16  Atl.  4,  1  L.  R.  A.  380,  the 
point  made  was  that  the  covenant  gave  plaintiff  the  right  (option) 
to  repurchase  the  property  but  did  not  provide  that  he  must  do  so. 
See  Cohen  v.  Pool,  (N.  J.)  94  Atl.  37. 

1  Bryant  Timber  Co.  v.  Wilson,  151  N.  C.  154,  65  S.  E.  932 ;  also  Alston 
V.  Connell,  140  N.  C.  485,  53  S.  E.  292;  Trogden  v.  Williams,  144 
N.  C.  192,  56  S.  E.  865,  10  L.  E.  A.  (N.  S.)  867;  Hardy  v.  Ward, 
150  N.  C.  385,  64  S.  E.  171. 


599  SPECIFIC  PERFORMANCE MUTUALITY  §  1233 

withdrawn  the  option  or  offer  to  sell  before  its 
unconditional  acceptance,  there  being  no  valnable 
consideration  for  it,  they  would  have  exercised  an 
unquestioned  right,  for  without  a  valuable  consid- 
eration to  support  it,  the  agreement  would  be  a 
mere  nudum  pactum,  and  might  have  been  with- 
drawn at  any  time;  that  until  the  proposal  is 
accepted,  there  can  be  no  contract,  as  there  is 
nothing  by  which  the  proposer  can  be  bound,  and 
unless  both  are  bound  so  that  an  action  can  be 
maintained  against  the  other  party  for  the  breach, 
neither  will  be  bound;  but  after  an  unconditional 
acceptance,  there  is  a  valuable  consideration  to 
support  the  contract;  it  then  becomes  mutual  and 
the  voluntary  proposal  of  one  becomes  the  binding 
obligation  of  both ;  that  contracts  of  this  character 
in  respect  to  land,  when  unconditionally  accepted, 
have  been  very  generally  enforced  by  courts  of 
equity  and  specific  performance  decreed. 

In  Ohio^  it  is  held  that  the  option  contract  has 
become  of  general  use  in  the  business  world,  and 
if  there  ever  was  any  ground  for  denjdng  the  legal 
validity  of  such  contracts,  they  have  been  too  often 
recognized  as  valid  to  justify  serious  doubt  now; 
that  such  a  contract  is  not  necessarily  void  for  lack 
of  mutuality,  and  where  accepted  within  the  time 
specified,  may  become  a  valid  and  enforceable 
contract. 

In  Oregon'  it  is  said  the  decided  cases  show  that 
the  rule  as  to  mutuality  is  clearly  circumscribed 
by  numerous  limitations,  and  that  a  conditional  or 

2  George  etc.  Brewing  Co.  v.  Maxwell,  78  Ohio  St.  54,  84  N.  E.  .595. 

*  Johnaton  v.  Wadsworth,  24  Ore.  494,  34  P.  13,  option  to  sell.   See  House 
V.  Jackson,  24  Ore.  89,  32  P.  1027,  lease  and  option. 


§  1233  LAW  OF  OPTION  CONTRACTS  600 

unilateral  contract  may  fall  within  these  excep- 
tions; that  the  principle  is  well  settled  that  when 
the  owner  of  land  gives  another,  for  a  sufficient 
consideration,  an  option  or  privilege  to  purchase 
land,  within  a  given  time,  in  writing,  with  full 
knowledge  of  the  fact  that  he  is  bound  and  the 
other  party  is  not,  it  is  such  a  contract  as  will  be 
enforced  in  equity  at  the  instance  of  the  party  hold- 
ing the  option. 

Sec.  1233.  MUTUALITY.  MODERN  AND 
ESTABLISHED  RULE.  PENNSYLVANIA. 
RHODE  ISLAND.  SOUTH  CAROLINA.  TEN- 
NESSEE.— The  validity  of  an  option  contract  was 
early  recognized  in  Pennsylvania,  the  court  hold- 
ing that  in  a  case  otherwise  proper,  the  specific 
performance  of  an  option  contract  for  the  purchase 
of  land  would  be  granted,  saying  that  to  assert  that, 
upon  election  or  acceptance,  the  optionor  is  not 
bound,  is  to  deny  the  power  of  making  conditional 
contracts,  since  the  election  or  acceptance  is  not 
the  initiation  of  a  new  contract,  but  the  exercise  of 
a  right  under  a  stipulation  on  which  an  old  con- 
tract rests,  and  that,  therefore,  the  mutuality  aris- 
ing upon  election  is  not  destroyed  by  the  refusal 
of  the  optionor  to  convey.^ 

The  decisions  of  Rhode  Island,^  South  Carolina,* 
and  Tennessee*  are  in  accord  with  the  general  rule 

1  Corson  v.  Mulvany,  49  Pa.  88,  88  Am.  Dee.  485.    See  Kerr  v.  Day,  14 

Pa.  112,  53  Am.  Dec.  526;  Smith's  Appeal,  69  Pa.  474. 

2  Ives  V.  Hazard,  4  E.  I.  14,  67  Am.  Dec.  500. 

8  McSwain  v.  Davis,  96  S.  C.  165,  80  S.  E.  87. 

4  Bradford  v.  Foster,  87  Tenn.  4,  9  S.  W.  195;  Cherry  v.  Smith,  22  Tenn. 
19,  39  Am.  Dec.  150. 


601  SPECIFIC  PERFORMANCE MUTUALITY  §  1234 

that  upon  timely  and  proper  election  to  purchase, 
the  option  is  changed  into  a  contract  of  sale  binding 
upon  the  optionor  to  convey,  and  gives  the  optionee 
such  right  as  will  enable  him  to  maintain  a  suit  for 
specific  performance. 

Sec.  1234.  MUTUALITY.  MODERN  AND 
ESTABLISHED  RULE.  VIRGINIA.  WEST 
VIRGINIA.  WASHINGTON.  WISCONSIN. 
WYOMING.    FEDERAL    DECISONS.— In 

Rease  v.  Kittle,^  it  is  said  that  the  peculiarity  of  an 
option  contract  which  makes  it  anomalous  and 
sometimes  difficult  to  construe,  is  the  want  of  mutu- 
ality of  remedy;  that  the  distinction,  however, 
between  want  of  mutuality  of  remedy  and  lack  of 
mutuality  in  the  contract  must  not  be  overlooked ; 
that  in  the  option  the  privilege  of  purchasing  is 
bought  and  paid  for ;  that  the  option  contract,  but 
not  the  contract  of  purchase  of  the  land,  is  fully 
performed  by  the  optionee,  that  is,  executed  on  the 
side  of  the  optionee,  and  needs  no  remedy  for  its 
enforcement,  but  is  executory  and  unperformed  on 
the  other  side  and  may  be  enforced.  It  is  then 
pointed  out  that,  strictly  speaking,  the  court  does 
not  enforce  the  option  but  rather  the  contract  of 
sale  which  grows  out  of  the  option  and  to  the  per- 
formance of  which  the  optionee  has  been  able  to 
bind  the  optionor  by  reason  of  the  option  contract 
and  that,  consequently,  where  the  optionee  timely 
and  properly  elects  and  tenders,  where  tender  is 

lEease  v.  Kittle,  56  W.  Va.  269,  49  S.  E.  150;  see,  also,  Donnally  v. 
Parker,  5  W.  Va.  301;  Barrett  v.  McAllister,  33  W.  Va.  738,  11 
S.  E.  220;  Watson  v.  Coast,  35  W.  Va.  463,  14  S.  E.  249;  Pollock  v. 
Brookover,  60  W.  Va.  75,  53  S.  E.  795,  6  L.  E.  A.  (N.  S.)  403; 
Fulton  V.  Messenger,  61  W.  Va.  477,  56  S.  E.  830. 


§  1235  LAW   OF   OPTION    CONTRACTS  602 

necessary,  a  completed  contract  of  sale  is  made 
which  is  enforceable  in  equity. 

A  contract  by  the  terms  of  which  the  owners  of 
capital  stock  in  a  corporation  agree  to  sell  it,  at 
the  end  of  three  years,  with  an  option  to  the  pur- 
chaser to  call  it  at  any  time,  is  not  invalid  for  want 
of  mutuality  because  one  party  has  an  option  which 
the  other  party  has  not.^ 

In  Washington,^  the  rule  is  stated  that  an  option 
to  convey  land  or  renew  a  lease,  without  any  cov- 
enant or  obligation  to  purchase  or  accept,  and 
without  any  mutuality  of  remedy,  will  be  enforced 
in  equity  if  it  is  made  upon  proper  consideration, 
or  forms  part  of  a  lease  or  other  contract  between 
the  parties  that  may  be  the  true  consideration  for 
it,  and  the  same  rule  applies  to  a  provision  in  a 
contract  for  the  sale  of  land  to  re-convey  to  the 
vendor,  for  a  certain  sum,  if  and  when  the  pur- 
chaser concludes  to  sell,*  and  also  to  a  straight 
option  to  purchase.^ 

The  decisions  of  the  federal  courts  are  in  accord 
with  the  modern  and  established  rule.^ 

2Sedclon  v.  Rosenbaum,  85  Va.  928,  9  S.  E.  326,  3  L.  R.  A.  337;  see 
Carter  v.  Hook,  116  Va.  812,  83  S.  E.  386. 

8  Conner  v.  Clapp,  42  Wash.  642,  85  P.  342 ;  Frank  v.  Stratf  ord-Hand- 
cock,  13  Wyo.  37,  77  P.  134,  110  A.  S.  R.  963,  67  L.  R.  A.  571. 

4  Peterson  v.  Chase,  115  Wis.  239,  91  N.  W.  687. 

6  Wall  V.  Minn.  etc.  Ry.  Co.,  86  Wis.  48,  56  N.  W.  367 ;  Cheney  v.  Cook, 
7  Wis.  413. 

6  Frank  v.  Schnuettgen,  187  Fed.  515,  109  C.  C,  A.  281;  Marthinson  v. 
King,  150  Fed.  48,  82  C.  C.  A.  360;  Waterman  v.  Waterman,  27 
Fed.  827;  Johnston  v.  Trippe,  33  Fed.  530;  Watts  v.  Kellar,  56  Fed. 
1,  5  C.  C.  A.  394;  Mathews  Slate  Co.  v.  New  Empire  Slate  Co.,  122 
Fed.  972;  Couch  v.  McCoy,  138  Fed.  696;  Hoogendorn  v.  Daniel,  178 
Fed.  765,  102  C.  C.  A.  213;  Willard  v.  Tayloe,  8  Wall.  (U.  S.)  557, 
19  L.  Ed.  501. 


603-  SPECIFIC  PERFORMANCE — MUTUALITY  §1235 

Sec.  1235.  MUTUALITY.  MISCELLANEOUS 

CASES. — Smith  v.  Reynolds^  involved  an  option 
or  a  title  bond  on  a  mine  by  the  provisions  of  which 
the  owners  bound  themselves  to  convey  upon  cer- 
tain payments  being  made  within  a  certain  time. 
The  suit  was  for  specific  performance.  It  does  not 
appear  whether  or  not  there  was  an  election.  The 
optionor  sold  the  property  to  a  third  person  before 
the  expiration  of  the  option  time.  Specific  per- 
formance was  denied.  The  decision  seems  to  be 
placed  on  the  ground  that  there  was  no  considera- 
tion and  that,  therefore,  the  agreement  was  invalid. 

By  an  instrument  signed  by  both  parties,  A 
granted  to  R  the  privilege  of  taking  and  moving 
ore  from  certain  of  his  land,  at  a  certain  price  per 
ton,  with  the  privilege,  also,  of  building  houses, 
etc.,  thereon,  the  materials  to  be  taken  from  A's 
land  at  R's  expense.  It  was  held  that  such  an 
agreement  was  merely  the  privilege  of  taking  ore ; 
that  it  imposed  no  obligation  on  R;  and  that  A 
could  not  compel  R  to  work  the  ore  and,  since  the 
agreement  contained  no  mutual  engagement,  it 
could  not  be  specifically  enforced  by  A.^ 

Where  a  contract  was  signed  by  the  owner  only 
and  provided  that  within  a  certain  time  he  would 
take  a  specified  price  for  the  mineral  interest  and 
upon  receipt  of  such  price  would  make  title,  the 
contract,  among  other  things,  stating  that  the 
vendee  bound  himself  to  make  such  tests  as  were 

1  Smith  V.  Reynolds,  8  Fed.  696,  3  McCrary  157 ;  see  Maynard  v.  Brown, 
41  Mich.  298,  2  N.  W.  30,  optional  with  vendor  to  convey  or  not; 
Jenkins  v.  Locke,  3  App.  D.  C.  485. 

2Geiger  v.  Green,  4  Gill.  (Md.)  472;  Gelston  v.  Sigmund,  27  Md.  334, 
turned  on  the  uncertainty  in  the  term  of  the  lease-option. 


§  1236  LAW   OF    OPTION    CONTRACTS  604 

satisfactory  to  himself,  it  was  held  that  the  con- 
tract was  not  mutual  and  binding  on  all  of  the 
parties  and  specific  performance  would  not  be 
decreed  against  the  proposed  purchaser.* 

Sec.  1236.  MUTUALITY.  SUMMARY  OF 
DECISIONS.  ELECTION  RAISES  CON- 
TRACT HAVING  MUTUALITY  OF  OBLIGA- 
TION, AND,  AS  A  RULE,  MUTUALITY  OF 
REMEDY. — The  cases  reviewed  in  the  preceding 
sections  hold  that  an  unaccepted  offer  is  a  nude 
pact  and,  therefore,  has  neither  mutuality  of  rem- 
edy nor  of  obligation;  that  an  option  is  an  offer 
supported  by  a  consideration  or  a  writing  under 
seal;  and  that  the  effect  of  a  consideration  is  to 
prevent  withdrawal  of  the  offer  by  the  proposer 
during  the  time  limit.  The  consideration  has  the 
effect  of  transforming  the  nude  pact  offer  into  a 
real  contract,  and  it  is  this  feature  that  prevents 
withdrawal  during  the  stipulated  time.  The  recog- 
nition of  this  principle  of  law,  however,  does  not 
do  away  with  the  necessity  of  accepting  the  offer, 
or  electing  under  the  option,  in  order  to  raise  it  to 
a  bilateral  contract/ 

The  rule  to  be  deduced  from  the  decisions  is  that 
the  presence  or  absence  of  a  consideration  is  neg- 
ligible in  those  cases  where  the  offer  or  option  is 

3  Peacock  v.  Deweese,  73  Ga.  570.  This  case  and  the  Geiger  case,  supra, 
involve  the  rule  that  the  option  is  not  enforceable  against  the 
optionee  in  the  absence  of  his  election.  In  other  words,  there  is  no 
mutuality  in  any  sense  without  election. 
In  Perry  v.  Paschal,  103  Ga.  134,  29  S.  E.  703,  it  is  pointed  out  that 
in  the  Peacock  case  there  was  no  consideration  and  the  optionee  was 
not  in  possession  as  tenant  but  as  licensee. 

1  See  Sees.  801,  871. 


605  SPECIFIC  PERFORMANCE MUTUALITY  §  1236 

accepted  before  its  withdrawal,  and  that  where  the 
option  is  supported  by  a  consideration,  an  election 
within  the  option  time  is  just  as  effective  as  in 
the  former  case,  notwithstanding  an  attempted 
withdrawal  by  the  optionor.  The  effect  in  both 
cases  is  the  same  in  that  a  bilateral  contract  is 
raised.  With  reference  to  the  effect  of  an  election 
from  the  standpoint  of  mutuality  of  remedy,  the 
contract  raised  by  the  election  stands  upon  the 
same  footing  as  if  the  parties  had  made  it  in  that 
form  in  the  first  instance,^  and  whether  or  not  it  has 
that  mutuality  of  remedy  which  will  entitle  the 
optionee  to  specific  performance,  must  be  deter- 
mined entirely  and  exclusively  from  a  consideration 
of  the  fact  whether  or  not  the  act  to  be  performed 
by  the  optionee  is  one  which  a  court  of  equity,  at 
the  time  of  filing  the  bill,  could  and  would  specif- 
ically enforce  at  the  suit  of  the  defendant. 

The  above  statement  is  made  on  the  assiunption 
that  the  form  of  the  election  is  such  as  to  bind  the 
optionee  to  performance,  or  is  made  so  by  filing  a 
bill,  or  otherwise,  the  case  being  otherwise  proper 
for  specific  performance.^ 

2  See  Gilbert  v.  Port,  28  Ohio  St.  276. 

3  PoUoek  V.  Brookover,  60  W.  Va.  75,  53  S.  E.  795,  6  L.  E.  A.  (N.  S.) 

403;  Fnie  v.  Houghton,  6  Colo.  318;  Chadsej  v.  Condley,  62  Kan. 
853,  62  P.  663;  Laning  v.  Cole,  4  N.  J.  Eq.  229;  Naylor  v.  Parker, 
(Tex.  Civ.  App.)  139  S.  W.  93;  Vassault  v.  Edwards,  43  Cal.  458; 
Bacon  v.  Kentucky  C.  Ry.  Co.,  95  Ky.  373,  25  S.  W.  747,  16  Ky. 
L.  Eep.  77 ;  Yerkes  v.  Eichards,  153  Pa.  646,  26  Atl.  221,  34  A.  S  E. 
721;  Central  L.  Co.  v.  Johnson,  95  Va.  223,  28  S,  E.  175;  Borel  v. 
Mead,  3  N.  M.  84,  2  P.  222. 
Eefusal  of  optionor  to  accept  the  consideration  tendered  by  optionee 
on  election  does  not  destroy  the  mutuality,  Corson  v.  Mulvany,  49  Pa. 
88,  88  Am.  Dec.  485. 


§  1236  LAW   OP   OPTION    CONTRACTS  606 

The  only  apparent  exceptions  to  this  rule  which 
have  come  to  our  attention  are  those  few  and  pecu- 
liar cases,  so  to  speak,  where  the  mutuality  of 
remedy  has  been  surrendered  or  destroyed,  or  may, 
by  notice  or  otherwise,  be  destroyed,  by  virtue  of 
the  express  provisions  of  the  contract  itself,"*  or, 
where  the  effect  of  the  election  made,  is  merely  to 
give  to  the  optionee  the  right,  say,  to  explore  for 
oils  and  minerals,  or  drill  oil  wells  during  a  fixed 
period  after  the  exercise  of  the  option  rights, 
without  imposing  any  obligation  on  him  to  do  so, 
in  which  case,  notwithstanding  the  election,  the 
contract  would  still  lack  that  mutuality  necessary 
to  entitle  the  optionee  to  specific  performance,  for 

4  See  See.  1222,  notes  3  and  4,  also  Litz  v.  Goosling,  93  Ky.  185,  19 
S.  W.  527,  14  Ky.  L.  Eep.  91,  21  L.  R.  A.  (N.  S.)  127;  Rutland 
Marble  Co.  v.  Ripley,  77  U.  S.  339,  19  L.  Ed.  955;  So.  Express  Co. 
V.  Western  N.  C.  R.  R.  Co.,  99  U.  S.  191,  25  L.  Ed.  319;  Rust  v. 
Conrad,  47  Mich.  449,  11  N.  W.  265,  41  Am.  Rep.  720;  Appeal  of 
Real  Estate  T.  I.  &  T.  Co.,  125  Pa.  549,  17  Atl.  450,  11  A.  S.  E.  920 ; 
see  Sec.  117. 

Whether  clause  for  liquidated  damages  will  prevent  specific  perform- 
ance depends  on  intent  of  the  parties  as  to  whether  it  was  intended 
to  secure  performance  or  give  an  election  to  refuse  to  perform  and 
pay  the  damages.  Brown  v.  Norcross,  59  N.  J.  Eq.  427,  45  Atl.  605; 
Koch  V.  Streuter,  218  HI.  546,  75  N.  E.  1049,  2  L.  R.  A.  (N.  S.)  210; 
Black  V.  Maddox,  104  Ga.  157,  30  S.  E.  723 ;  Wright  v.  Suydam,  72 
Wash.  587,  131  P.  239;  Davis  v.  Isenstein,  257  Dl.  260,  100  N.  E. 
940 ;  Redwine  v.  Hudman,  104  Tex.  21,  133  S.  W.  426. 

A  contract  giving  the  purchaser  an  option  to  rescind  for  breach  of 
condition,  or  to  waive  the  condition  is  not  lacking  in  the  mutuality 
essential  to  the  right  to  specific  performance.  Catholic  Foreign  Mis- 
sion Soe.  V.  Oussani,  215  N.  Y.  1,  109  N.  E.  80. 

Under  a  contract  providing  that  if  the  prospective  purchaser  failed 
to  carry  out  the  contract,  a  deposit  made  should  be  forfeited  as 
liquidated  damages,  and  the  contract  be  null  and  void,  when  the 
purchaser  elected  to  complete  the  contract,  the  right  to  terminate 
his  obligation  by  forfeiture  of  the  deposit  is  waived  and  the  right 
to  specific  performance  becomes  reciprocal,  Nay  lor  v.  Parker,  (Tex. 
Civ.  App.)  139  S.  W.  93;  see  Sec.  109. 


607  SPECIFIC  PERFORMANCE MUTUALITY  §  1237 

the  rule  is  that  where  it  is  left  to  one  of  the  parties 
to  a  two-sicled  executory  agreement  to  choose 
whether  he  will  perform  or  abandon  it,  neither 
party  can  have  specific  performance  against  the 
other  in  a  court  of  equity^  unless,  of  course,  plain- 
tiff has  performed.* 

Sec.  1237.  MUTUALITY.  SO-CALLED 
EXCEPTIONS  TO  RULE.— It  is  sometimes  said 
there  are  exceptions  to  the  equitable  rule  of  mutu- 
ality. First,  that  of  an  option  to  purchase  land 
supported  by  a  valuable  consideration,  and,  sec- 
ondly, that  of  a  contract  required  by  the  Statute 
of  Frauds  to  be  in  writing.  What  is  meant  by  the 
first  alleged  exception  is  that  the  mere  fact  the 
option  agreement  is  not  enforceable  by  the  optionor 
against  the  optionee  during  the  option  time  limit, 
is  not  a  bar  to  specific  performance,  where  a  proper 

5  See  Berry  v.  Frisbie,  120  Kj.  337,  86  S.  W,  558,  27  K7.  L.  Rep.  724; 

Smith  V.  Guffey,  202  Fed.  106,  120  C.  C.  A.  436 ;  Federal  Oil  Co.  v. 
Western  Oil  Co.,  112  Fed.  373;  Stanton  v.  Singleton,  126  Cal.  657, 
59  P.  146,  47  L.  R.  A.  334;  Eclipse  Oil  Co.  v.  South  Penn.  Oil  Co., 
47  W.  Va.  84,  34  S.  E.  923;  Ulrey  v.  Keith,  237  111.  284,  86  N.  E. 
696;  Watford  O.  &  G.  Co.  v.  Shipman,  233  HI.  9,  84  N.  E.  53. 
See  Redwine  v.  Hudman,  104  Tex.  21,  133  S.  W.  426,  where  specific 
performance  was  granted  upon  failure  of  the  party  to  choose  the 
alternative. 

6  See  Boyd  v.  Brown,  47  W.  Va.  238,  34  S.  E.  907,  oil  and  gas  lease ; 

Carnegie  Natural  Gas.  Co.  v.  South  Penn,  Oil  Co.,  56  W.  Va.  402, 
49  S.  E.  548. 
See  also  Armstrong  v.  Maryland  Coal  Co.,  67  W.  Va.  589,  69  S.  E.  195, 
contract  for  sale  of  mineral  rights  (coal)  in  land,  and  requiring  final 
acceptance  at  specified  date  and  giving  the  optionee  the  right  there- 
after arbitrarily  to  object  to  quality  of  coal,  title,  etc.,  and  provid- 
ing if  the  optionor  failed  to  remove  the  objection  either  party  might 
rescind,  holding  that  when  optionee  accepted  the  contract,  inves- 
tigated the  coal,  etc.,  and  finally  elected  to  take  the  property  and 
called  for  a  deed,  he  waived  the  right  to  interpose  arbitrary  objections 
and  the  vendor  was  entitled  to  specific  execution  of  the  contract. 


§  1237  LAW    OF    OPTION    CONTRACTS  608 

and  timely  election  is  made.    Such  a  contract  does 
not  come  within  the  rule  at  all/ 

The  second  exception  is  one  growing  out  of  the 
Statute  of  Frauds,  requiring  the  subscription  to 
the  contract  by  the  party  sought  to  be  charged,  the 
courts  holding  that  the  party  not  subscribing  may 
have  specific  performance  against  the  party  sub- 
scribing. This  exception  is,  perhaps,  theoretical, 
since  by  filing  his  bill  for  specific  performance  the 
non-subscribing  party  has,  it  is  held,  thereby  sup- 
plied the  mutuality  required  by  the  rule,  for  if 
mutuality  of  remedy  exists  at  that  time,  the  rule  is 
satisfied.^ 

1  The  rule  does  not  apply  when  a  contract  by  its  terms  gives  the  other 

party  a  right  to  performance  which  it  does  not  give  to  the  other. 
See  Van  Doren  v.  Robinson,  16  N.  J.  Eq.  256;  Johnston  v.  Trippe, 
33  Fed.  530;  Frank  v.  Stratford-Handcock,  13  Wyo.  37,  77  P.  134, 
110  A.  S.  R.  963,  67  L.  R.  A.  571;  House  v.  Jackson,  24  Ore.  89, 
32  P.  1027;  First  Nat'l  Bank  v.  Corp.  Sec.  Co.,  128  Minn.  341,  150 
N.  W.  1084. 

Watkins  v.  Robertson,  105  Va.  269,  54  S.  E.  33,  38,  115  A.  S.  R.  880, 
5  L.  R.  A.  (N.  S.)  1194,  holding  the  question  of  mutuality  arises 
only  when  the  bilateral  contract  is  sought  to  be  enforced. 

See  R«ase  v.  Kittle,  56  W.  Va.  269,  49  S.  E.  150,  where  distinction 
between  mutuality  of  remedy  and  of  contract  is  commented  on. 

The  very  purpose  of  an  option  contract  is  to  extinguish  mutuality  of 
right.  Watts  v.  Kellar,  56  Fed.  1,  5  C.  C.  A.  394;  Mathews  Slate  Co. 
V.  New  Empire  Slate  Co.,  122  Fed.  972. 

The  rule  does  not  apply  to  conditional  contracts  like  options.  Weeding 
V.  Weeding,  (1861)  1  John.  &  H.  424,  4  L.  T.  (N.  S.)  616,  9  Wkly. 
Rep.  431,  70  Eng.  Reprint  812;  Chesterman  v.  Mann,  (1851) 
9  Hare  206. 

2  Central  Land  Co.  v.  Johnson,  95  Va.  223,  28  S.  E.  175;  Woodruff  v. 

Woodruff,  44  N.  J.  Eq.  349,  16  Atl.  4,  1  L.  R.  A.  380;  Black  v. 
Maddox,  104  Ga.  157,  30  S.  E.  723;  Naylor  v.  Parker,  (Tex.  Civ. 
App.)  139  S.  W.  93;  Peevey  v.  Haughton,  72  Miss.  918,  17  So.  378, 
48  A.  S.  R.  592;  Estes  v.  Furlong,  59  111.  298;  Ives  v.  Hazard, 
4  R.  I.  14,  67  Am.  Dee.  500;  Matthes  v.  Wier,  (Del.  Ch.)  84  Atl.  878; 
Codding  v.  Wamsley,  4  Thomp.  &  C.  (N.  Y.)  49,  1  Hun.  585. 


609  SPECIFIC   PERFORMANCE — MUTUALITY  §  1237 

There  is  a  further  qualification  of  the  rule  made 
in  some  jurisdictions  where  the  common  law  rights 
of  married  women  are  in  f  orce,^  but  it  would  seem 
that  full  performance,  or  offer  of  performance,  in 
such  cases,  is  necessary  and  if  so,  then  these  cases 
fall  within  the  general  exception  that  the  rule  of 
mutuality  does  not  apply  in  any  case  where  the 
plaintiff  has  performed  or  offers  to  perform  an  act 

2  Miller  v.  Cameron,  45  N.  J.  Eq.  95,  15  Atl.  842,  1  L.  E.  A.  554,  suit  by 
optionor  for  price,  agreement  signed  by  purchaser  only. 

By  filing  his  bill  the  purchaser,  having  tendered,  brings  himself  under 
the  obligation  of  the  contract  and  comes  completely  under  the  power 
of  the  court,  Bride  v.  Eeeves,  36  App,  D.  C.  476. 

"When  the  non-signing  plaintiff  brings  suit  ...  he  binds  himself 
to  abide  by  the  decision  of  the  court  in  chancery  and  so  empowers 
that  court  to  decree  specific  performance  against  him."  Copple  v. 
Aigeltinger,  167  Cal.  706,  140  P.  1073. 

Perry  v.  Paschal,  103  Ga.  134,  29  S.  E.  703,  holding  the  rule  is  firmly 
settled  that  in  equity  for  the  purpose  of  obtaining  specific  execution 
as  well  as  at  law  for  recovering  damages,  the  signature  of  the  party 
who  makes  the  engagement  is  all  that  the  Statute  requires  and  this 
is  put  on  the  additional  ground  that  plaintiff,  by  his  act  of  filing 
the  bill,  has  made  the  remedy  mutual,  and  by  signing  the  bill  the 
agreement  is  evidenced  by  writing. 

The  court  may  not  extend  the  time  to  elect  as  such  act  would  destroy 
the  mutuality,  Pope  v.  Hoopes,  90  Fed.  451,  33  C.  C.  A.  595. 

Supplying  lack  of  mutuality  by  part  payment  on  the  price,  Stevens  v. 
Kittredge,  44  Wash.  347,  87  P.  484;  so  by  tender.  South  Florida 
C.  L.  Co.  v.  Walden,  59  Fla.  606,  51  So.  554;  Thomas  v.  Gottlieb  etc. 
Co.,  102  Md.  417,  62  Atl.  633,  also  holding  the  test  of  mutuality  is 
as  of  date  of  decree,  62  Atl.  636. 

8  Yerkes  v.  Eichards,  153  Pa.  646,  26  Atl.  221,  34  A.  S.  E.  721;  Warren 
V.  Costello,  109  Mo.  338,  19  S.  W.  29,  32  A.  S.  E.  669;  Seager  v. 
Burns,  4  Minn.  141,  (4  Gill.  93)  married  woman  as  plaintiff  in 
possession;  Weidenbaum  v.  Eaphael,  83  N.  J.  Ch.  17,  90  Atl.  683; 
Freeman  v.  Stokes,  12  Phila.  (Pa.)  219;  see  Williams  v.  Graves, 
7  Tex.  Civ.  App.  356,  26  S.  W.  334,  homestead;  Hawes  v.  Favor, 
161  111.  440,  43  N.  E.  1076;  Walker  v.  Owen,  79  Mo.  563,  married 
woman  as  plaintiff;  Tillery  v.  Land,  136  N.  C.  537,  48  S.  E,  824. 
39 — Option  Contracts. 


§  1238  LAW  OF  OPTION  CONTRACTS  610 

which  the  court  can   effectively   enforce  by   its 
decree/ 

The  contract  of  an  infant  with  an  adult  is  also 
made  an  exception,  some  courts  holding  the  infant 
may  have  specific  performance  where  he  has  fully 
performed.  •* 

Sec.  1238.  PEKSONS  ENTITLED  TO  SPE- 
CIFIC PERFORMANCE.  —  A  volunteer  or  one 
who  is  not  within  the  influence  of  the  consideration 
of  the  executory  contract,  or  who  does  not  claim 
through  another  who  is  within  it,  can  not  maintain 
a  bill  to  specifically  enforce  the  performance  of  the 
contract.^  Thus,  A  sold  land  to  B,  receiving  an 
agreement  from  B  to  give  him  the  first  offer  of 
purchase  in  case  of  sale.  B  sold  to  C  by  an  abso- 
lute deed,  and  agreed  verbally  to  give  his  bond  to 
re-convey,  on  receiving  payment  of  a  debt  due  from 
B,  and  he  afterwards  gave  such  bond,  and  it  was 

4  See  decisions  in  next  preceding  note,  and  as  to  general  rule  see  Frue  v. 
Houghton,  6  Colo.  318;  Bigler  v.  Baker,  40  Neb.  325,  58  N.  W.  1026, 
24  L.  E.  A.  255;  Finlen  v.  Heinze,  32  Mont.  354,  80  P.  918,  927; 
Perkins  v.  Hadsell,  50  lU.  216,  making  improvements. 

Whether  upon  mere  assent,  quaere,  O'Brien  v.  Boland,  166  Mass.  481, 
44  N.  E.  602. 

BSee  Seaton  v.  Tohill,  11  Colo.  App.  211,  53  P.  170;  Tillery  v.  Land, 
136  N.  C.  537,  48  S.  E.  824. 
Vassault  v.  Edwards,  43  Gal.  458,  466,  or  after  arriving  at  majority; 
also  noting  married  women  as  an  exception  to  the  rule. 

1  Neves  v.  Scott,  50  U.  S.   196,  13  L.  Ed.  102,  s.  c.  54  U.   S.   268, 
14  L.  Ed.  140. 

Eight  of  one  furnishing  part  of  consideration,  Naylor  v.  Parker,  (Tex. 
Civ.  App.)  139  8.  W.  93. 


611  SPECIFIC  PERFORMANCE — PERSONS  ENTITLED  §  1238 

held  A  was  not  entitled  to  specific  performance  of 
B^s  agreement.^ 

Under  a  statute  providing  that  every  action  must 
be  prosecuted  in  the  name  of  the  real  party  in  inter- 
est, a  real  estate  broker  who  takes  an  option  for 
the  purchase  of  property  in  his  own  name,  but,  as 
a  matter  of  fact,  for  the  benefit  of  a  customer,  to 
whom  he  demands  its  conveyance,  and  having  no 
interest  in  the  contract  beyond  a  contingent  com- 
mission, in  case  a  sale  is  made,  has  no  right  to 
maintain  a  suit  for  specific  performance  of  the 
contract.^ 

An  undisclosed  principal  may  sue  in  his  own 
name  for  the  specific  performance  of  the  contract 
entered  into  by  his  agent,  whether  the  principal 
was  known  or  not  during  the  transaction,  and 
whether  the  owner  supposed  he  was  dealing  with 
the  agent  personally  and  for  his  own  benefit." 

Under  an  option  taken  in  the  name  of  "B  cashier 
of  C  Bank,"  the  suit  was  properly  brought  in  the 
name  of  B  as  the  real  party  in  interest.^ 

One  of  two  joint  optionees  may  maintain  a  suit 
for  specific  performance  without  joining  as  plain- 
tiff the  other  optionee  who  has  repudiated  the 

2  Levering  v.  Fogg,  35  Mass.  540 ;  also  McCarthy  v.  Couch,  37  Minn. 

124,  33  N.  W.  777;  Wait  v.  Wilson,  83  N.  Y.  S.  834,  86  App.  Div.  485. 

But  see  Ward  v.  Ledbetter,  21  N.  C.  496,  where  the  sub-purchaser  from 

the  vendee  paid  the  price  to  the  vendee  who  paid  it  to  the  vendor 

with  notice  and  the  sub-purchaser  was  allowed  specific  performance. 

8  Lawyer  v.  Post,  109  Fed.  512,  47  C.  C.  A.  491 ;  see  Eandolph  v.  Wheeler, 
182  Mo.  145,  81  S.  W.  419. 

4  Kelly  v.  Thuey,  143  Mo.  422,  45  S.  W.  300 ;  also  Forgey  v.  GUbirds, 

262  Mo.  44,  170  S.  W.  1135. 

5  Beddow  V.  Flage,  22  N.  D.  53,  132  N.  W.  637. 


§  1238  LAW  OF    OPTION    CONTRACTS  612 

contract  f  but  one  of  several  optionors  may  not  sue 
for  specific  performance  as  to  his  parcel  after  elec- 
tion by  the  optionee,  where  the  several  parcels 
optioned  b}^  them,  to  his  knowledge,  were  intended 
to  be  purchased  as  a  whole/ 

Upon  the  death  of  the  optionee,  his  executor  or 
legatee  is  the  proper  party  to  file  the  suit.^  But 
the  rule  is  not  uniform  in  the  several  jurisdictions, 
and,  therefore,  the  decisions  of  the  particular  jur- 
isdiction must  be  consulted.® 

An  execution  creditor  of  the  optionee  who  has  not 
elected  is  not  entitled  to  enforce  specific  perform- 
ance of  the  option  purporting  to  have  been  sold 
under  execution/*^ 

Equity  will  not  specifically  enforce  a  contract  in 
favor  of  a  plaintiff  or  a  party  who  has  not  per- 
formed the  stipulations  thereof  on  his  part.  There- 
fore, if  plaintiff  refused  to  purchase,  after  notice 
and  an  opportunity  to  do  so  under  a  ''first  refusal" 
option,  he  is  not  entitled  to  specific  performance,^^ 
or  in  any  other  case  where  he  has  surrendered 
his  option  right,  or  when  the  option  has  been 
discharged.  ^^ 

6  Schaeffer  v.  Herman,  237  Pa.  86,  85  Atl.  94.  In  this  case  the  assignee 
of  the  optionee  plaintiff  was  permitted  to  intervene  and  the  decree 
went  in  favor  of  the  assignee;  see  Gillis  v.  Arringdale,  135  N.  C. 
295,  47  S.  E.  429. 

TVickers  v.  City  of  Baltimore,  102  Md.  487,  63  Atl.  120;  Tillery  v. 
Land,  136  N.  C.  537,  48  S.  E.  824. 

8  MeCormick  v.  Stephany,  57  N.  J.  Eq.  257,  41  Atl.  840. 

9  See  Sec.  606. 

10  Costello  V.  Friedman,  8  Ariz.  215,  71  P.  935. 

11  Cummings  v.  Nielson,  42  Utah  157,  129  P.  619. 

12  See  Sec.  701,  et  seq. 


613  SPECIFIC  PERFORMANCE — PARTIES  §  1239 

Sec.  1239.  NECESSARY  AND  PROPER  PAR- 
TIES. ENGLISH  RULE.  —  It  is  held  by  some 
courts  that  the  only  necessary  parties  to  a  suit  for 
the  specific  enforcement  of  a  contract  are  the  parties 
to  the  contract.  This  is  the  English  rule  applicable 
to  agreements  of  sale  and  purchase,  and  seems  to 
be  peculiar  to  the  suit  for  specific  performance. 
It  is  quite  the  opposite  of  the  general  rule  in  equity 
which  requires  all  persons  who  have  remote  and 
future  interests,  or  equitable  interests  only,  but  who 
are  directly  affected  by  the  decree,  to  be  made  par- 
ties, if  within  the  jurisdiction  of  the  court,  and, 
in  accordance  with  this  rule,  the  court  will  not  pro- 
ceed to  decide  the  case  unless  they  are  made  par- 
ties to  the  suit.^ 

This  rule  prevails  in  some  jurisdictions  of  this 
country.  The  reason  for  the  rule  is  stated  thus: 
the  matter  actually  in  controversy  in  such  a  suit 
is  the  contract  and  its  fulfillment ;  the  estate  is  not 
actually  involved  in  the  controversy,  and  persons 
who  claim  an  interest  in  the  estate  but  who  are 
wholly  unconnected  with  the  contract  which  it  is 
sought  to  have  performed,  are  not,  therefore,  neces- 
sary parties  to  the  suit.^ 

Another  statement  of  the  rule  is  that  there 
can  be  no  decree  for  specific  performance  except 
between  the  parties  themselves,  or  those  claiming 

1  Willard  v.  Tayloe,  75  U.  S.  557,  19  L.  Ed.  501;  citing  Taaker  y.  Small, 

3  Myl.  &  C.  63,  40  Eng.  Eeprint  848. 

2  Tombler  v.   Sumpter,  97  Ark.   480,  134   S.  W.   967,  where,  of  course, 

possession  of  the  property  is  not  sought. 
Steinman  v.  Hagan,  108  Va.  563,  62  S.  E.  348,  suit  by  vendor  against 
purchaser;  Cella  v.  Brown,  144  Fed.  742,  75  C.  C.  A.  608;  Bacot  v. 
Wetmore,  17  N.  J.  Eq.  250;  see  Schaeffer  v.  Herman,  237  Pa.  86, 
85  Atl.  94. 


§  1240  LAW   OF    OPTION    CONTRACTS  614 

under  them  in  privity  of  estate,  or  by  representa- 
tion, for,  as  it  is  said,  the  contract  can  only  be 
enforced  between  the  parties  themselves  or  their 
representatives  in  interest.^ 

In  accordance  with  this  rule  a  purchaser  of  the 
vendee  is  not  a  necessary  party  to  a  suit  for  specific 
performance  of  the  contract  by  the  vendor/ 

Sec.  1240.  NECESSARY  AND  PROPER  PAR- 
TIES. PREVAILING  RULE.— In  most  jurisdic- 
tions of  the  United  States,  the  rule  is  that  all 
persons  having  an  interest  in  the  enforcement  of 
the  contract  must  be  made  parties  to  the  suit  and 
that  those  interested  in  the  subject  matter  may  be 
made  parties.  This,  also,  is  a  statement,  substan- 
tially, of  the  code  rule,  adding,  however,  that  in 
the  code  states  the  suit  must  be  prosecuted  in  the 
name  of  the  real  party  in  interest.  The  suit,  how- 
ever, being  one  for  specific  enforcement  of  the  con- 
tract, it  follows,  notwithstanding  any  relaxation  of 
the  old  rule,  that  specific  performance  can  not  be 
had  except  as  between  the  parties  to  the  contract 
themselves,  or  those  who,  by  operation  of  law,  or  act 
of  the  parties,  have  succeeded  to,  or  acquired  the 
legal  title  to  the  property  on  the  one  hand,  or,  the 
rights  of  a  party  under  the  contract  being  assign- 

8  See  HoUander  v.  Central  Metal  &  S.  Co.,  109  Md.  131,  71  Atl.  442, 
23  L.  R.  A.  (N.  S.)  1135. 

4  Steinman  v.  Hagan,  supra,  holding  that  the  assignee   of   the  vendee, 
though  not  a  party,  was  bound  by  the  decree  for  sale  of  the  property 
for  payment  of  the  purchase  money  due  the  original  vendor. 
See,  however,  Taylor  v.  Longworth,  39  U.  S.  172,  10  L.  Ed.  405,  holding 
the  assignee  of  a  vendee  is  a  necessary  party. 


615  SPECIFIC  PERFORMANCE — PARTIES         §  1240 

able,  have  acquired  such  rights  by  instrument  of 
assignment  or  conveyance/ 

Where  the  contract  has  been  assigned  by  the  ven- 
dee, it  would  seem  he  is  a  proper  but  not  a  neces- 
sary party  to  a  suit  by  the  vendor,^  or  in  a  suit  by 
the  assignee,^  unless,  in  the  latter  case,  to  settle  the 
validity  of  the  assignment,  or  where  suit  is  brought 
by  an  execution  purchaser  of  the  vendee's  interest,"* 
but  some  cases  hold  the  vendee  is  a  necessary 
party.^ 

To  entitle  the  assignee  to  sue,  an  election  must 
have  been  timely  and  properly  made,  and  the 
assignee  must  have  succeeded  to  the  entire  interest 
of  the  assignor  and  be  in  such  position  that  specific 
performance  can  be  enforced  against  him.^ 

Where  the  optionee  agrees  to  sell  part  of  his 
interest  to  a  third  person  who  is  to  pay  part  of  the 
price,  he  is  still  a  proper  party,^  but  the  owner  of  a 
partial  interest  in  the  option  acquired  by  him 
before  filing  the  bill  by  his  assignor  is  not  a  neces- 
sary party.  ^ 

As  the  purpose  of  the  suit  is  to  compel  a  con- 
veyance of  the  legal  title,  it  follows  that  if  the 

1  Schaeffer  v.  Herman,  237  Pa.  86,  85  Atl.  94 ;  see  Sec.  1241. 

2  Eose  V.  Swann,  56  HI.  37 ;  Betton  v.  Williams,  4  Fla.  11. 

3  Kennedy  v.  Davis's  Devisees,   23   Ky.   372;    Currier  ▼.   Howard,   80 

Mass.  511. 

4  See  Shakespeare  v.  Alba,  76  Ala.  351.    Optionee  suing  as  usee  for  his 

assignee,  Sims  y.  Lide,  94  Ga.  553,  21  S.  E.  220. 

5  Alexander  v.  Hoffman,  70  HI.  114;   Allison  v.  Shilling,  27   Tex.  450, 

86  Am.  Dec.  622. 

6  WheeUng  Creek  G.  C.  &  C.  v.  Elder,  170  Fed.  215. 

7  Bradford  v.  Foster,  87  Tenn.  4,  9  S.  W.  195. 

8  Willard  v.  Tayloe,  75  U.  S.  (8  Wall.)  557,  19  L.  Ed.  501. 


§  1241  LAW   OF   OPTION    CONTRACTS  616 

vendor  has  conveyed  the  legal  title  to  the  land 
before  the  suit  is  filed,  the  grantee  in  whom  is 
vested  the  legal  title  is  a  necessary  party,^  and  both 
vendor  and  his  grantee  are  proper  parties/*'  And 
generally  those  acquiring  or  claiming  an  interest  in 
the  land,  obtained  from  the  vendor  after  the  execu- 
tion of  the  contract,  with  notice  of  plaintiff's  rights, 
are  necessary  or  proper  parties." 

Sec.  1241.  PARTIES  PLAINTIFF.  —  Where 
the  option  is  assignable,  and  the  optionee  has 
assigned  all  of  his  interest  under  the  option  and 
there  has  been  a  proper  and  seasonable  election, 
the  suit  is  properly  brought  in  the  name  of  the 
assignee.^  So,  where  the  optionee  dies  after  an 
election,  the  devisee  under  his  will  may  maintain 

9  Atchison  T.  &  S.  F.  E.  Co.  v.  Benton,  42  Kan.  698,  22  P.  698. 

10  Daily  v.  Litchfield,  10  Mich.  29.    But  the  vendor  is  not  a  necessary 

party.  Van  Dyke  v.  Cole,  81  Vt.  379,  70  Atl.  593 ;  see  Waggoner  v. 
Saether,  (HI.)   107  N.  E.  859. 

11  Morris  v.  Hoyt,  11  Mich.  9,  necessary;  Stone  v.  Buckner,  20  Miss.  73. 
But  ordinarily  if  the  party  has  disposed  of  the  legal  title  to  all  his 

interest  in  the  property  he  should  not  be  made  a  party,  Burrill  v. 
Garst,  19  R.  I.  38,  31  Atl.  436. 
Undisclosed  owners  are  properly  made  parties,  Hopkins  v.  Baremore, 
99  Minn.  413,  109  N.  W.  831. 

1  Wilson  T.  Seybold,  216  Fed.  975;  Perry  v.  Paschal,  103  Ga.  134,  29 

S.  E.  703;  Eobinson  v.  Perry,  21  Ga.  183,  68  Am.  Dec.  455;  House 

V.  Jackson,  24  Ore.  89,  32  P.  1027;  Kerr  v.  Day,  14  Pa.  112,  53  Am. 

Dee.  526;   Gustin  v.  School  District,  94  Mich.  502,  54  N.  W.   156, 

34  A.  S.  R.  361. 
Souffrain  v.  McDonald,  27  Ind.  269,  one  joint  optionee  assigning  to 

other. 
Assignment  by  plaintiff  of  partial  interest  in  contract  is  no  defense, 

Willard  v.  Tayloe,  75  U.  S.  557,  19  L.  Ed.  501,  contra;  Hurst  v. 

Thompson,  73  Ala.  158. 


617  SPECIFIC  PERFORMANCE — PARTIES  §  1242 

suit  for  specific  performance,^  and  the  same  rule 
obtains  with  reference  to  a  mortgagee  of  the  ven- 
dee,^ and  a  purchaser  at  an  execution  sale  of  the 
vendee's  interest/  and  generally  when  performance 
of  the  covenant  would  have  been  decreed  between 
the  parties  to  it,  it  will  be  decreed  as  between  per- 
sons claiming  under  them  in  privity  of  estate,  rep- 
resentation, or  title.^ 

The  rule  does  not  apply  where  the  contract  is  not 
assignable,  but  it  is  sometimes  held  a  stipulation 
against  assignment  does  not  prevent  the  assignee 
from  suing  where  the  option  contract  has  been  fully 
performed  or  performance  tendered.* 

Where,  between  the  time  of  the  execution  of  the 
lease  containing  a  renewal  clause  and  the  election 
to  renew,  there  had  been  a  change  in  the  members 
of  the  partnership,  but  at  the  time  of  bringing  of 
the  suit  the  members  were  the  same  as  when  the 
lease  was  executed,  the  members  of  the  then  part- 
nership can  maintain  such  suit/ 

Sec.    1242.     PARTIES    DEFENDANT.  —  In 

accordance  with  the  rule,  the  party  to  the  contract 
is  a  necessary  party  defendant,  unless  he  has  trans- 

2  Schnuettgen  v.  Frank,  213  Fed.  440,  130  C.  C,  A.  76. 

3  Eicker  v.  Moore,  77  Me.  292 ;  Thompson  v.  Justice,  88  N.  C.  269. 

■4  Morgan  v.  Bouse,  53  Mo.  219;  Costello  v.  Friedman,  8  Ariz.  215,  71  P. 
935,  but  not  when  there  is  no  election;  Alexander  v.  Hoffman, 
70  m.  114. 

6  Hollander  v.  Central  M.  &  S.  Co.,  109  Md.  131,  71  Atl.  442,  23  L.  E.  A. 

(N.  S.)  1135. 

e  Wagner  v.  Cheney,  16  Neb.  202,  20  N.  W.  222;  Johnson  v.  Eklund, 
72  Minn.  195,  75  N.  W.  14. 

7  Fred  Gorder  &  Son  v.  Pankonin,  83  Neb.  204,  119  N.  W.  449. 


§  1242  LAW  OF  OPTION  CONTRACTS  618 

ferred  his  interest  under  the  contract*  and  even 
in  such  case  he  may  be  a  proper  party,  but  the 
vendor  is  a  necessary  party  unless  he  has  conveyed 
the  legal  title. ^  The  person  who  holds  the  legal 
title  is  a  necessary  party  in  order  to  give  the  court 
power  to  grant  the  relief.^ 

While  the  prevailing  rule  is  that  all  persons 
claiming  title  under  the  option  contract  are  prop- 
erly made  parties,  it  is  not  permissible  to  join 
persons  asserting  claims  arising  out  of  a  subse- 
quent option  representing  a  different  transaction.* 

If  A  enters  into  a  contract  (option)  to  sell  land 
to  B  and  afterward  refuses  to  perform  his  contract, 
and  sells  the  land  to  C,  for  a  valuable  consideration, 
B  may,  by  bill,  compel  the  purchaser  to  convey 
to  him,  provided  he  is  chargeable  vdth  notice,  at 
the  time  of  his  purchase,  of  B's  equitable  title 
under  the  agreement.  A  purchaser  with  notice  is 
liable  to  the  same  equity,  stands  in  the  place  of  his 
vendor,  and  is  bound  to  do  that  which  the  person 
he  represents  would  be  bound  to  do  by  the  decree : 
he  takes  the  estate  subject  to  the  charge  and  stands 

1  Town  of  Bristol  v.  Bristol  &  W.  Waterworks,  19  R.  I.  413,  34  Atl. 

359,  32  L.  E.  A.  740. 

2  Slaughter  v.  Nash,  11  Ky.  322;  see  Coleman  v.  Dunton,  99  Me.  121, 

58  Atl.  430. 
Campbell  v.  McFadden,  9  Tex.  Civ.  App.  379,  31  S.  W.  436,  holds  that 

the  maker  of  the  contract  and  his  vendees  are  necessary  parties. 
Parties  who  have  equitable  interest  in  the  land,  but  no  title,  are  proper, 

but  not  necessary  parties;  if  they  are  omitted  their  equities  will  not 

be   affected   by   the    decree,   Robinson    v.    Robinson,    116    Dl.    250, 

5  N.  E.  118. 

8  Preston  t.  Walsh,  10  Fed.  315;  Slaughter  v.  Nash,  11  Ky.  322. 
4  Schaeffer  v.  Herman,  237  Pa.  86,  85  Atl.  94. 


619  SPECIFIC    PERFORMANCE — PARTIES  §  1242 

in  place  of  the  vendor.^  Or,  as  stated  in  another 
leading  case,  a  third  person  who,  with  notice  of  the 
option  rights  of  another,  purchases  the  land  from 
the  optionor,  takes  title  subject  to  the  rights  of  the 
optionee  and  holds  it  in  trust  for  him,  and  the 
optionee  may,  in  equity,  follow  the  land  in  the  pur- 
chaser's hands  and  compel  the  purchaser  to  convey 
the  land  to  him,^  in  which  case,  of  course,  the  pur- 
chaser is  a  necessary  party/  On  the  other  hand, 
specific  performance  will  not  be  granted  where  the 
vendor  has  sold  the  property  to  one  who  is  free 
from  all  equities.* 

6  Veith  V.  McMurtry,  26  Neb.  341,  42  N.  W.  6 ;  Mansfield  y.  Hodgdon, 
147  Mass.  304,  17  N.  E.  544;  Cummins  v.  Beavers,  103  Va.  230, 
48  S.  E.  891,  106  A.  S.  K.  881,  1  Ann.  Gas.  986 ;  Kerr  v.  Bay,  14  Pa. 
112,  53  Am.  Dec.  526;  Hildreth  v.  Shelton,  46  Gal.  382. 

Also  Black  v.  Maddox,  104  Ga.  157,  30  S.  E.  723,  725,  the  deed  to 
the  purchaser  was  cancelled  by  the  decree. 

Where  notice  of  action  was  recorded,  Bryant  Timber  Co.  v.  Wilson, 

151  N.  C.  154,  65  S.  E.  932. 

6  Barrett  v.  McAllister,  33  W.  Va.  738,  11  S.  E.  220;  Taylor  v.  Newton, 

152  Ala.  459,  44  So.  583 ;  Harper  v.  Runner,  85  Neb.  343,  123  N.  W. 
313;  Anderson  v.  Anderson,  251  HI.  415,  96  N.  E.  265,  Ann.  Gas. 
1912C,  556;  Growley  v.  Byrne,  71  Wash.  444,  129  P.  113;  Smith  v. 
Bangham,  156  Gal.  359,  104  P.  689,  28  L.  E.  A,  (N.  S.)  522;  Eoss 
V.  Parks,  93  Ala.  153,  8  So.  368,  30  A.  S.  E.  47,  11  L.  R.  A.  148; 
Gity  of  Birmingham  v.  Forney,  173  Ala.  1,  55  So.  618;  Horgan  v. 
Eussell,  24  N.  D.  490,  140  N.  W.  99,  43  L.  E.  A.  (N.  S.)  1150; 
Tibbs  V.  Zirkle,  55  W.  Va.  49,  46  S.  E.  701,  104  A.  S.  E.  977,  2  Ann. 
Gas.  421;  Birmingham  Ganal  Go.  v.  Gartwaght,  L.  E.  11  Ch.  Div. 
421;  Dillinger  v.  Ogden,  244  Pa.  20,  90  Atl.  446,  Ann.  Gas.  1915G, 
533;  Glough  v.  Gook,  (Del.  Gh.)  87  Atl.  1017. 

Savereux  v.  Tourangeau,  16  Ont.  L.  Eep.  600,  where  purchaser  was 
brought  in  by  amendment  to  bill  as  party  defendant. 

7  Frank  v.  Stratford-Handcock,  13  Wyo.  37,  77  P.  134,  110  A.  S.  R. 

963,  67  L.  E.  A.  571;  Henry  v.  Black,  210  Pa.  245,  59  Atl.  1070,  105 
A.  S.  E.  802;  Northern  Gent.  E.  Go.  v.  Walworth,  193  Pa.  207, 
44  Atl.  253,  74  A.  S.  E.  683;  Meaney  v.  Way,  95  N.  Y.  S.  745, 
108  App.  Div.  290. 

8  Coleman  v.  Dunton,  99  Me.  121,  58  Atl.  430 ;  Halsell  ▼.  Eenf  row,  202 

U.  S.  287,  50  L.  Ed.  1032,  26  S.  Gt.  610. 


§  1243  LAW  OF  OPTION  CONTRACTS  620 

An  action  will  lie  against  an  attorney  in  fact  of 
the  owner  if  he  becomes  vested  with  the  title  to  the 
land  in  his  own  name,  or  in  the  name  of  some  other 
person.* 

According  to  the  law  and  practice  of  particular 
jurisdictions,  the  action  will  lie  against  the  heirs  of 
the  vendor^*^  or  his  representative/^ 

Sec.  1243.  PARTIES.  DOWER  AND  HOME- 
STEAD RIGHTS  OP  WIPE.— Where  the  title  to 
the  land  stands  in  the  wife,  and  she  does  not  sign 
the  option,  executed  by  her  husband,  and  refuses  to 
join  in  a  deed  with  her  husband  and  release  her 
dower  right,  the  option  will  not  be  specifically 
enforced,  unless  the  purchaser  is  willing  to  pay 
the  full  price  and  accept  the  deed  of  the  husband 
alone. ^  The  wife  can  not  be  compelled  to  release 
her  dower  in  the  land^  except  where  she  executes 
the  option.^  If  the  optionee  consents  to  take  the 
title  of  the  husband  subject  to  the  dower  right  of 
the  wife,  a  decree  will  be  granted.* 

8  But  specific  performance  was  allowed  where  the  purchaser  was  repaid 

the  part  paTineiit  made  by  him,  Brinton  v.  Scull,  55  N.  J.  Eq.  747, 
35  Atl.  843. 

9  Thompson  v.  Myrick,  20  Minn.  205. 

10  Butman  v.  Butman,  213  m.  104,  72  N.  E.  821. 

11  Hollis  V.  Libby,  101  Me.  302,  64  Atl.  621. 

1  Graybill  v.  Braugh,  89  Va.  895,  17  S.  E.  558,  37  A.  S.  R.  894,  21  L.  E. 

A.  133 ;  Hughes  v.  Antill,  23  Pa.  Sup.  Ct.  290 ;  see  Krah  v.  Wassmer, 
75  N.  J.  Eq.  109,  71  Atl.  404. 

2  Sloan  V.  WilUams,  138  HI.  43,  27  N.  E.  531,  2  L.  R.  A.  496;  McCormick 

V.  Stephany,  61  N.  J.  Eq.  208,  48  Atl.  25;  Ejrah  v.  Wassmer,  supra. 

3  Krah  v.  Wassmer,  75  N.  J.  Eq.  109,  71  Atl.  404. 

4  Jones  V.  Barnes,  94  N.  Y.  S.  695,  105  App.  Div.  287 ;  see  Aiple  etc.  Co. 

V.  Spelbrink,  211  Mo.  671,  111  S.  W.  480,  14  Ann.  Cas.  652. 


621  SPECIFIC  PERFORMANCE — BILL  OP  COMPLAINT         §  1244 

Under  tlie  Kentucky  statute,  the  wife  lias  no 
dowable  interest  in  land  on  which,  before  the  mar- 
riage, the  husband  had  given  a  company  an  option 
to  purchase,  where  the  option  was  exercised  within 
the  time  limit.'' 

The  mere  fact  that  the  land  under  option  is  a 
homestead  will  not  bar  specific  performance.^  But 
specific  performance  will  not  be  decreed  against  the 
wife  as  to  homestead  property  when  the  option 
given  by  the  husband  is  without  the  wife's  signa- 
ture,"^ unless  the  homestead  was  declared  after  the 
execution  of  the  option.* 

Sec.  1244.  COMPLAINT  OR  BILL.— The  bill 
or  complaint  must  allege  the  contract  and  its  essen- 
tial terms  with  certainty  and  definiteness.^  If  the 
contract  relates  to  personal  property,  the  bill  or 
complaint  must  set  forth  special  facts  to  show  the 
remedy  at  law  is  inadequate.^    If  the  contract 

6  Mineral  Development  Co.  v.  Hall,  (Ky.)  115  S.  W.  230. 

6  Faraday  Coal  Co.  v.  Owens,  26  Ky.  L.  Rep.  243,  80  S.  W.  1171. 

7  Miller  v.  Gray,  29  Tex.  Civ.  App.  183,  68  S.  W.  517;  Moses  v.  McClain, 

82  Ala.  370,  2  So.  741. 

8  Smith  V.  Bangham,  156  Cal.  359,  104  P.  689,  28  L.  R.  A.  (N.  S.)  522. 

Case  where  vnfe  signed  deed  with  her  husband  and  then  placed  same 
in  escrow,  Watkins  v.  Youll,  70  Neb.  81,  96  N.  W.  1042. 

1  Patterson  v.  Farmington  St.  Ry.  Co.,  76  Conn.  628,  57  Atl.  853,  858 ; 

Horner  v.  Clark,  27  Ind.  App.  6,  60  N.  E.  732,  733. 
Form  of  approval  biU  for  specific  performance;  see  Frank  v.  Schnuett- 

gen,  187  Fed.  515,  109  C.  C.  A.  281,  282 ;  Jones  v.  Robinson,  17  L.  J. 

Exch.  36;  Ponsford  v.  Hankey,  2  Giff.  604,  66  Eng.  Reprint  253. 
Necessary  allegations,  see  Swanston  v.  Clark,  153  Cal.  300,  95  P.  1117. 
As  to  definiteness  and  certainty  of  terms  in  the  option  contract,  see 

Sees.  209,  214. 

2  Young  v.  Matthew  Turner  Co.,  168  Cal.  671,  143  P.  1029;  Manton  v. 

Ray,  18  R.  I.  672,  29  Atl.  998,  49  A.  S.  R.  811,  sufficiency  of  allega- 
tions that  stock  has  no  market  value,  etc.;  see  Sec.  1210. 


§  1244  LAW    OF    OPTION    CONTRACTS  622 

relates  to  real  property,  it  is  not  necessary  to  allege 
inadequacy  of  remedy  at  law,  as  that  fact  appears 
from  the  subject  matter.^ 

The  bill  or  complaint  should  show,  by  proper 
allegations,  that  the  contract  sought  to  be  enforced 
is  complete  ;^  that  it  is  founded  upon  a  valuable  and 
adequate  consideration  f  and  in  California  by  force 
of  statute,  that  as  to  the  defendant,  it  is  just  and 
reasonable,  and  it  must  also  appear  that  it  will  not 
be  inequitable  to  enforce  the  contract,®  and,  further, 
that  the  contract  is  capable  of  being  specifically 
enforced  against  both  parties/ 

The  land  or  property  must  be  described  in  the 
bill  or  complaint  with  sufficient  certainty  to  enable 
the  court  to  frame  a  decree  for  its  conveyance,^  or 
to  ascertain  the  boundaries  through  a  survey.^  The 
bill  or   complaint  must   show  that  plaintiff  has 

3  Ide  V.  Leiser,  10  Mont,  5,  24  P.  695,  24  A.  S.  E.  17 ;  see  Sec.  1209. 

4  Horner  v.  Clark,  27  Ind.  App.  6,  60  N.  E.  732,  733. 

5  Young  V.  Matthew  Turner  Co.,  168  Cal.  671,  143  P.  1029,  holding  the 

rule  that  a  writing  is  presumptive  evidence  of  consideration   does 

not  apply;  see  Sees.  324,  1205. 
Sufficiency  of  allegation  of  adequacy  of  consideration  and  fairness  of 

contract,  Walter  G.  Reese  Co.  v.  House,  162  Cal.  740,  124  P.  442. 
Not  sufficient  to  allege  in  hcec  verba  that  consideration  is  adequate, 

Joyce  V.  Tomasini,  168  Cal.  234,  142  P.  67. 

6  Kaiser  v.  Barron,  153  Cal.  788,  96  P.  806 ;  Young  v.  Matthew  Turner 

Co.,  168  Cal.  671,  143  P.  1029;  Joyce  v.  Tomasini,  supra;  Loeffler  v. 
Wright,  13  Cal.  App.  224,  109  P.  269, 
In  Montana,  under  a  statute  similar  to  that  of  California,  inadequacy 
of  consideration  is  held  matter  of  defense,  Finlen  v.  Heinze,  28  Mont. 
548,  73  P.  123. 

7  Horner  v.  Clark,  27  Ind.  App.  6,  60  N.  E.  732. 

8  Harper  v.  Kellar,  111  Ga.  420,  35  S.  E,  667;  Gray  V,  Davia,  26  Ky.  381; 

see  Sec,  214, 

»  Allen  V.  Chambers,  39  N.  C.  125, 


623  SPECIFIC  PERFORMANCE— BILL  OF  COMPLAINT         §  1244 

timely  elected^*^  and  performed,  or  offered  to  per- 
form, the  conditions  precedent  of  the  contract  on 
his  part,^^  and  that  timely  and  proper  notice  of 
election  has  been  given  to  the  optionor;^^  defen- 
dant's failure  or  refusal  to  perform  ;^^  that  the 

10  Storeh  V.  Duhnke,  76  Minn.  521,  79  N.  W.  533. 

Hanes  v.  Newport,  134  Dl.  App.  453,  but  need  not  a"^g^^^\J""f 
election   KroU  v.  Diamond  Match  Co.,  106  Mich.  127,  63  N.  W.  983; 
New  England  Box  Co.  v.  Prentiss,  75  N.  H.  246,  72  Atl.  826,  reason- 
able  time  to  accept. 
llDiion  V   Dixon,  92  Md.  432,  48  Atl.  152;  Chadbourne  v.  Stockton  etc. 
Loan  Soc,  88  Cal.  636,  26  P.  529;  Gates  v.  McNeil,  (Cal.)   147  P. 
944. 
Ab  to  performance  by  optionee  generally,  see  Sees.  714,  717. 
Failure  to  allege  offer  to  pay  consideration  or  willingness  to  do  so,  is 

fatal,  Loeffler  v.  Wright,  13  Cal.  App.  224,  109  P.  269. 
When  price  of  lumber  is  to  be  fixed  by  third  person,  failure  to  allege 
price  has  been  fixed  by  such  person  is  fatal,  Southern  Sawmill  Co. 
V.  Baldwin  L.  Co.,  120  La.  975,  45  So.  961. 
So  when  complaint  fails  to  allege  that  plaintiff  insured  the  property 
for  benefit  of  optionor,  the  option  contract  obligating  him  so  to  do, 
or  that  plaintiff  had  paid  certain  rent,  Chadbourne  v.  Stockton  etc. 
Soc,  88  Cal.  636,  26  P.  529. 
Allegation  that  plaintiff  "elected"  to  pay,  etc.,  is  one  of  fact,  Eisner 
V.  Pringle  Memorial  Home,  115  N.  Y.  S.  58,  130  App.  Div.  559. 

12  Hull  V.  Angus,  60  Ore.  95,  118  P.  284. 

isSufiiciency  of  allegation  where  optionor  ^«^"f^^' J^^^^^^J/^  J^T'^jJ' 
152  Ala.  459,  44  So.  583;  Beddow  v.  Flage,  22  N.  D.  53,  132  N    W. 
637;   Thomson  v.  Kyle,  39  Pla.  582,  23   So.   ^f,  ^3  A^S.  R    193; 
Solomon  Mier  Co.  v.  Hadden,  148  Mich.  488,  111  N.  W.  1040,  118 
A.  S.  R.  586,  12  Ann.  Cas.  88. 
When  the  complaint  alleges  that  at  the  time  plaintiff  gave  notice  of 
acceptance,  defendant  refused,  etc.,  to  perform,  it  must  show  that 
the  contract  was  completed  before  the  offer  was  withdrawn.    This  is 
on  the  theory  that  where  the  acceptance  and  withdrawal  are  contem- 
poraneous, there  ia  no  contract  because  there  is  no  "meeting  of  the 
minds  of  the  parties  at  the  time  of  giving  the  notice  of  acceptance 
etc.    This  would  only  apply  to  a  pure  offer,  Storch  -^  duhnke.  76 
Minn.   521,  79   N.  W.   533;   see  Head  v.  Diggon,   3  M.  &  Ky.   97, 
7  L.  J.  (O.  S.)  K.  B.  36. 


§  1244  LAW   OF    OPTION    CONTRACTS  624 

defendant  is  the  owner  of  the  property  ;^''  and,  also, 
according  to  some  cases  and  on  special  facts,  a 
demand  of  performance,^^  as  well  as  a  demand  for, 
or  a  tender  of  deed  of  conveyance,  in  conformity 
to  the  law  or  custom  of  the  particular  jurisdiction/® 

Where  payment  or  tender  is  necessary,  that  fact 
must  be  alleged^ ^  or  facts  showing  its  waiver,  or 
the  facts   excusing  the  same,^®  and  a  tender  in 

14  Ide  V.  Leiser,  10  Mont.  5,  24  P.  695,  24  A.  S.  R.  17;  Manton  v.  Ray, 
18  R.  I.  672,  29  Atl.  998,  49  A.  S.  R.  811,  stock;  Krah  v.  Wassmer, 
75  N.  J.  Eq.  109,  71  Atl.  404,  possession  by  v^jndee;  Morrisey  v. 
Strom,  57  Wash.  487,  107  P.  191 ;  Christiansen  v.  Aldrich,  30  Mont. 
446,  76  P.  1007;  DeFord  v.  Hyde,  10  S.  D.  386,  73  N.  W.  265; 
Brehm  v.  Sperry,  92  Md.  378,  48  Atl.  368. 

Attaching  copy  of  lease  as  exhibit  to  bill  shows  ownership,  Tebeau  v. 
Ridge,  261  Mo.  547,  170  S.  W.  871. 

isChesbrough  v.  Vizard  Inv.  Co.,  156  Ky.  149,  160  S.  W.  725,  but  not 
when  defendant  has  put  it  out  of  his  power  to  perform  or  has 
repudiated  the  agreement.  Monarch  P.  Co.  v.  Washburn,  89  Kan.  874, 
133  P.  156. 

16  Horner  v.  Clark,  27  Ind.  App.  6,  60  N.  E.  732,  735;   Wellmaker  v. 

Wheatley,  123  Ga.  201,  51  S.  E.  436;  Miller  v.  Cameron,  45  N.  J. 
Eq.  95,  15  Atl.  842,  1  L.  R.  A.  554;  Bell  v.  Wright,  31  Kan.  236, 
1  P.  595,  refusal  to  execute;  Dowdney  v.  McCullom,  59  N.  Y.  367; 
Goodale  v.  West,  5  Cal.  339 ;  Seeley  v.  Howard,  13  Wis.  336 ;  Ashurst 
V.  Peck,  101  Ala.  499,  14  So.  541;  Burns  v.  Fox,  113  Ind.  205,  14 
N.  E.  541. 

17  Rude  V.  Levy,  43  Colo.  482,  96  P.  560,  24  L.  R.  A.  (N,  S.)   91,  127 

A.  S.  R.  123;  Grier  v.  Stewart,  (Tex.  Civ.  App.)  136  S.  W.  1176; 
Levy  V.  Lyon,  153  Cal.  213,  94  P.  881;  Loefl^er  v.  Wright,  13  Cal. 
App.  224,  109  P.  269 ;  Deitz  v.  Stephenson,  51  Ore.  596,  95  P.  803 ; 
allegation  of  readiness,  etc.,  not  sufficient,  Heine  v.  Treadwell,  72 
Cal.  217,  13  P.  503. 

18  Allegation  of  tender  and  refusal,  held  sufficient,  Herman  v.  Winter, 

20  S.  D.  196,  105  N.  W.  457 ;  Finlen  v.  Heinze,  32  Mont.  354,  80  P. 
918;   see  Heine  v.  Treadwell,   72   Cal.   217,   18  P.  503;    Beddow  v. 
Flage,  22  N.  D.  53,  132  N.  W.  637. 
Rule  where  optionor  evades,  Guilford  v.  Mason,  22  R.  I.  422,  48  Atl. 
386;  West  v.  Wash.  &  C.  R.  Ry.,  49  Ore.  436,  90  P.  666. 


625  SPECIFIC   PERFORMANCE — BILL  OP  COMPLAINT        §  1244 

the  pleadings,  without  payment,  is  not,  as  a  rule, 
sufficients^ 

Plaintiff  must  allege  and  show  the  amount  of 
purchase  money  due  defendant;^®  and  that  plain- 
tiff is  ready,  able,  and  willing  to  perform  the  con- 
tract on  his  part.^s  A  general  allegation  of  readi- 
ness, etc.,  is  sufficient. ^^ 

19  See  Carpenter  v.  Thornburn,  76  Ark.  578,  89  S.  W.   1047 ;   Deitz  y. 

Stephenson,  51  Ore.  596,  95  P.  803,  808. 

This  is  a  correct  statement  of  the  rule  in  the  Arkansas  case  where 
tender  was  a  condition  precedent  to  the  right  to  maintain  the  suit, 
see  Rude  v.  Levy,  supra. 

But  there  may  be  special  circumstances  which  will  permit  plaintiff  to 
make  tender  in  his  complaint,  Libby  v.  Parry,  98  Minn.  366,  108 
N.  W.  299;  Brewer  v.  Sowers,  118  Md.  681,  86  Atl.  228,  230.  Thus, 
when  optionor  conveyed  and  died  before  expiration  of  option  time, 
the  assignee  of  the  optionee  is  entitled  to  have  aU  of  the  parties 
brought  in  court  so  that  upon  payment  of  the  money  plaintiff  will 
be  able  to  obtain  a  valid  conveyance,  Maughlin  v.  Perry,  35  Md.  352. 

So,  when  the  optionor  refuses  to  convey,  offer  in  the  complaint  to  pay 
the  price  is  suflScient,  see  Solomon  Mier  Co.  v.  Hadden,  148  Mich. 
488,  111  N.  W.  1040,  118  A.  S.  R.  586,  12  Ann.  Cas.  88;  see,  also, 
Stevens  v.  Kittredge,  44  Wash.  347,  87  P.  484,  delay  of  optionor  in 
delivering  abstract  and  deed;  also  Clamo  v.  Grayson,  30  Ore.  Ill, 
46  P.  426,  436. 

So,  also,  when  the  option  gives  plaintiff  the  ' '  refusal ' '  of  the  property 
at  a  price  as  low  as  any  other  bona  fide  offer  for  it,  Cummings  v. 
Nielsen,  42  Utah  157,  129  P.  619. 

Price  deposited  in  court,  see  Byers  v.  Denver  C.  R.  Co.,  13  Colo.  552, 
22  P.  951;  Stevens  v.  Kittredge,  44  Wash.  347,  87  P.  484;  Mason  v. 
Payne,  47  Mo.  517,  minors. 

20  Coleman  v.  Easterling,  93  Ga.  29,  18  S.  E.  819,  but  failure  to  allege 

the  precise  amount  is  not  always  fatal,  Hull  v.  Peer,  27  El.   312. 

21  Finlen  v.  Heinze,  32  Mont.  354,  80  P.  918;  Deitz  v.  Stephenson,  51  Ore. 

596,  95  P.  803 ;  see  U.  B.  Blalock  &  Co.  v.  W.  D.  Clark  &  Bro.,  133 
N.  C.  306,  45  S.  E.  642. 
When  defendants  are  minors.  Mason  v.  Payne,  47  Mo.  517.    Facts  not 
showing  inability  to  pay  price,  Brown  v.  Reichling,  86   Kan.  640, 
121  P.  1127. 

22  Beddow  v.  Flage,  22  N.  D.  53,  132  N.  W.  637 ;   Wilson  v.  Clark,  35 

Tex.  Civ.  App.  92,  79  S.  W.  649;  Kissack  v.  Bourke,  224  lU.  352, 
79  N.  E.  619. 
40 — Option  Contracts. 


§  1245  LAW  OP  OPTION   CONTRACTS  626 

An  allegation  tliat  plaintiff  is  the  assignee  of 
the  option  contract  withont  setting  forth  the  cir- 
cumstances tending  to  prove  that  fact,  is  sufficient.-^ 

Where  the  contract  sued  on  is  oral,  and  it  is 
sought  to  take  it  out  of  the  operation  of  the  Statute 
of  Frauds,  by  reason  of  part  performance,  it  is 
necessary  to  allege  the  terms  of  the  contract  with 
definiteness  and  certainty  and  to  set  forth  clearly 
and  fully  the  acts  constituting  the  part  perform- 
ance, and  it  must  appear  from  the  face  of  the  com- 
plaint that  a  refusal  of  the  specific  enforcement  of 
the  contract  will  work  a  fraud  upon  plaintiff.^^ 

When,  in  a  suit  for  specific  performance  of  an 
option  contract  to  sell  a  fractional  interest  in  a 
vessel,  the  supplemental  complaint  alleged  that  the 
interest  had  been  sold  pendente  lite  for  a  specified 
sum  and  that  no  part  thereof  had  been  paid  to 
plaintiff,  and  did  not  allege  that  plaintiff  had  been 
damaged  in  that  or  any  other  amount,  the  action 
could  not  be  maintained  as  one  to  recover  damages 
for  breach  of  contract.^^ 

Sec.  1245.  REFORMATION  OF  CONTRACT. 
— It  is  proper  practice  to  frame  a  bill  or  complaint 
for  reformation  of  the  option  contract  and  in  the 

22  But  it  is  not  sufficient  as  a  tender  of  performance,  Clarno  v.  Grayson, 

30  Ore.  Ill,  46  P.  426,  436,  especially  in  pleading  under  mutual  and 
dependent  covenants.  In  such  case  performance  or  offer  of  perform- 
ance by  one  party  is  necessary  to  put  the  other  in  default. 

23  Hollander  v.  Central  Metal  etc.  Co.,  109  Md.   131,  71  Atl.  442,  23 

L.  R.  A.  (N.  S.)  1135. 

«4  Horner  v.  Clark,  27  Ind.  App.  6,  60  N.  E.  732,  733 ;  Krah  v.  Wassmer, 
75  N.  J.  Eq.  109,  71  Atl.  404,  affirmed  in  78  N.  J.  Eq.  305,  81  Atl. 
1133;  Hanes  v.  Newport,  134  HI.  App.  453,  see  as  to  part  perform- 
ance. Sees.  418,  1207,  1208. 

25  Young  V.  Matthew  Turner  Co.,  168  Cal.  671,  143  P.  1029. 


627  SPECIFIC  PERFORMANCE REFORMATION  §  1245 

same  pleading,  upon  proper  allegations  for  that 
purpose,  pray  for  its  specific  performance  as 
reformed.  Of  course,  the  complaint  must  set  forth 
sufficient  facts  to  entitle  plaintiff  to  reformation.^ 
The  ground  upon  which  reformation  is  usually 
sought  is  mistake,  but  the  mistake,  in  accordance 
with  the  rule  on  the  subject,  must  be  mutual,  that 
is,  the  mistake  of  both  parties  and  not  the  mistake 
of  one. 

Thus,  where  there  is  a  mutual  mistake  in  the 
description  of  the  property,  plaintiff  may  bring 
suit  to  reform  such  description  and  to  enforce  the 
contract  as  reformed.^  So,  also,  where  there  is  a 
mistake  of  the  scrivener,  acting  as  the  mutual  agent 
of  both  parties,  in  drafting  the  contract,*  or  a 
mutual  mistake  of  both  parties  in  leaving  out  an 
option  clause  in  a  lease  of  the  land.* 

iMeek  v.  Hurst,  223  Mo.  688,  122  S.  W.  1022;  Swanston  v.  Clark,  153 
Cal.  300,  95  P.  1117;  Butler  v.  Threlkeld,  117  Iowa  116,  90  N.  W.  584. 

2  Pope  V.  Hoopes,  90  Fed.  451,  33  C.  C.  A.  595. 

3  Meek  v.  Hurst,  supra. 

4  Butler  V.  Threlkeld,  117  Iowa  116,  90  N.  W.  584;  see  Collier  v.  Robin- 

son, (Tex.  Civ.  App.)  129  S.  W.  389,  not  allowed  on  facts. 

When  the  parties,  intending  to  grant  an  option,  draft  the  agreement 
in  language,  the  legal  effect  of  which  is  to  make  it  a  sale,  equity 
will  reform  the  contract  in  accordance  with  the  intent  of  the  parties, 
Hopwood  V.  McCausland,  120  Iowa  218,  94  N,  W.  469.  But  will  not 
grant  specific  performance  if  unjust  or  inequitable  as  to  one  of  the 
parties.    Id. 

Rule  as  to  reformation  by  court  where  grounds  apparent  from  face  of 
instrument,  Torrey  v.  McFadyen,  165  N.  C.  237,  81  S.  E.  296,  the 
general  rule  being  that  in  the  absence  of  proper  pleading  asking 
reformation,  evidence  is  inadmissible,  Wellmaker  v,  Wheatley,  123 
Ga.  201,  51  S.  E.  436. 

Written  contracts  can  not  be  reformed  except  upon  most  positive  and 
satisfactory  evidence  showing  fraud  or  mistake  in  committing  the 
agreement  to  writing,  that  is,  mistake  of  one  party  and  fraud  of  the 
other,  or  mutual  mistake,  Braun  v.  Wis.  Rendering  Co.,  92  Wis.  245, 
66  N.  W.  196. 


§§1246,1247         LAW  OF  option  contracts  tiib 

Sec.  1246.  DEMURRER.  CROSS  COM- 
PLAINT. ANSWER.— By  demurrer  the  defen- 
dant may  test  the  sufficiency  of  the  bill.^  In  a  suit 
for  specific  performance  the  defendant  may  file  a 
cross  complaint  or  a  counterclaim,^  but  this  would 
seem  to  be  unnecessary  where  plaintiff  offers  or 
tenders  the  relief  sought  or  the  demand  claimed  by 
the  defendant,  and  in  an  action  at  law,  in  most 
states,  the  defendant  has  a  right,  in  a  proper  case, 
to  a  decree  for  specific  performance  on  his  cross 
complaint,  such  as  in  unlawful  detainer,'  eject- 
ment,* and  in  some  other  actions.^ 

Sec.  1247.  DAMAGES  IN  LIEU  OF  OR  AS 
INCIDENT  TO  SPECIFIC  PERFORMANCE. 

— The  general  rule  is  that  if  plaintiff,  in  good  faith, 
brings  his  suit  for  specific  performance  and  some 
act  of  defendant,  or  other  circumstance,  renders  a 

1  Cheney  v.  Cook,  7  Wis.  413,  but  will  not  consider  the  equitable  circum- 

stances of  the  case  as  change  of  value,  etc.,  until  the  coming  in  of 
the  answer  and  proofs;  also  Tavenner  v.  Barrett,  21  W.  Va.  656; 
Standard  Fashion  Co.  v.  Siegel-Cooper  Co.,  157  N,  Y.  60,  51  N.  E. 
408,  68  A.  S.  E.  749,  43  L.  R.  A.  854. 

2  Damages  for  use  and  occupation  may  be  set  off  against  contract  price, 

Gira  v.  Harris,  14  S.  D.  537,  86  N.  W.  624. 
Abatement  of  price.  White  v.  Weaver,  68  N.  J.  Eq.  644,  61  Atl.  25; 

Tilton  v.  sterling  W.  Co.,  28  Utah  173,  77  P.  758,  107  A.  S.  K.  689. 
Not  inconsistent  as  defense  to  plead  instrument  as  option  and  also  as 

agreement  to  purchase,  Bluegrass  Eealty  Co.  v.  Shelton,  148  Ky.  666, 

147  S.  W.  33. 

8  See  Walker  v.  Edmundson,  111  Ga.  454,  36  S.  E.  800. 

But   not  in  Justice  Court,  Blount  v.   Connolly,    110   Mo.   App.   603, 
85  S.  W.  605. 

4  Stockton  V.  Herron,  3  Idaho,  581,  32  P.  257. 

5  Rescission,  Swanston  v.  Clark,  153  Cal.  300,  95  P.  1117. 


629  SPECIFIC   PERFORMANCE— DEFENSES  §  1248 

decree  impossible,  or  impracticable,  the  court  will 
retain  the  suit  and  award  plaintiff  damages/ 

Thus,  when  in  a  bill  by  a  vendor  to  enforce 
specific  performance  of  a  contract  for  the  sale  of 
land,  under  which  the  vendee  might  relieve  hnnself 
from  the  purchase  by  paying  a  stipulated  sum,  the 
right  of  the  vendor  to  come  into  a  court  of  equity 
being  clear,  the  court,  in  refusing  to  decree  specific 
performance,  may  decree  payment  of  such  stipu- 
lated sum  to  the  vendor,  although  he  could  have 
recovered  the  same  at  law.^ 

The  optionee,  in  specific  performance,  may 
recover  damages  against  the  optionor  for  withhold- 
ing possession,  and  also  for  delay  in  conveying. 

Sec.  1248.  DEFENSES.— The  defenses  to  a  suit 
for  specific  performance  have  already  been  made  to 
appear  in  the  discussion  of  the  preceding  chapters. 
For  convenience  they  are  here  enumerated,  but  it 

1  Bryant  Timber  Co.  v.  Wilson,  151  N.  C.  154,  65  S.  E.  932,  934;  see 
Milmoe  V.  Murphy,  65  N.  J.  Eq.  767,  56  Atl.  292. 
Plaintiff  may  join  count  for  damages  for  breach,  in  the  event  specific 
performance  can  not  be  decreed,  Naylor  v.  Parker,  (Tex.  Civ.  App.) 
139  S.  W.  93. 
Sufficiency  of  complaint,  Marsh  v.  Lott,  156  Gal.  643,  105  P.  968. 
Abatement  of  price,  Tilton  v.  Sterling  C.  Co.,  28  Utah  173,  77  P.  758, 

107  A.  S.  E.  689. 
Not  entitled  to  abatement  in  price  for  railroad  right  of  way  over  land, 
the  presumption  being  the  right  of  way  as  an  incumbrance  was  con- 
sidered in  fixing  the  price,  it  being  obvious,  Wetherby  v.  Griswold, 
(Ore.)  147  P.  388. 
When  building  destroyed  by  fire,  Gamble  v.  Garlock,  116  Minn.  59, 
133  N.  W.  175. 

2  Cathcart  v.  Eobinson,  30  U.  S.  (5  Pet.)  264,  8  L.  Ed.  120. 

3  Beddow  V.  Flage,  22  N.  D.  53,  132  N.  W.  637;  see  West  v.  Washington 

etc.  Eailroad,  49  Ore.  436,  90  P.  666. 


§  1248  LAW  OP  OPTION  CONTRACTS  630 

is  beyond  the  scope  of  this  book  to  present  more 
than  an  outline. 

Among  the  defenses  available  in  a  suit  for  specific 
performance  are  these : 

(a)  Want  or  lack  of  mutuality.* 

(b)  Fraud,^  and  illegality.* 

(c)  Statute  of  Frauds.* 

(d)  Mistake.^ 

(e)  Inadequacy  of  consideration.' 

(f)  Special    circumstances    rendering    specific 
performance  inequitable.'' 

1  See  Sees.  1214  et  seq. 

2  See  Sec.  217;  Grand  Rapids  G.  H.  &  M.  Ry.  Co.  v.  Stevens,  143  Mich. 

646,  107  N.  W.  436. 
That  the  misrepresentation  was  innocently  made,  is  immaterial,  Ginther 

V.  Townsend,  114  Md.  122,  78  Atl.  908;  must  be  relied  on,  Clough  v. 

Cook,  (Del.  Ch.)  87  Atl.  1017. 
Misrepresentation  as  a  defense,  is  not  tested  by  rule  at  law,  Bowker  T. 

Cunningham,  78  N.  J.  Eq.  458,  79  Atl.  608. 

8  See  Sees.  215,  1204. 

4  See  Sees.  401-419. 

5  See  See.  217;  also  McCormick  v.  Stephany,  57  N.  J.  Eq.  257,  41  Atl. 

840;  Hawralty  v.  Warren,  18  N.  J.  Eq.  124,  90  Am,  Dec.  613. 

Belief  that  instrument  was  an  option  is  no  defense,  Lenman  v.  Jones, 
222  U.  S.  51,  56  L.  Ed.  89,  32  S.  Ct.  18. 

Failure  to  include  in  written  contract,  part  of  oral  agreement,  Jasper 
County  El.  Ry.  Co.  v.  Curtis,  154  Mo.  10,  55  S.  W.  222,  but  omission 
of  terms  through  defendant's  negligence  does  not  defeat  specific 
performance,  Krah  v.  Wassmer,  75  N.  J.  Eq.  109,  71  Atl.  404. 

Whether  mistake  is  mutual  is  immaterial^  Caplan  v.  Buckner,  123  Md. 
590,  91  Atl.  481. 

6  See  Sees.  324,  1205. 

Rule  applies  to  agreement  of  sale  and  not  to  the  option,  Marsh  ▼.  Lett, 
8  Cal.  App.  384,  97  P.  163. 

7  See  See.  1204;  also  Rice  v.  Lincoln  etc.  R.  Co.,  88  Neb.  307,  129  N.  W. 

425;  Rider  v.  Gray,  10  Md.  282,  69  Am..  Dec.  135. 
Marks  v.  Gates,  154  Fed.  481,  83  C.  C.  A.  321,  12  Ann.  Cas.  120,  lack  of 
time  limit  and  inadequacy  of  consideration;  grub  stake  contract. 


631  SPECIFIC   PERFORMANCE DEFENSES  §  1248 

(g)  Untimely  or  conditional  election.' 

(h)  Non-performance  by  plaintiff,^  including 
lack  of  payment  or  tender  when  necessary/" 

(i)  Lack  of  ability,  etc.,  of  plaintiff  to  per- 
form. ^^ 

(j)  Lack  of  title  or  defective  or  encumbered 
title.^^ 

(k)  Valuation  of  land  or  arbitration  to  fix  price, 
when  necessary.^* 

The  above  defenses  may,  in  a  way,  be  said  to  arise 
from  the  acts  of  the  parties.  In  addition  to  the 
above  are  the  following  : 

(1)  Indefiniteness  or  uncertainty  in  the  terms  of 
the  option.^* 

7  Not  inequitable  because  no  time  was  specified  for  delivery  of  deed, 

Smith  V.  Bangham,  156  Cal.  359,  104  P.  689,  28  L.  R.  A.  (N.  S.)  522. 
Bluegrass  Realty  Co.  v.  Shelton,  148  Ky.  666,  147  S.  W.  33,  purchaser 
not  compelled  to  accept  deed  reserving  grave  yard  not  mentioned  in 
contract. 

8  See  Sees.  837,  et  seq.;  See.  871;  Bennett  v.  Giles,  220  III.  393,  77 

N.  E.  214. 

9  See  Sees.  714,  871,  1204;  see  Forbes  v.  Connolly,  5  Grant  Ch,  (U.  C.) 

657. 
Abandonment  is  bar.  May  v.  Getty,  140  N.  C.  310,  53  S.  E.  75;  Lasher 
V.  Loeffler,  190  El.  150,  60  N.  E.  85 ;  Meidling  v.  Tref  z,  48  N.  J.  Eq. 
638,  23  Atl.  824;  see  Sees.  710,  et  seq. 

10  See  Sec.  916. 

11  See  Sec.  1244,  note  22 ;  Hessell  v.  Neal,  25  Colo.  App.  300,  137  P.  72. 

Facts  not  showing  inability.  Brown  v.  Reichling,  86  Kan.  640,  121  P. 
1127. 

12  See  Sec.  1005,  et  seq.;  Smith  v.  Bangham,  156  Cal.  359,  104  P.  689, 

28  L.  R.  A.   (N.  S.)   522;  Joffrion  v.  Gumbel,  123  La.  391,  48  So. 
1007. 
This  defense  is  not  available  to  defendant  when  plaintiff  is  willing  to 
accept  such  title  as  defendant  has,  Bryant  Timber  Co.  v.  Wilson,  151 
N.  C.  154,  65  S.  E.  932,  934. 

18  See  Sees.  1212,  1213. 

14  See  Sees.  209-214,  1204;  Marsh  v.  Lett,  8  Cal.  App.  384,  97  P.  163; 
Clinchfield  Coal  Co.  v.  Powers,  107  Va.  393,  59  S.  E.  370,  acreage. 


§  1249  LAW  OF  OPTION  CONTRACTS  632 

(m)  When  a  decree  would  be  ineffectual  or  not 
beneficial/^ 

(n)  When  a  decree  could  not  be  conveniently 
enforced  by  the  court  or  would  require  continuous 
supervision  to  carry  it  into  effect/*^ 

(o)  Where  the  decree  would  work  injustice  to 
third  parties^'^  or  to  the  defendant/^ 

(p)  Statute  of  Limitations/^ 

(q)  Laches/*^ 

(r)   Adequate  remedy  at  law/* 

(s)   Increase  or  decrease  in  value/^ 

A  purely  legal  defense  is  not  looked  upon  favor- 
ably by  the  court,  when  the  equities  are  with  plain- 
tiff, and  in  such  case  the  defense  must  be  clearly 
established/^ 

Sec.  1249.  DEFENSES.  INCREASE  OR 
DECREASE  IN  VALUE.  —  The  mere  fact  that 
the  value  of  the  property  has  increased  or  decreased 
since  the  execution  of  the  contract  will  not,  ordi- 
narily, warrant  a  refusal  of  specific  performance 

15  Alworth  V.  Seymour,  42  Miim.  526,  44  N.  W.  1030;  Adams  v.  Patrick, 

30  Vt.  516. 

16  See  Sec.  1204,  note  8. 

17  See  Sec.  1204,  note  7. 

18  See  Sec.  1204,  note  6;    Hedgeeock   v.    Tate,    (N.    C.)    85    S.   E.   34, 

executor  not  personally  liable  under  his  option  where  it  was  necessary 
to  secure  deed  of  heirs,  the  optionee  knowing  the  facts. 

19  See  Sec.  1251. 

20  See  Sec.  1250 ;  lack  of  diligence  rendering  grant  of  specific  perform- 

ance inequitable,  Nobles  v.  L'Engle,  61  Fla.  696,  55  So.  839. 

21  See  Sees.  1209,  1210. 

22  See  Sec.  1249. 

23  Page  V.  Martin,  46  N.  J.  Eq.  585,  20  Atl.  46. 


633  SPECIFIC   PERFORMANCE — LACHES  §  1250 

where  there  is  absence  of  fraud  or  bad  faith.  ^  The 
vahie  will  be  determined  as  of  the  time  of  making 
the  contract,^  but  specific  performance  will  not  be 
decreed  where  it  appears  the  buyer  has  unreason- 
ably delayed,  either  to  do  the  acts  required  to  be 
done  by  him  to  complete  the  contract,  or  to  seek 
its  enforcement,  and  where,  during  such  delay,  a 
material  increase  in  value  of  the  land  has  taken 
place.^ 

Sec.  1250.  LACHES.— Mere  lapse  of  time,  short 
of  the  Statute  of  Limitations,  is  not  a  reason  for 
dismissing  a  suit  in  equity  for  specific  performance. 
There  must,  in  addition,  be  circumstances  rendering 
a  decree  inequitable.  Each  case  must  be  determined 
from  its  own  circumstances.  Thus,  where  the 
option,  based  upon  a  consideration  of  25  cents  and 
extending  over  a  period  of  three  months,  for  the 
purchase  of  property  worth  $100,000,  is  expressly 
repudiated  by  the  optionor  before  there  has  been 
an  election  by  the  optionee,  and  is  again  repudiated 
when  notice  of  election  to  purchase  is  given,  the 

1  King  V.  Raab,  123  Iowa  632,  99  N.  W.  306,  if  without  fault  of  either 

party;  Anderson  v.  Anderson,  251  111.  415,  96  N.  E.  265,  Ann.  Cas. 
1912C,  556;  Willard  v.  Tayloe,  8  Wall.  (U.  S.)  557,  19  L.  Ed.  501. 
Increase  in  value  and  laches;  see  Sec.  1250. 

2  Anderson  v.  Anderson,  supra;  House  v.  Jackson,  24  Ore.  89,  32  P.  1027, 

1030;  Peterson  v.  Chase,  115  Wis.  239,  91  N.  W.  687. 

SMeidling  v.  Trefz,  48  N.  J.  Eq.  638,  23  Atl.  824;  Joffrion  v.  Gumbel, 
123  La.  391,  48  So.  1007;  Kellow  v.  Jory,  141  Pa.  144,  21  Atl.  522; 
Kentucky  Iron  etc.  Co.  v.  Adams,  32  Ky.  L.  Rep.  823,  106  S.  W. 
1198;  Anderson  v.  Anderson,  supra;  Standiford  v.  Thompson,  135 
Fed.  991,  68  C.  C.  A.  425;  Stevens  v.  McChrystal,  150  Fed.  85; 
Willard  v.  Tayloe,  8  Wall.  (U.  S.)  557,  19  L.  Ed.  501;  Central  Land 
Co.  V.  Johnson,  95  Va.  223,  28  S.  E.  175,  decrease;  right  of  vendor 
to  rescind,  Vance  v.  Newman,  72  Ark.  359,  80  S.  W.  574,  105 
A.  S.  R.  42. 


§  1250  LAW  OF  OPTION   CONTRACTS  634 

delay  of  the  optionee,  for  more  than  three  years 
from  the  refusal  of  his  tender,  during  which  time 
the  property  has  greatly  increased  in  value,  if  imex- 
plained,  constitutes  an  acquiescence  in  the  option- 
or's  repudiation  of  the  contract,  and  prevents 
specific  performance  in  a  suit  by  the  optionee/  But 
a  delay  of  two  years,  on  the  part  of  the  optionee, 
is  not  sufficient  to  bar  specific  performance  when  it 
appears  that  the  optionor  would  not  have  made  a 
deed,  if  payment  had  been  made  and  a  deed 
demanded,^  or  where  the  optionee  goes  into  pos- 
session and  makes  valuable  improvements,^  or 
where  delay  is  caused  by  bona  fide  efforts  to  settle 
and  compromise,*  or  where  a  tenant  was  continu- 
ously in  possession  of  the  premises  for  four  years 

1  Marsh  v.  Lott,  156  Cal.  643,  105  P.  968. 

Laches  and  increase  in  value,  see  Stevens  v.  McChrystal,  150  Fed.  85, 
delay  of  5  years,  Meidling  v.  Trefz,  48  N.  J.  Eq.  638,  23  Atl.  824; 
Kentucky  Iron  etc.  Co.  v.  Adams,  32  Ky.  L.  Rep.  823,  106  S.  W.  1198. 

It  would  be  an  unwarrantable  exercise  of  discretionary  power  to  allow 
one  holding  a  mere  option  to  purchase,  to  lie  by  for  a  long  time  and 
speculate  on  the  fluctuating  value  of  property  and  after  a  substan- 
tial increase  in  value,  to  enforce  a  conveyance  at  the  original  price, 
Joffrion  v.  Gumbel,  123  La.  391,  48  So.  1007. 

See  Davis  v.  Petty,  147  Mo.  374,  48  S.  W.  944,  when  defendant  had 
made  improvements. 

Vickery  v.  Maier,  164  Cal.  384,  129  P.  273,  case  of  option  to  re-pur- 
chase stock  at  any  time  after  six  months. 

2  Penn.  Min.  Co.  v.  Martin,  210  Pa.  53,  59  Atl.  436. 

8  Schielda  v.  Horbach,  28  Neb.  359,  44  N.  W.  465 ;  Byers  v.  Denver 
C.  R.  Co.,  13  Colo.  552,  22  P.  951,  contract  partly  executed  and 
possession  taken. 

otherwise  where  there  is  great  delay,  Blanehard  t.  Jackson,  55  Kan. 
239,  37  P.  986. 

Division  line  agreement  and  option  to  purchase  to  conform  to  line 
established,  Calanchini  v.  Branstetter,  84  CaL  249,  24  P.  149. 

4  Houghwout  V.  Boisaubin,  18  N.  J.  Eq.  315. 


635  SPECIFIC  PERFORMANCE LACHES  §  1250 

after  offer  to  pay  the  price  under  the  option  in  the 
lease.** 

There  must  be  no  unnecessary  delay,  especially 
in  cases  where  to  grant  specific  performance  will 
work  hardship  on  the  defendant.*^  The  law  requires 
plaintiff  to  be  prompt  in  the  enforcement  of  his 
rights,  for,  in  an  option  contract,  time  is  of  the 
essence.'^ 

An  unexplained  delay  of  five  years  will  defeat 
specific  performance.^  Where  the  option  time  is  not 
definitely  fixed,  demand  should  be  made  within  a 
reasonable  time,  and  eight  years  is  not  a  reasonable 
time.^ 

5  Master  v.  Eoberts,  224  Pa.  342,  90  Atl.  735. 

The  possession  of  the  vendee  is  a  continuous  assertion  of  his  claim, 
Hargis  v.  Ederington,  (Ark.)  168  S.  W.  1095;  Sewell  v.  Peavey, 
(Ala.)   65  So.  803. 

6  Dyer  v.  Duffy,  39  W.  Va.  148,  19  S.  E.  540,  24  L.  B.  A.  339;  see 

Kellow  V.  Jory,  141  Pa.  144,  21  Atl.  522. 

7  Plaintiff  must  show  himself  "ready,  desirous,  prompt  and  eager  to 

perform  the  contract  on  his  part,"  Meidling  v.  Trefz,  48  N.  J.  Eq. 
638,  23  Atl.  824;  Penn  Min.  Co.  v.  Martin,  210  Pa.  53,  59  Atl.  436; 
Roberts  v.  Braffett,  33  Utah  51,  92  P.  789. 

8  Bauer  v.  Lumaghi  Coal  Co.,  209  HI.  316,  70  N.  E.  634. 

Fitch  V.  Willard,  73  m.  92,  5  years'  delay  in  rejecting  title  shown  by 

abstract. 
To  same  point,  3^  years'  delay,  Hoyt  v.  Tuxbury,  70  HI.  331;  Spaf- 

ford  V.  Hedges,  231  HI.  140,  83   N.  E.  129,   15  years;   Swank  v, 

Fretts,  209  Pa.  625,  59  Atl.  264,  2 Va- years. 
Of  lessor  to  terminate  lease  and  option,  Lewis  v.  Agoure,  8  Cal.  App. 

146,  96  P.  327. 
There  is  not  laches  when  the  delay  is  due  to  request  of  the  optionor, 

Wheatland  v.  Silsbee,  159  Mass.  177,  34  N.  E.  192, 
Nor  within  the  period  of  statutory  limitation,  when  no  time  is  fixed 

for  performance  and  delivery   of  deed  and  payment  of   price  are 

concurrent  acts,  there  being  no  tender  or  demand.  Bright  v.  James, 

35  B.  I.  492,  85  Atl.  545. 

9  Heydrick  v.  Dickey,  154  Ky.  475,  157  S.  W.  915,  159  S.  W.  666. 


§  1251  LAW  OF  OPTION   CONTRACTS  636 

The  defense  of  laches,  as  a  general  rule,  is  not 
available  unless  pleaded/' 


LO 


Sec.  1251.  TIME  TO  SUE.— The  time  when 
plaintiff  becomes  entitled  to  sue  for  specific  per- 
formance must  be  ascertained  from  the  terms  of 
the  option  contract  and  the  acts  of  the  parties 
thereunder  as  maturing  or  perfecting  his  right  of 
action.  Thus,  plaintiff  and  defendant  carried  on 
the  business  of  surgeons  as  partners  under  arti- 
cles of  partnership,  providing  that  in  case  either 
of  the  parties  should  desire  to  retire  and  should 
give  twelve  calendar  months'  notice  of  intention  of 
such  desire  to  the  other  party,  the  continuing  party 
should  have  the  option  to  become  the  purchaser  of 
the  share  of  the  retiring  partner,  for  a  certain 
sum,  provided  the  option  was  exercised  within  a 
certain  time  after  notice  of  retiring.  August  15, 
1856,  defendant  served  upon  plaintiff  a  proper 
notice  to  retire  from  business.  Thereafter  disputes 
having  arisen  as  to  the  conduct  of  certain  por- 
tions of  the  business  tending  to  reduce  the  value  of 
the  business,  the  defendant  on  the  13th  of  Sep- 
tember following  served  upon  plaintiff  notice  of 
dissolution  of  the  partnership  on  the  groimd  of 
alleged  breach  of  the  partnership  articles.  Later, 
on  the  same  date,  plaintiff  served  notice,  under  the 
articles,  of  his  intention  to  exercise  the  option  to 
purchase  in  accordance  with  his  notice  previously 
given,  and  the  evidence  failing  to  show  breach  of 
the  partnership  articles  by  plaintiff,  it  was  held 
defendant  was  not  entitled  to  a  dissolution  of  the 

10  Smith  V.  Russell,  20  Colo.  App.  554,  80  P.  474. 


637  SPECIFIC  PERFORMANCE — TIME  TO  SUE  §  1251 

articles,  and  that  the  partnership  business  must  be 
continued  until  the  expiration  of  the  twelve  months 
after  service  by  plaintiff  of  the  notice  to  pur- 
chase.^ 

If  one  party  to  a  continuing  contract  consisting 
of  mutual  obligations,  renounces  and  repudiates  it 
prior  to  the  date  fixed  for  performance,  the  other 
party  is  at  liberty,  immediately  to  treat  such  renun- 
ciation as  a  breach  of  the  contract  and  sue  for  dam- 
ages sustained  therefrom,  or  to  treat  the  contract 
as  still  binding  and  wait  until  the  time  arrives  for 
performance,  in  order  to  give  the  party  who  has 
repudiated  the  contract  an  opportunity  to  comply 
with  its  terms.^ 

But  where  the  contract  is  for  the  sale  of  land 
and  the  seller  renounces  and  repudiates  the  con- 
tract before  the  time  specified  for  execution  of  the 
deed  and  the  surrender  of  possession,  the  seller  not 
putting  it  out  of  his  power  to  comply  with  the  con- 
tract, by  selling  it  to  others  or  otherwise,  an  action 
commenced  by  the  purchaser  against  the  seller  to 
compel  execution  of  the  deed  and  to  obtain  a  decree 
for  title  upon  such  repudiation  of  the  contract  by 
the  latter,  before  the  time  for  the  execution  of  the 
deed  and  delivery  of  possession,  is  premature.^ 

1  Warder  v.  StUweU,  3  Jur.  (N.  S.)  9,  26  L.  J.  Ch.  373. 

2  Crosby  v.  Georgia  Realty  Co.,  138  Ga.  746,  76  S.  E.  38;  citing  Ford  v. 

Lawson,  133  Ga.  237,  65  S.  E.  444. 

8  Crosby  v.  Georgia  Realty  Co.,  supra,  citing  Barton  v.  New  England 
Mortgage  Co.,  (Miss.)  25  So.  362;  distinguishing  Miller  v.  Jones, 
68  W.  Va.  526,  71  S.  E,  248,  36  L.  R.  A.  (N.  S.)  408,  on  the  ground 
that  in  the  Miller  case  it  was  sought  to  enforce  certain  provisions 
of  the  contract  in  regard  to  acceptance  of  payment  of  installments 
of  purchase  money  and  other  charges,  and  did  not  seek  to  compel 
the  seller  to  execute  a  deed,  or  to  have  title  decreed  to  be  in  the 
purchaser  before  the  time  agreed  upon  for  making  deed. 
See  as  to  anticipatory  breach.  Sec.  702,  note  4. 


§  1252  LAW   OP   OPTION    CONTRACTS  638 

A  promoter  of  a  corporation,  who,  to  induce  a 
subscription,  executed  in  January,  1908,  an  instru- 
ment reciting  that  he  guaranteed  specified  divi- 
dends, and  providing  that,  should  the  subscriber 
desire  to  sell  the  stock  on  or  before  April  12th,  he 
would  purchase  it  at  par,  and,  should  the  subscriber 
thereafter  desire  to  sell,  the  promoter  would  pur- 
chase for  an  additional  price  prior  to  October  20th, 
and  declaring  that  the  promoter  reserved  the  right 
to  terminate  his  obligations  on  w^ritten  offer  to  buy 
the  stock  and  tendering  the  money  at  the  agreed 
price  at  any  time  on  or  before  the  expiration  of  two 
years  from  date  of  agreement,  gave  the  promoter 
the  right  to  terminate  such  of  the  obligations  of  the 
guaranty  as  had  not  been  either  performed  or 
insisted  on  by  the  subscriber  either  at  the  time  pro- 
vided for  their  performance  or  at  any  later  time 
before  the  exercise  by  the  promoter  of  the  option  to 
buy,  and  where  in  October  the  subscriber  demanded 
performance  of  the  guaranty,  and  the  promoter 
failed  to  perform,  an  action  begun  in  April,  1909, 
on  the  guaranty,  was  not  premature.^ 

Sec.  1252.    STATUTE  OF  LIMITATIONS.— 

In  those  states  where  the  Statute  of  Limitations 
covers  suits  for  specific  performance,  the  suit  for 
specific  performance  is  barred  upon  the  running  of 
the  statutory  period.^  But,  in  most  states  the 
period  fixed  by  the  statute  is  followed  in  cases  of 

4  McCampbell  v.  Obear,  (Gal.  App.)  148  P.  942, 

1  Hargis  v.  Sewell's  Adm'rs,  87  Ky.  63,  7  S.  W.  557,  9  Ky.  L.  Rep.  920; 
Peters  v.  Delaplaine,  49  N,  Y.  362;  Hazzard  v.  Morrison,  (Tei.  Civ. 
App.)  130  S.  W.  244. 


639        SPECIFIC  PERFORMANCE — STATUTE  OP  LIMITATIONS    §  1252 

mere  delay  only.^  Where,  as  shown  in  a  preced- 
ing section,  there  are  laches,  as  that  term  is  imder- 
stood  in  a  court  of  equity,  relief  will  be  denied 
though  the  statutory  period  has  not  run.^  And  in 
those  states  where  suits  for  specific  performance 
do  not  expressly  fall  within  any  statutory  limita- 
tion, courts  of  equity,  by  analogy,  in  cases  of  mere 
delay,  follow  the  statute  and  deny  relief  where  the 
suit  is  delayed  beyond  the  period  fixed  for  a  cor- 
responding legal  action/ 

The  statute  does  not  begin  to  run  until  the 
optionee  is  called  upon  to  exercise  his  option. 
When,  therefore,  the  option  provides  for  a  survey 
of  the  property  and  the  duty  of  making  the  same 
is  not  expressly  cast  upon  either  party,  a  delay  of 
three  years  before  an  attempt  is  made  to  fix  the 
boundary  line,  by  a  survey,  where  no  time  is  fixed 
by  the  option,  and  both  parties  acquiesce  in  the 
delay,  is  not  a  bar  to  the  suit.*^ 

A  contract  for  the  sale  of  corporation  stock  pro- 
viding that  at  any  time  after  six  months,  on  notice 
of  90  days,  the  seller  would  repurchase  the  stock 
at  the  price  paid,  and,  further,  that  the  purchaser 
need  not  sell  the  stock  at  the  price  paid,  contem- 
plates there  should  be  some  delay ;  and  where  pro- 

2  Marsh  v.  Lott,  156  Cal.  643,  105  P.  968. 

SKIeinclaus  v.  Dutard,  147  Cal.  245,  81  P.  516;  Cocanaugher  v.  Green, 
93  Kj.  519,  20  S.  W.  542,  14  Ky.  L.  Itep.  507;  KUne  v.  Vogel, 
90  Mo.  239,  1  S.  W.  733,  2  S.  W.  408. 

4Castner  v.  Walrod,  83  HI.  171,  25  Am.  Rep.  369;  Taylor  v.  Slater, 
21  R.  I.  104,  41  Atl.  1001. 

B  Calanchini  v.  Branstetter,  84  Cal.  249,  24  P.  149. 


§  1253  LAW    OF    OPTION    CONTRACTS  640 

ceedings  were  set  in  motion  b}^  a  demand  that  the 
seller  repurchase,  before  the  Statute  of  Limitations 
had  run,  and  the  actual  demand  was  made  a  few 
months  thereafter,  there  was  no  such  laches  as 
would  bar  an  action  therefor.  The  statute  did  not 
commence  to  run  until  a  demand  to  purchase  had 
been  made.^ 

A  sewing  machine  was  leased  for  seventeen 
months  with  option  of  purchase  at  the  end  of  that 
time.  A  cause  of  action  for  recovery  of  the  machine 
accrued  on  the  expiration  of  the  option  time  and 
the  Statute  of  Limitations  did  not  begin  to  run 
until  that  time."^ 

Sec.  1253.  EVIDENCE.— The  burden  of  proof 
to  show  notice  of  timely  election  is  on  the  optionee 

6  Vickery  v.  Maier,  164  Cal.  384,  129  P.  273. 

In  Brooks  v.  Trustee  Co.,  76  Wash.  589,  136  P.  1152,  it  seems  to  be 
held  that  as  to  an  action  to  recover  the  price  paid  for  bonds  with 
an  option,  to  return  ' '  at  any  time, ' '  the  statute  began  to  run  as  of 
the  date  of  the  contract,  on  the  theory  that  the  purchaser  could  not 
toll  the  statute  indefinitely.  It  seems  to  us  that  when  no  time  limit 
is  expressly  fixed,  the  rule  should  be  that  the  statute  begins  to  run 
upon  the  expiration  of  a  reasonable  time.  No  cause  of  action  to 
recover  the  price  arises  till  an  election  to  rsturn,  and  tender  of  the 
bonds  or  stock  have  been  made,  and  since  the  purchaser  has  a 
reasonable  time  for  these  purposes,  the  statute  can  not  be  set  in 
motion  until  either  an  election  has  been  made  or  a  reasonable  time 
has  elapsed.  See  Heydriek  v.  Dickey,  154  Ky.  475,  157  S.  W.  915,  159 
S.  W.  666. 

Case  where  A  sold  option  owned  by  him  to  B  and  assigned  to  the 
latter  a  half  interest  in  the  consideration  as  being  one-eighth  of  the 
profits  on  a  sale  of  the  property  by  the  purchaser  of  the  option  when 
in  fact  the  consideration  was  one-sixth,  and  B  brought  suit  to  recover 
his  share  of  the  difference,  Martin  v.  Stone,  15  Cal.  App.  174, 
113  P.  706. 

7  Standard  Sewing  Machine  Co.  v.  Frame,  2  Pennewill   (Del.)    430,  48 

Atl.  188. 


b41  SPECIFIC  PERFORMANCE — EVIDENCE  §  iZOd 

and  also  to  show  performance  on  his  part  ;^  but  the 
burden  is  on  the  signers  to  show  that  the  option 
was  not  to  be  operative  unless  signed  by  themselves 
and  another.^  Under  a  ''refusal"  option  to  renew 
a  lease,  the  burden  of  proof  is  on  the  optionee  to 
prove  that  the  offer  of  a  third  person  was  not  bona 
fide;^  and  on  plaintiff  to  show  that  the  considera- 
tion is  adequate/  and  generally  the  burden  is  on 
plaintiff  to  show  he  is  able,  ready  and  willing  to 
perform  ;^  that  a  subsequent  purchaser  had  notice,^ 
and  a  mere  preponderance  of  the  evidence  is  not 
sufficient  on  which  to  grant  specific  performance  of 
a  contract,^  and  this  is  particularly  true  of  an  oral 
contract  and  part  performance.® 

Where  the  contract  is  oral,  it  must  be  clearly 
established;^  and  when  within  the  Statute  of 
Frauds,  the  part  performance  must  be  clearly  made 

1  Weaver  v.  Burr,  31  W.  Va.  736,  8  S.  E.  743,  3  L.  E.  A.  94;  Neill  v. 

Hitchman,  201  Pa.  207,  50  Atl.  987;  Hall  v.  Hyle,  136  N.  Y.  S.  887; 
Boldt  V.  Early,  33  Ind.  App.  434,  70  N.  E.  271,  104  A.  S.  E.  255. 

2  Stanton  v.  Singleton,  (Cal.)  54  P.  587. 

3  Battens  v.  Hoover,  12  Cal.  App.  313,  107  P.  329. 

4  Windsor  v.  Miner,  124  Cal.  492,  57  P.  386 ;   contra,  Finlen  v.  Heinze, 

28  Mont.  548,  73  P.  123,  holding  burden  is  on  party  resisting  the  suit. 

6  Forthman  v.  Deters,  206  HI.  159,  69  N.  E.  97,  99  A.  S.  E.  145. 

6  Parmalee  v.  Kjegelo,  143  Ind.  2,  42  N.  E.  460. 

T  Dewey  v.  Spring  Valley  L.  Co.,  98  Wis.  83,  73  N.  W.  565. 

SCutsinger  v.  Ballard,  115  Ind.  93,  17  N.  E.  206;   HartweU  v.  Black, 
48  HI.  301. 
Parol  contract  held  too   vague,  etc.,  in  terms.   Grizzle  v.   Graddis,   75 
Ga.  350. 

9  Cuppy  V.  Allen,  176  HI.  162,  52  N.  E.  61 ;  Gibbs  v.  Whitwell,  164  Mo. 
387,  64  S.  W.  110;  Wolfinger  v.  McFarland,  67  N.  J.  Eq.  687,  54 
Atl.  862,  affirmed;  60  Atl.  1119. 

41 — Option  Contracts. 


^^ 


§  1253  LAW   OF  OPTION    CONTRACTS  642 

out  ;^®  when  the  contract  is  oral,  reference  may  be 
had  to  a  receipt  given  on  payment  of  the  price.  ^^ 

A  statement  made  by  the  secretary  of  the  cor- 
poration with  reference  to  the  insertion  of  an 
option  clause  in  the  lease,  is  properly  admitted 
against  the  corporation,  the  secretary  having 
charge  of  the  business  and  acting  for  the  corpora- 
tion in  leasing  and  selling  its  lands." 

Where  one  elected  to  accept  an  option  contract 
for  the  privilege  of  mining  coal  under  land,  bind- 
ing him  to  explore  and  survey  the  coal  deposits,  he 
could  not  defeat  a  suit  for  specific  performance  on 
the  ground  that  the  enforcement  thereof  would 
work  a  manifest  injustice,  unless  he  showed,  by  a 
preponderance  of  the  evidence,  the  absence  of  coal 
of  workable  quality  and  condition  under  the  land, 
and,  where  the  evidence  was  conflicting  on  the  ques- 
tions, the  court  properly  enforced  the  contract.^^ 

10  Godschalck  v.  Fulmer,  176  HI.  64,  51  N,  E.  852. 

Lewis  V.  North,  62  Neb.  552,  87  N.  W.  312,  and  the  acts  of  part 
performance  done  with  reference  to  and  in  pursuance  of  the  oral 
contract. 

Evidence  held  to  establish  parol  agreement  to  lease  certain  land  with 
option  to  purchase,  there  being  part  performance,  West  v.  Wash- 
ington etc.  B,  R.  Co.,  49  Ore.  436,  90  P.  666. 

11  Krah  v.  Eadcliffe,  78  N.  J.  Eq.  305,  81  Atl.  1133,  affirming  75  N.  J. 

Eq.  109,  71  Atl.  404. 

12  Abbott  V.  76  Land  &  Water  Co.,  87  Cal.  323,  25  P.  693. 

18  Green  River  Coal  Min.  Co.  v.  Brown,  140  Ky.  332,  131  S.  W.  13. 

Sufficiency  of  evidence  to  sustain  defense  that  the  lessor  signed  the 
lease  not  knowing  it  contained  an  option,  Murphy  v.  Hussey,  117  La. 
390,  41  So.  692;  Thomas  v.  Gottlieb  etc.  Co.,  102  Md.  417,  62 
Atl.  633. 
To  sustain  finding  that  lessor  had  not  changed  his  position  by  reason 
of  lessee's  failure  to  give  notice  within  time,  Monihon  v.  Wakelin, 
6  Ariz.  225,  56  P.  735. 


643  SPECIFIC  PERFORMANCE — DECREE         §  1254 

Sec.  1254.  DECREE.— It  is  proper  practice  to 
provide  in  the  decree  that  plaintiff  pay  the  price 
and  interest  to  the  clerk  of  the  court  for  the  use 
of  defendant  and  that  upon  such  payment  being 
made,  defendant  execute  a  deed  to  plaintiif,  and 
also  to  provide  that  in  the  event  defendant  fails  to 
do  so,  the  decree  itself  operate  as  such  conveyance.^ 

Where  a  conveyance  is  taken  by  a  third  party 
from  the  optionor  with  notice  of  the  option,  the 
purchaser  takes  subject  to  the  option  and  holds  the 
property  in  trust  for  the  optionee  who  may  follow 
the  land  and  compel  the  purchaser  to  convey,^  and 
the  bill  may  pray  for  specific  performance,  or,  in 
the  alternative  for  the  purchase  money  which  the 
purchaser  agreed  to  pay,  as  the  optionee  may  elect. 
But  the  decree  for  the  money  must  be  against  the 
optionor  and  not  against  the  purchaser.  The  money 

13  To  show  plaintiff  had  authority  to  sell  the  premises  on  the  terms  and 

in  the  manner  described  in  the  contract,  Womack  v.  Coleman,  92 

Minn.  328,  100  N.  W.  9. 
To  sustain  finding  that  the  option  was  to  be  void  if  survey  and  abstract 

were  not  completed  and  price  paid  within  a  year,  Germer  v.  Gambill, 

140  Ky.  469,  131  S.  W.  268. 
To  establish  good  faith  of  plaintiff,  Geo.  Gunther  Jr.  Brew.  Co.  v. 

Brywczynski,  107  Md.  696,  69  Atl.  514;   Washburn  v.  White,   197 

Mass.  540,  84  N.  E.  106. 

To   sustain   finding   that   option   was   modified   by   parol,   Murphy   v. 

Anderson,  128  Minn.  106,  150  N.  W.  387. 
Further  as  to  evidence,  see  Sec.  1122. 

1  Veith  V.  McMurtry,  26  Neb.  341,  42  N.  W.  6,  9. 

2  Frank  v.  Stratford-Handcock,  13  Wyo.  37,  77  P.  134,  110  A.  S.  R.  963, 

67  L.  R.  A.  571;  Dengler  v.  Fowler,  94  Neb.  621,  143  N.  W.  944; 
but  not  where  the  optionee  is  estopped,  Milmoe  v.  Murphy,  65  N.  J. 
Eq.  767,  56  Atl.  292. 


§  1254  LAW  OF  OPTION  CONTRACTS  644 

judgment  may  be  made  a  lien  on  the  land  which 
may  be  ordered  sold.^ 

3  Barrett  v.  McAllister,  33  W,  Va.  738,  11  S.  E.  220. 

Decree  required  plaintiff  to  pay  street  assessment,  King  v.  Baab,  123 

Iowa  632,  99  N.  W.  306. 
Decree  allowed  defendant  to  remove  improvements,  or  in  lieu  thereof 

damages,  Peterson  v.  Chase,  115  Wis.  239,  91  N.  W.  687. 
Optionor  on  facts  held  not  required  to  pay  taxes,  Swanston  v.  Clark, 

153  Cal.  300,  95  P.  1117;  optionor  is  liable  for  taxes  accruing  during 

time  he  resists  specific  performance.  Brewer  v.  Sowers,  118  Md.  681, 

86  Atl.  228. 
Damages  where  timber  cut,  McCowen  v.  Pew,  147  Cal.  299,  81  P.  958, 

s.  c.  153  Cal.  735. 
Damages  for  use  and  occupation  set  off  against  contract  price,  Gira  v. 

Harris,  14  S.  D.  537,  86  N.  W.  624. 
Case  where  purchaser  defendant  took  with  notice  of  option  and  decree 

directed  reimbursement  to   him  of  m.oneys  paid   out   of  plaintiff's 

money,  Chesbrough  v.  Vizard  Inv.  Co.,  156  Ky.  149,  160  S.  W.  725. 
Abatement  for  outstanding  option,  Obdert  v.  Marquet,  163  Fed.  892. 
Abatement  for  dower  interest  of  wife,  Tebeau  v.  Eidge,  261  Mo.  547, 

170  S.  W.  871. 
Bond  to  cover  cost  of  sewers  instead  of  abatement  of  price,  Jersey 

City  v.  Flinn,  (N.  J.  Ch.)  78  Atl.  391. 
An  open,  notorious  and  visible  physical  encumbrance  on  the  optioned 

land  gives  no  ground  to  the  optionee  for  abatement  in  the  price, 

Wetherby  v.  Griswold,  (Ore.)  147  P.  388. 


CHAPTER  XIII. 

APPENDIX  OF  FORMS. 

Sec  1301.     Author's  statement. 

Sec.  1302.     Assignment  of  option. 

Sec.  1303.     Assignment  by  endorsement  on  option. 

CAPITAL    STOCK    AND    BONDS    OF    CORPORATIONS, 
OPTIONS  ON. 

Sec.  1304.  Option  to  purchase  shares  of  capital  stock  of  corporation, 
payment  of  part  of  price  deferred. 

Sec.  1305.  Option  to  purchase  capital  stock,  assets,  fixtures,  good  will, 
etc.,  of  importing  company. 

Sec.  1306.  Option  or  "refusal"  on  capital  stock  at  a  price  as  low  as 
any  other  bona  fide  offer. 

Sec.  1307.     Option  to  seUer  to  repurchase,  giving  him  the  first  refusal. 

Sec.  1308.  Clauses  of  agreement  by  vendor  to  repurchase  shares  at 
option  of  purchaser  at  purchase  price  and  interest  thereon, 
and  notice  of  election  thereunder. 

Sec.  1309.  Option  to  purchaser  to  return  bonds  and  receive  back  price 
paid. 

Sec.  1310.  Option  clause  to  majority  of  stockholders  to  appraise  and 
purchase  shares  of  stockholders  becoming  undesirable 
associates,  etc. 

Sec.  1311.  Option  provisions  of  agreement  to  purchase  shares  of 
deceased  stockholder. 

Sec.  1312,  Option  provisions  of  agreement  among  stockholders  of  cor- 
poration giving  option  to  remaining  or  surviving  stock- 
holders to  purchase  shares  of  stockholders  desiring  to  sell, 
or  dying,  with  provision  for  valuation  by  appraisers 
to  be  appointed  by  the  parties. 

Sec.  1313.  Option  by  stockholders  to  sell  their  shares  and  interest  in 
business  of  corporation  to  promotor  of  a  consolidation. 

Sec.  1314.  Provision  of  articles  of  incorporation  giving  the  corporation 
the  first  refusal  on  shares  of  original  subscribers  desiring 
to  sell. 

Sec.  1315.     Agreement  for  sale  and  purchase   of   options  in  exchange 
for  bonds  of  corporation  to  be  organized,  and  on  condi- 
tion that  the  corporation  shall  be  organized. 
(645) 


LAW  OF  OPTION  CONTRACTS  646 

CHATTEL  MORTGAGE,  OPTION  CLAUSES  IN. 

Sec.  1316.  Chattel  mortgage — Option  to  mortgagee  to  mature  debt  upon 
default  by  mortgagor  in  payment  of  principal  or  inter- 
est; if  the  mortgagee  sells;  or  removes  the  chattels;  or 
if  any  writ  shall  be  levied;  or  if  the  mortgagee  deems 
himself  insecure. 

Sec.  1317.     Chattel  mortgage — Insecurity  clause. 

Sec.  1318.     Chattel  mortgage — Insecurity  clause.     Another  form. 

Sec.  1319.     Chattel  mortgage — Insecurity  and  interest  clauses. 

Sec.  1320.     Chattel  mortgage — Insecurity,  sale,  and  removal  clauses. 

See.  1321,  Chattel  mortgage — Clause  giving  option  to  mortgagee  to 
mature  debt  if  mortgagor  attempts  to  dispose  of,  or 
remove  property. 

Sec.  1322.     Chattel  mortgage — Tax  and  assessment  clause. 

LEASES,  OPTION  CLAUSES  IN. 

Sec.  1323.  Lease  of  land  with  option  to  purchase  and  provision  as  to 
improvements. 

Sec.  1324.     Lease  and  option  to  lessee  to  purchase. 

Sec.  1325.  Lease  of  land  with  option  to  purchase,  with  provision  extend- 
ing covenants  to  heirs,  executors  and  administrators  of 
the  parties. 

Sec.  1326.  Agreement  to  execute  lease  of  land  for  ninety-nine  years 
with  option  to  lessee  to  purchase. 

Sec.  1327.  Option  in  lease  giving  the  lessee  the  right  to  purchase  and 
also  giving  the  lessor  the  right  or  option  of  repurchase 
on  certain  contingencies. 

Sec.  1328.  Option  clause  in  lease  giving  the  lessor  the  right  to  take 
buildings  of  lessee,  at  a  price  to  be  fixed  by  three  valuers, 
and  if  not  taken  the  lease  to  be  renewed  for  another  term. 

Sec.  1329.  Clause  in  lease  requiring  lessee  to  erect  building  and  lessor 
"to  take"  the  building  at  end  of  term,  at  its  value  to 
be  determined  by  three  appraisers,  and  further  providing 
that  if  lessor  shall  elect  to  renew  for  a  further  term,  the 
building  erected  shall  belong  to  lessor. 

Sec.  1330.  Agreement  for  lease  with  covenant  by  lessee  to  erect  build- 
ings and  with  option  to  lessor  to  extend  lease  in  per- 
petuity, or  to  purchase  the  building  at  the  appraised 
value,  or  to  sell  the  lot  to  the  lessee  at  the  appraised 
value,  with  provisions  for  appraisement. 

Sec.  1331.  Option  in  lease  for  extension  upon  notice,  and  option  to 
lessee  to  purchase  with  provision  as  to  rents. 

Sec.  1332.     Option  to  lessee  to  extend  lease. 


647  APPENDIX  OF  FORMS 

Sec.  1333.     Lease  with  option  to  lessee  to  renew,  with  provision  against 

second  renewal. 
Sec.  1334.     Option  in,  to  renew  annually  for  four  sucfossive  years,  with 

provision  reserving  the  right  to   the  lessor  to  sell  the 

premises. 

MINING  OPTIONS. 

Sec.  1335.     Option  on  mineral  rights  in  land. 

Sec.  1336.     Option  to  purchase  coal  in  certain  land. 

Sec.  1337.     Option  to  purchase  fifty-one  per  cent  of  gold  mining  claim. 

See.  1338.     Agreement    to    give   option    on   capital   stock    to    syndicate 

which  agrees  to  do  exploration  work  on  mines. 
Sec.  1339.     Oil   and   gas   lease  with    option   to  lessee   to   surrender   or 

terminate. 
Sec.  1340.     Lease  in  form  held  mere  option. 

MOETGAGES  ON  EEAL  ESTATE,  OPTION  IN. 

Sec.  1341.  Clause  in  mortgage  maturing  debt,  at  option  of  mortgagee, 
for  failure  to  pay  principal  or  interest. 

See.  1342.  Option  to  mortgagee  to  mature  debt  upon  default  by  mort- 
gagor in  payment  of  principal  or  interest,  in  case  of 
waste,  failure  to  pay  taxes,  or  to  procure  or  renew  insur- 
ance, etc. 

Sec.  1343.  Option  in  note  secured  to  accelerate  maturity,  upon  default 
in  payment  of  interest,  taxes,  etc. 

Sec.  1344.     Notice  of  election  to  purchase.     General  form. 

OPTION  ON  REAL  ESTATE.    GENERAL  FORM. 

General  form  of  option  to  purchase  real  estate. 

Informal  option  on  land. 

Offer  to  sell  in  form  of  letter. 

Option  to  purchase  land  with  special  stipulation  to  as  to 
breach. 

Option  on  lands.    General  description  of  land. 

Option  on  farm  and  all  property  thereon  except  livestock. 

Option  to  purchase  land  with  clause  giving  right  to  have 
deed  made  direct  to  purchaser  from  optionee,  and  pro- 
viding for  mortgage  to  secure  deferred  payments  of 
price  evidenced  by  note. 
Sec.  1352.  Option  on  land  taking  form  of  deposit  of  deed  of  convey- 
ance with  bank. 
Sec.  1353.     Option  to  purchase  or  to  lease  with  permission  for  erection 

of  building. 
Sec.  1354.     Agreement  to  purchase  fruit  on  trees,  with  option  to  purchase 
the  land,  improvements  thereon,  and  water  rights,  part  of 
price  deferred  and  secured  by  mortgage. 


Sec. 

1345. 

Sec. 

1346. 

Sec. 

1347. 

Sec. 

1348. 

Sec. 

1349. 

Sec. 

1350. 

Sec. 

1351. 

LAW   OF   OPTION    CONTRACTS  64^ 

Sec.  1355.  Agreement  by  A  to  repurchase  land  conveyed  by  him  to  B 
in  consideration  for  or  in  payment  of  shares  of  capital 
stock  sold  by  B  to  A,  the  repurchase  being  at  the  optipn 
of  B,  with  provision  against  assignment  by  B. 

Sec.  1356.  Option  to  purchase  and  agency  to  sell  on  commission  the 
optionor  binding  himself  to  convey  in  penal  sum  with 
provision  that  if  optionor  fails  to  notify  optionee,  the 
option  shall  be  renewed  for  one  year. 

Sec.  1357.  Agreement  combining  option  to  purchase  and  agency  to  sell 
on  commission. 

Sec.  1358.     Agreement  held  agency  to  sell  and  not  option. 

Sec.  1359.  Option  agreement  for  property  to  be  taken  over  by  proposed 
corporation. 

Sec.  1360.  Option  to  purchase  land,  the  price  payable  in  bonds  of  ware- 
house corporation,  the  issuance  of  which  is  to  be  authorize  1 
by  Railroad  Commission. 

Sec.  1361.  Option  to  purchase  with  provision  against  recording  option 
but  providing  for  deposit  of  it  with  third  person,  and 
upon  failure  to  give  notice  of  election,  to  be  surrendered 
for  cancellation. 

Sec.  1362.  Option  clause  requiring  written  notice  of  election  and  ten- 
der of  price  on  delivery  of  deed  of  conveyance. 

MISCELLANEOUS. 
Sec  1363.    Will,  option  in  giving  legatee  right  to  purchase. 


649  author's  statement  §  1301 

Section  1301.  AUTHOR'S  STATEMENT.— 
The  following  forms  are  given  as  helpful  sugges- 
tions merely  and  only.  The  duty  of  a  draftsman  is 
to  give  legal  form  to  the  agreements  of  the  par- 
ties. These  agreements  vary  as  the  facts  of  par- 
ticular cases  vary.  A  general  form  must,  therefore, 
be  adapted  to  the  particular  case.  However,  there 
are  certain  common  provisions  and  certain  other 
essential  provisions  which  a  general  form  will  nec- 
essarily suggest.  For  instance,  the  option  contract 
must  be  drafted  so  as  to  show  the  parties  and  which 
party  is  optionor  and  which  optionee.  The  prop- 
erty covered  by  the  option  must  be  described  so 
it  can  be  identified  or  located.  The  price  must 
be  certainly  fixed,  or  the  method  of  ascertaining  it 
must  be  certainly  and  definitely  pointed  out.  The 
time  of  making  deferred  payments  should  also  be 
expressly  provided  for,  and  a  full  and  careful 
description  of  any  security  for  the  price  should  be 
given,  especially  where  it  takes  the  form  of  a  note 
secured  by  mortgage  on  the  property. 

Other  provisions  of  the  contract  may  be  advis- 
able but  are  not  necessarily  essential.  Thus,  the 
option  may  expressly  require  a  fee  simple  title  or 
provide  for  the  payment  of  taxes  and  assessments, 
but  in  the  absence  of  any  express  provision,  the 
law  writes  into  the  option,  a  clause  or  clauses  cover- 
ing these  matters. 

There  is  no  uniform  custom  as  to  acknowledg- 
ment of  the  option  by  the  optionor  and  its  certifi- 
cation by  a  notary  public  or  other  authorized 
officer.  If  it  is  desired  to  record  the  option,  it 
must,  of  course,  be  acknowledged  and  certified  in 
accordance  with  the  laws  of  the  particular  state. 


§  1302  LAW  OP  OPTION   CONTRACTS  650 

An  option  in  a  lease  or  in  a  mortgage,  or  other 
like  instrument  may  depend  upon  the  validity  of 
the  lease,  or  mortgage,  or  other  contract,  and,  con- 
sequently, the  lease,  the  mortgage,  or  the  other  con- 
tract, containing  the  option,  should  be  executed  in 
accordance  with  the  local  law. 

The  United  States  Internal  Revenue  Stamp  Act, 
of  1898,  did  not  require  the  stamping  of  an  option 
contract,  and  the  same  rule  undoubtedly  applies 
to  the  present  Stamp  Act.  (See  Sec.  215,  note  11.) 

The  forms  presented  in  this  appendix,  except  the 
general  form,  notice  of  election  and  assignment, 
have  been  taken  from  the  decided  cases  and  exhibit 
a  variety  of  transactions.  It  was  thought  that 
forms  taken  from  such  sources  would  be  more 
practical  and,  therefore,  more  useful  than  set 
forms. 

Sec.  1302.     FORMAL  ASSIGNMENT  OF  OPTION. 

Know  all  men  hy  these  presents:  That  I,  C  D  of , 

the  optionee  named  in  that  certain  written  option  agreement, 

dated   ,  191 . . ,  given  by  A  B  to  me,  and 

covering  the  following  described  property,  to-wit: 

(Here  insert  description  of  property.) 

In  consideKation  of  $ ,  lawful  money  of  the  United 

States,  to  me  in  hand  paid,  the  receipt  of  which  is  hereby 
acknowledged,  have  sold  and  assigned,  and  do,  by  these  pres- 
ents, sell  and  assign,  to  the  said  G  H,  and  to  his  heirs  and 
assigns,  the  said  option  contract  and  all  of  my  rights  as 
optionee  therein  and  thereunder,  subject,  nevertheless,  to  all 
the  terras  and  conditions  of  said  option  contract. 

Witness  my  hand  this day  of ,  191 . . 

C    D 

(Acknowledged  and  certified,  if  desired.) 


651  APPENDIX  OF  FORMS  §§  1303-1305 

Sec.  1303.  ASSIGNMENT  BY  ENDORSEMENT  ON 
OPTION. 

For  value  received,  I  hereby  assign  to  G  H  the  within 
option  contract  and  aU  my  rights  thereunder. 

Dated ,191.. 

(Signed)     C    D 

Sec.  1304.  OPTION  TO  PURCHASE  SHARES  OF 
CAPITAL  STOCK  OF  CORPORATION,  PAYMENT  OF 
PART  OF  PRICE  DEFERRED. 

"San  Jose,  CaL,  May  24,  1889.  I  hereby  grant  to  J.  C.  Butt- 
ner  or  assigns  five  days'  refusal  to  purchase  490  shares  of 
Union  Mill  and  Lumber  Co.  stock  for  the  sum  of  $15,100  on 
the  following  terms,  to-wit,  $3,100  down  on  or  before  the  29th 
day  of  May,  1889,  at  3  p.  m.  ;  $1,000,  payable  every  six  months 
thereafter,  with  interest  on  the  whole  balance,  payable  every 
six  months,  and  the  said  490  shares  as  security,  and  20  shares 
additional;  making  510  shares  in  all.  .  .  .  Chas.  C.  Smith." 

Note:     Prom  Buttner  v.  Smith,  (Cal.)  36  P.  652. 

Sec.  1305.  OPTION  TO  PURCHASE  CAPITAL  STOCK, 
ASSETS,  FIXTURES,  GOOD  WILL,  ETC.,  OF  IMPORT- 
ING COMPANY. 

"Seattle,  Washington,  October  30,  1909.  For  the  considera- 
tion of  one  dollar  in  hand  paid,  the  receipt  whereof  is  acknowl- 
edged, J.  N.  Shaw  hereby  gives  to  E.  H,  Baker,  for  the  space 
of  time  of  thirty  days,  an  option  for  the  purchase  of  all  the 
capital  stock  and  assets  of  the  Commercial  Importing  Com- 
pany in  the  following  manner :  All  merchandise  of  the  Com- 
mercial Importing  Company  at  invoice  cost.  All  fixtures  and 
machinery  at  75  per  cent  of  cost.  All  coffee  urns  at  66%  per 
cent  of  cost.  And  an  option  on  any  accounts  receivable  at 
75  per  cent  of  its  face  value.  In  addition  said  Baker  shall  pay 
five  thousand  dollars  for  the  good  will  of  said  business  of  said 
Commercial  Importing  Company  and  said  Shaw  agrees  that 
he  will  not  carry  on  the  coffee  business  in  the  state  of  Wash- 
ington for  the  term  of  two  years  from  date  wdthout  the  per- 
mission of  said  Baker.    (Signed)  J,  N.  Shaw.   The  foregoing 


§§  1306,  1307     LAW  OF  OPTION  CONTRACTS  652 

conditions  are  hereby  accepted  on  this  30th  day  of  October, 
1909.    (Signed)  E.H.Baker." 

Note  :    From  Baker  v.  Shaw,  68  Wash.  99,  122  P.  611. 

Sec.  1306.  OPTION  OR  "REFUSAL"  ON  CAPITAL 
STOCK  AT  A  PRICE  AS  LOW  AS  ANY  OTHER  BONA 
FIDE  OFFER. 

"Salt  Lake  City,  Utah,  October  5,  1907,  This  agreement, 
made  and  entered  into  between  Horace  H,  Cummings  and 
Barbara  M.  Cummings,  his  wife,  first  parties,  and  Christian 
Nielson  and  Sarah  E.  Nielson,  his  wife,  second  parties,  all  of 
Salt  Lake  City,  Salt  Lake  County,  Utah,  witnesseth :  That  the 
said  second  parties  hereby  sell  and  convey  to  the  first  parties 
all  their  right,  title  and  interest  in  the  Cummings-Nielson  Co. 
represented  by  14  shares  of  the  capital  stock  (one  share  of 
their  original  investment  having  been  sold  to  James  Nielson) 
and  also  to  give  an  option  on  all  their  or  either  of  their  interest 
in  the  estate  of  Julian  Moses,  deceased,  or  refusal  to  purchase 
the  same  at  a  price  as  low  as  any  other  bona  fide  offer  for  it  or 
any  portion  of  it,  for  the  sum  of  five  hundred  eighty  [dollars] 
($580.00)  cash,  the  receipt  of  which  is  hereby  acknowledged, 
and  four  hundred  thirty  [dollars]  ($430.00)  within  six  months 
from  date  hereof.  The  said  second  party  shall  also  see  that 
the  ten  shares  of  stock  which  is  now  held  as  security  for 
certain  payments  to  be  made  to"  Ruth  Moses  shall  be  liberated 
before  the  said  second  payment  is  made.  In  consideration 
of  the  transfer  of  stock  and  the  fulfilling  of  the  aforesaid 
covenants  and  conditions,  the  first  parties  agree  to  make  the 
payments  as  aforesaid." 

(Signature  of  parties.) 

Note  :     Prom  Cmnmings  v.  Nielson,  42  Utah  157,  129  P.  619. 

Sec.  1307.  OPTION  TO  SELLER  TO  REPURCHASE, 
GIVING  HIM  THE  FIRST  REFUSAL. 

"This  is  to  certify  that  I  have  this  day  bought  of  W.  S. 
Witham  five  (5)  shares  of  the  capital  stock  of  the  Bank  of 
Cartersville,  Ga.,  and  in  consideration  of  the  price  paid,  and 
for  value  received,  I  hereby  agree  not  to  sell  all  or  any  part 
of  the  stock  at  any  time,  until  I  have  first  offered  the  same 


653  APPENDIX  OF  FORMS  §  1308 

to  W.  S.  Witham  in  writing  at  the  book  value  of  said  stock, 
giving  him  ample  time  to  accept  or  refuse  the  purchase,  bind- 
ing my  heirs,  executors,  and  administrators  in  the  above  option 
and  agreement.   J.  C.  Cothran.   Witness,  T.  H.  Willis." 
Note:    From  Cothran  v.  Witham,  123  Ga.  190,  51  S.  E.  285. 

Sec.  1308.  CLAUSES  OF  AGREEMENT  BY  VENDOR 
TO  REPURCHASE  SHARES  AT  OPTION  OF  PUR- 
CHASER AT  PURCHASE  PRICE  AND  INTEREST 
THEREON,  AND  NOTICE  OF  ELECTION  THERE- 
UNDER. 

"The  party  of  the  second  part  hereby  agrees  to  purchase 
thirty  (30)  shares  of  stock  bearing  a  par  value  of  $3,000.00 
and  to  pay  two  thousand  two  hundred  and  fifty  ($2,250.00) 
dollars  on  or  before  January  1,  1907,  upon  the  proper  delivery 
of  the  stock  certificates,  the  company  having  been  legally 
organized  according  to  the  laws  of  the  state  of  Utah,  and  being 
ready  for  business. 

''The  parties  of  the  first  part,  in  consideration  of  the  cov- 
enants and  agreements  of  the  party  of  the  second  part,  hereby 
agree  to  guarantee  said  stock  in  this  manner,  namely,  that 
they,  the  said  parties  of  the  first  part,  agree  to  purchase  said 
thirty  (30)  shares  of  stock  of  the  party  of  the  second  part 
four  years  after  the  date  of  the  issue  of  said  stock  for  the 
sum  of  two  thousand  two  hundred  and  fifty  ($2,250.00)  dol- 
lars, with  interest  thereon  at  eight  per  cent  (8  per  cent)  per 
annum  from  the  time  of  issue,  at  the  option  of  the  party  of 
the  second  part." 

NOTICE  TO  REPURCHASE. 

"Gentlemen:  It  is  my  desire  that  you  purchase,  on  the 
23d  day  of  January,  1911,  30  shares  of  stock  of  the  Green 
River  Fruit  &  Land  Company  for  the  sum  of  $2,250.00,  with 
interest,  for  four  years  at  8  per  cent  per  annum,  amounting 
to  $720.00  according  to  the  terms  of  a  certain  contract  dated 
the  11th  day  of  September,  1906,  between  J.  Moncrief,  W.  A. 
Cook,  and  D.  D.  Potter,  of  the  first  part,  and  A.  M.  Echter- 
nach,  of  the  second  part.    By  the  terms  of  this  contract  you 


§§  1309,  1310  LAW  OF  OPTION  CONTRACTS  654 

have  agreed  to  purchase  this  stock  four  years  after  its  issue 
if  I  desired  to  sell.  A.  M.  Echternach." 

Note  :     From  Echternach  v.  Moncrief ,  94  Kan.  754,  147  P.  860. 

Sec.  1309.  OPTION  TO  PURCHASER  TO  RETURN 
BONDS  AND  RECEIVE  BACK  PRICE  PAID. 

"Seattle,  May  24,  1906.  Mrs.  E.  A.  Brooks,  City:  In  con- 
sideration of  the  purchase  by  you  on  this  date  of  Inv.  Bonds 
in  our  property  No.  4,  to  the  extent  of  one  thousand  fifty  dol- 
lars ($1,050),  we  hereby  agree  that  after  you  have  consulted 
your  sister  or  any  one  else  in  regard  to  this  investment  you 
desire  to  withdraw  your  investment  you  may  at  any  time  return 
these  bonds  to  our  office  and  withdraw  your  entire  investment 
with  a  6  per  cent  earning  per  annum.  The  Trustee  Co.,  per 
Wm.  F.  Howe,  Trust  Officer." 

Note:    From  Brooks  v.  Trustee  Co.,  76  Wash.  589,  136  P.  1152, 

Sec.  1310.  OPTION  CLAUSE  TO  MAJORITY  OF 
STOCKHOLDERS  TO  APPRAISE  AND  PURCHASE 
SHARES  OF  STOCKHOLDERS  BECOMING  UNDESIR- 
ABLE ASSOCIATES,  ETC. 

"  If  in  the  opinion  of  the  holders  of  the  majority  of  the  com- 
mon stock  of  said  corporation  a  holder  of  any  common  stock 
of  said  corporation  should  cease  to  be  a  desirable  associate 
either  on  account  of  incompetency  or  personal  conduct  or  if 
a  holder  of  any  common  stock  of  said  corporation  shall  volun- 
tarily resign  from  his  or  her  position,  the  holders  of  the 
majority  of  said  common  stock  shall  be  at  liberty  and  they  are 
hereby  empowered  to  appraise  the  cash  value  of  said  stock  and 
redeem  or  purchase  the  same  from  said  party,  and  said  stock 
so  purchased  shall  be  divided  or  distributed  among  the  holders 
of  said  common  stock  in  proportion  to  the  amounts  of  stock 
held  by  each. ' ' 

Note:     From  Boggs  v.  Boggs  &  Buhl,  217  Pa.  10,  66  Atl.  105.  See  also 
BosweU  V.  Buhl,  213  Pa.  450,  63  Atl.  56. 


g55  APPENDIX  OF  FORMS  §  ^^^^ 

c^i^r  1311  OPTION  PROVISIONS  OF  AGREEMENT 
TO  PURCHASE  SHARES  OF  DECEASED  STOCK- 
HOLDER. 

"Third    In  the  eyent  of  Mr.  Brown's  death,  the  remaining 
stockholders,  parties  to  this  agreement,  shall  have  the  right 
purchase  from  his  estate  one-half  of  his  stock  «thin  on 
year  from  date  of  his  death,  and  the  remaimng  vvnthin  two 
years  from  said  date,  at  a  price  equivalent  to  par  and  pro- 
per on  of  surplus  as  set  forth  in  the  first  article  o   this  agree- 
ment   Shonld'the  remaining  parties  hereto  -g  eet  or  «  „e 
within  the  respective  periods  aforesaid,  as  set  forth  in  the 
Tecl^d  Ld  third  paragraphs  of  this  agreement,  to  purehase 
ad  shares,  then  the  representatives  of  the  -Jeeeased  may  the    ■ 
after  sell  the  same  to  any  other  person  or  persons,  or,  at  their 
option  miy  at  any  time  call  upon  the  parties  hereto  to  jom 
^h  "hem  in  winding  up.  liquidating,  and  obtaining  a  d^^ 
Mon  of  said   corporation,   which   the   parties  hereto   bind 
themselves  to  do,  Ihin  siK  months  after  written  notice  to 

^Thftot'lrticle  of  the  agreement  was  as  follows.  "Should 
for  any  reason,  the  said  corporation  at  any  time,  by  v  te  o 
ts  directors  or  otherwise,  permanently   dispense   with  the 
sei-v*es  of  either  of  the  parties  hereto,  the  person  whose  ser- 
pen  hus  dispensed  with  hereby  binds  himself  to  sell,  and 
The  remaining  parties  hereby  agree  to  buy,  within  six  months 
'::  the  date  of  the  vote  of  dismissal,  the  shares^fien  ow^ed 
bv  the  retiring  parties,  at  a  price  equivalent  to  the  par  value 
the  eof   together  with  a  fair  valuation  of  the  proportionat 
part  of  any  surplus  of  earnings  that  may  then  be  in    h 
Casury.  and  to  which  said  shares  might  equitably  be  entit   d 
at  the^ime  of  the  payment  for  and  the  transfer  of  said 

''The'Lnd  article  of  the  agreement  was  as  Mows:  ''In 
the  event  of  the  death  of  either  of  the  parties  hereto  (other 
thin  Mr  Brown),  the  remaining  stockholders,  parties  to  this 
I'^lment.  shall  have  the  right,  at  any  time  «Hhin  -  mon  h, 
from  the  date  of  such  death,  to  purchase  the  stock  ot  the 
decled.  at  a  price  equivalent  to  the  par  value  thereof, 


§  1312  LAW  OF  OPTION  CONTRACTS  656 

together  with  the  proportion  of  surplus  as  set  forth  in  the 
first  article  of  this  agreement." 

Note:    From  Jones  v.  Brown,  171  Mass.  318,  50  N.  E.  648. 

Sec.  1312.  OPTION  PROVISIONS  OF  AGREEMENT 
AMONG  STOCKHOLDERS  OF  CORPORATION  GIVING 
OPTION  TO  REMAINING  OR  SURVIVING  STOCK- 
HOLDERS TO  PURCHASE  SHARES  OF  STOCKHOLD- 
ERS DESIRING  TO  SELL,  OR  DYING,  WITH  PROVI- 
SIONS FOR  VALUATION  BY  APPRAISERS  TO  BE 
APPOINTED  BY  THE  PARTIES. 

In  1895  James  C.  Lindsay,  long  engaged  in  the  hardware 
business,  being  desirous  of  taking  in  with  him  some  of  his  old 
employees,  organized  a  corporation  with  a  capital  stock  of 
$150,000 — $100  per  share — in  which  these  employees  were 
given  certain  shares  on  credit,  or  partly  on  credit ;  and  in  con- 
nection with  this  organization  the  parties  entered  into  an 
agreement  by  which  it  was  provided  that: 

"Whereas,  the  said  parties  have  agreed  among  themselves 
that,  owing  to  the  nature  of  the  business  transacted  by  the 
said  James  C.  Lindsay  Hardware  Company,  it  is  not  desirable 
that  the  said  stock  so  owned  and  held  by  the  parties  hereto 
should  go  upon  the  market  for  sale  and  transfer,  for  the  rea- 
son that  all  the  present  stockholders  are  active  workers  in 
the  business  of  the  said  James  C.  Lindsay  Hardware  Com- 
pany, and  are  giving  their  personal  attention  and  time  to  the 
development  of  the  business;  and 

"Whereas,  by  reason  of  the  uncertainty  of  life  and  of  the 
possibility  of  some  one  (or  more)  of  the  present  stockholders, 
parties  to  this  agreement,  may  wish  to  sell  his  interest  in  the 
said  James  C.  Lindsay  Hardware  Company  and  retire  there- 
from, and  to  guard  against  the  introduction  as  stockholders  in 
the  said  James  C.  Lindsay  Hardware  Company  of  strangers 
or  outsiders  in  the  said  business,  whether  by  reason  of  a  wish 
to  sell  the  said  stock  or  by  reason  of  the  death  of  any  one  or 
more  of  the  present  stockholders,  now  this  agreement  is  made : 

"The  parties  hereto,  owning  at  present  all  the  stock  of  the 
said  company,  agree  among  and  with  each  other  that  in  case 
any  one  or  more  of  them  should  desire  to  sell  his  stock  in  the 


gjY  iPPENDIX  OF  FORMS  8  131 

said  James  C.  Lindsay  Hardware  Company,  and  retire  from 
aid  business,  or  in  the  event  of  the  death  of  ^y  o°^„  f  J^he 
of  the  present  stockholders,  it  is  agreed  that  those  ot  the 
pre  ent  stockholders,  who  remain  in  the  said  busmess  as  stock- 
holder therein  shall  have  the  option  to  purchase  and  aeqmre 
th  who  e  of  the  stock  interest  of  such  party  so  dyng  or  so 
desiring  to  sell  his  said  interest  at  the  book  value  thereof,  wh:eh 
book  value  shall  be  ascertained  as  follows: 

"In  case  the  parties  can  agree  upon  a  price  to  be  Paid,  then 
the  parties  having  the  right  to  purchase  may  take  the  inte.est 
at  such  price  so  agreed  upon.  But  in  case  the  representatives 
„{  the  party  so  dying  or  the  party  desiring  to  retire  by  sale 
:  Msin  frL  and  the  remaining  parties  of  this  contract  can 
not  agree  upon  a  fair  price  or  book  value  thereof,  then  each 
of  th^parti^s  shall  have  the  right  to  appoint  one  experienced 
businei  man  as  arbitrators,  who,  if  they  can  agree,  shall  fa 
a  pr°ce,  whereupon  the  parties  to  this  contract  remaming  m 
the"u^iness  shall  have  the  right  to  purchase  said  ^terest  o 
h  said  party  going  out,  at  such  6^-.  «  *f  ^^  fX^k, 
they  shall  have  the  option  to  refuse  or  to  take  the  interest  at 

*''' ' InTe  event  that  the  two  arbitrators  so  appointed  can  not 
agree  then  they  shall  choose  a  third  party  as  umpire,  and  he 
d!  S^n  of  the  majority  thereof  shall  fa  a  pnce  at  which  h 
parties  remaining  in  the  business  shall  have  the  right  to  take 
or  to  refuse  the  interest  at  the  pnce  so  determined^  In  case 
the  parties  remaining  in  the  business  refuse  to  Purchase  after 
the  price  is  faed  by  arbitrators,  then  the  interest  may  be  old 
by  the  owner  or  his  representative  to  the  highest  and  best 

"  •  !lny  stock  of  a  party  retiring  from  the  business,  or  dying 
acquired  by  the  remaining  stockholders  under  this  agreemen 
3  be  di^ded  or  assigned  by  the  president  of  the  board  o 
directors  at  such  time  acting,  subject  to  the  approval  of  the 
board  to  any  one  or  more  of  the  parties  to  this  agreement  or 
to  some  ot"r  party  not  in  this  agreement,  on  the  paymen   by 
such  party  of  «ie  amount  of  the  purchase  price  thereof  whch 
Shan  b!  Liei  among  such  parties  as  shall  have  supplied  the 
purchase  money  to  pay  for  the  interest  so  rct.nng. 

note:     From  In  re  Lindsay 's  Estate,  210  Pa.  224,  59  Ati.  1074. 

42 — Option  Contracts. 


§  1313  LAW  OF  OPTION  CONTRACTS  658 

Sec.  1313.  OPTION  BY  STOCKHOLDERS  TO  SELL 
THEIR  SHARES  AND  INTEREST  IN  BUSINESS  OF 
CORPORATION  TO  A  PROMOTOR  OF  A  CONSOLIDA- 
TION. 

This  Agreement,  Entered  into  this  ....  day  of , 

A.  D.  19 ... ,  by  and  between  the  undersigned  owners  and 
holders  of  property,  or  shares  of  capital  stock  or  interest  in 
Brick  Company,  hereinafter  called  the  ' '  Ven- 
dors, ' '  parties  of  the  first  part,  and , 

hereinafter  called  the  "Consolidation  Purchaser,"  party  of 
the  second  part,  Witnesseth: 

Whereas,  The  ' '  Consolidation  Purchaser ' '  desires  to  obtain 
the  right  to  purchase  and  acquire  for,  or  to  have  purchased 
and  acquired  by,  a  corporation  hereinafter  to  be  designated 
by  him  and  hereinafter  known  as  "Brick  Company,"  the 
property  hereinafter  described,  and 

Whereas,  The  "Vendors"  are  the  owners  of,  and  are  will- 
ing to  sell  to  the  "Consolidation  Purchaser,"  the  property 
hereinafter  described. 

Now,  Wherefore,  In  consideration  of  the  work  and  services 
performed  in  the  promotion  of  a  consolidation  of  the  fire  brick 
manufacturers  of  the  State  of  Pennsylvania  by  the  said  ' '  Con- 
solidation Purchaser,"  and  in  further  consideration  of  the 
action  to  be  taken  by  the  "Consolidation  Purchaser,"  herein, 
and  of  one  thousand  dollars  ($1,000)  to  the  "Vendors"  by 
him  paid  (the  receipt  of  which  is  acknowledged),  the  "Ven- 
dors" hereby  covenant  and  agree  with  the  "Consolidation 
Purchaser"  as  follows: 

Article  I :    The  ' '  Vendors ' '  if,  and  when,  so  requested  by 

the  *  *  Consolidation  Purchaser, ' '  at  any  time  before , 

19 ... ,  will  sell,  convey,  assign,  transfer  and  deliver  unto  the 
"Consolidation  Purchaser,"  his  heirs,  executors,  administra- 
tors, survivors  or  assigns,  by  good  and  indefeasible  title,  and 
free  and  clear  of  all  incumbrances  and  all  indebtedness  and 
liabilities  (except  such  as  are  specifically  stated  in  "Schedule 
A,"  hereto  annexed  and  made  a  part  thereof),  all  their,  and 
each  of  their,  property,  shares  of  capital  stock  of,  and  interest 

in  said Brick  Company  to  the  extent  set  opposite 

their  respective  signatures,  and  upon  and  subject  to  the  tenns 
hereinafter  provided:    A  general  but  not  exclusive  schedule 


659  APPENDIX  OP  FORMS  §  1313 

of  the  assets  and  property  of  the  Brick  Com- 
pany being  hereto  annexed  and  made  a  part  hereof,  marked 
"Schedule  B." 

Article  II:  The  purchase  price  of  the  property  acquired 
by  Article  I  shall  be  three  hundred  thousand  dollars  ($300,- 
000),  and  the  one  thousand  [dollars]  ($1,000)  paid  as  part 
consideration  for  this  contract  shall  be  applied  on  account 
thereof. 

Article  III :  If,  and  in  case,  the  * '  Consolidation  Purchaser ' ' 
shall  elect  to  purchase  said  property,  property  interests  and 
shares  of  capital  stock,  payment  at  the  price  aforesaid  shall  be 
made  wholly  in  cash,  or  at  the  option  of  the  "Vendors"  one 
hundred  and  fifty  thousand  dollars  ($150,000)  in  cash,  and 
the  remainder  thereof  in  the  preferred  and  common  stocks  of 
the  "Brick  Company"  under  the  terms  and  conditions  set 
forth  in  the  exhibit  hereto  annexed  and  made  a  part  hereof 
as  "Vendors'  Underwriting  Proposition." 

Article  IV:  The  "Vendors"  will  allow  the  appraisers, 
accountants,  attorneys  and  agents  of  the  "Consolidation  Pur- 
chaser" full  access  to,  and  examination  of,  all  the  property, 
books,  inventories,  records,  titles,  corporate  status  and  affairs 
of  their  said  business  covering  a  period  not  exceeding  three 
years  last  past,  and  will  likewise  make  and  submit  forthwith 
to  such  appraisers  and  accountants  full  and  true  inventories, 
balance  sheets,  profit  and  loss  income  statements,  and  other 
financial  or  manufacturing  statements  of  any  kind,  and  upon 
demand  wiU  furnish  maps,  complete  abstracts  of  title,  and 
other  data  which  said  appraisers,  accountants  and  attorneys 
may  deem  necessary. 

Article  V:  In  consideration  of  the  execution  of  this  agree- 
ment by  the  "Consolidation  Purchaser,"  and  by  the  "Ven- 
dors" severally,  and  in  the  event  of  the  purchase  of,  and  pay- 
ment for,  said  property  upon  the  terms  of  this  agreement,  and 
in  further  consideration  of  such  purchase  and  payment,  the 
''Vendors"  severally  and  expressly  covenant  and  agree  with 
the  "Consolidation  Purchaser,"  his  heirs,  executors,  admin- 
istrators, survivors  or  assigns  that  they  will  not,  directly  or 
indirectly,  individually  or  as  officers,  directors  or  agents  of 
any  corporation,  firm  or  individual,  engage  or  be  interested 
in  the  business  of  manufacturing,  buying,  selling  or  dealing 


§  1313  LAW  OF  OPTION  CONTRACTS  6G0 

in  silica  or  clay  fire  brick  in  the  States  of   , 

, or , 

for  a  period  of  fifteen  years  from  and  after  the  date  of  such 
purchase  and  payment,  except  with  the  consent,  or  in  the 
employment  of  the  said  "Brick  Company"  or  the  parties  to 
whom  this  contract  may  be  assigned  by  the  "Consolidation 
Purchaser,"  it  being  understood  and  agreed  that  the  "Ven- 
dors' "  good  will  is  one  of  the  essential  considerations  for 
the  execution  of  this  contract  by  the  "Consolidation  Pur- 
chaser." They  are,  however,  in  no  way  restricted  in  the  manu- 
facture of  Magnesite  brick  or  dealing  in  magnesite,  or  any 
article  made  in  whole  or  in  part  from  magnesite. 

Article  VI :  The  "Consolidation  Purchaser"  shall  have,  and 
hereby  there  is  vested  in  him,  the  right  to  assign,  transfer,  and 
set  over  to  such  banker  or  bankers,  or  other  party  as  shall 
be  nominated  by  such  "Consolidation  Purchaser,"  any  or  all 
of  his  rights  under  and  in  this  agreement,  and  thereupon  such 
assignee  (provided  that  such  assignment  be  by  written  instru- 
ment accepted  by  such  assignee,  and  not  otherwise)  shall  be 
subrogated  to,  and  shall  have  all  the  rights  and  interests,  and 
shall  assume  all  the  liabilities,  which  are  vested  in  or  attached 
to  the  said  "Consolidation  Purchaser"  and  which  may  be  so 
assigned,  and  upon  such  accepted  assignment  the  "Consolida- 
tion Purchaser,"  ipso  facto  shall  be  fully  released  and  dis- 
charged from  all  liability,  obligations,  or  responsibility,  if 
any  there  be,  under  this  agreement. 

Article  VII:  The  "Consolidation  Purchaser"  will  cause  to 
be  made  promptly  an  audit,  examination  and  appraisement  of 
the  property  covered  by  this  contract,  and  will  thereafter,  and 

on  or  before  the day  of ,  19 ... ,  give 

notice  in  writing   to   the   "Vendors"   by  a  communication 

addressed  to  the Brick  Company,  at , 

,  of  his  election  to  avail  of  this  option,  and 

such  notice  shall  be  accompanied  by  a  statement  showing  the 
proposed  total  issue  of  bonds  and  preferred  and  common  stock 
of  the  "Brick  Company,"  and  also  the  aggregate  net  earn- 
ings for  the  past  two  years  of  the  concerns  being  purchased 
by  it. 

No  mistake,  error  or  variation  from  the  final  figures,  in 
such  statement  of  securities  to  be  issued,  or  aggregate  net 


661  APPENDIX  OF  FORMS  §  1313 

earnings,  however,  shall  avoid  the  right  of  the  "Consolida- 
tion Purchaser"  to  purchase  the  property  of  the  "Vendors" 
for  cash  at  the  purchase  price  herein. 

Article  VIII:  The  "Vendors"  will  within  ten  days  after 
the  receipt  of  the  notice  and  statement  mentioned  in  Article 
VII  (during  which  period  they  shall  have  the  right  to  investi- 
gate the  accuracy  of  the  figures  in  said  statement)  notify  the 
"Consolidation  Purchaser"  of  their  intention  to  exercise  the 
option  given  them  by  Article  III  to  take  the  remainder  of 
their  purchase  price  in  stock  according  to  the  terms  thereof 
and  the  exhibit  thereto,  and  thenceforth  they  will  be  bound 
thereby. 

Article  IX:  The  "Vendors"  certify  that  "Schedule  C," 
hereto  annexed  and  made  a  part  hereof,  correctly  states  for 
the  periods  therein  set  forth: 

1st.    The  amount  of  goods  sold  by  them. 

2nd.    The  gross  earnings. 

3rd.    The  net  earnings. 

4th.    The  amount  of  interest  paid  for  borrowed  money. 

5th.  The  amount  paid  for  salaries  of  President,  Vice  Presi- 
dent, Secretary,  Treasurer  and  General  Manager. 

Article  X:  To  facilitate  purchase  and  payment  hereunder 
the  "Vendors"  when  called  upon  so  to  do  by  the  "Consolida- 
tion Purchaser"  will  deposit  with  the Trust 

Company  of , ,  the  certificates 

for  the  shares  so  owned  or  controlled  by  them  respectively, 
duly  assigned  in  blank,  and  their  proper  conveyances  of,  and 
abstracts  of  title  respecting,  the  property  covered  by  this 
agreement,  and  will  cause  said  certificates  or  other  property 
to  be  delivered  by  said  Trust  Company  to  the  said  "Con- 
solidation Purchaser,"  his  heirs,  executors,  administrators, 
survivors  or  assigns,  upon  payment  being  made  therefor  as 
herein  provided.  In  the  event  that  this  agreement  be  not  so 
consummated,  then  and  thereupon  such  certificates,  convey- 
ances, abstracts,  and  other  property  shall  be  returned  to  the 
"Vendors"  respectively  so  depositing  the  same,  without 
expense  of  any  kind.  In  evidence  of  such  deposits  hereunder, 
the  Trust  Company  shall  issue  and  deliver  to  the  "Vendors" 
its  proper  receipt.  All  payments  and  deliveries  provided  for 
by  this  agreement  shall  be  made  at  the  office  of  said  Trust 


§  1313  LAW  OF  OPTION  CONTRACTS  662 

Company;  and  the  "Vendors"  agree  that,  during  the  period 
covered  by  this  contract,  no  increase  in  its  capital  stock,  and 
no  bond,  mortgage,  lease  or  conveyance  upon  or  in  respect 
of  its  real  estate  or  plant,  or  any  of  its  property,  shall  be 
made,  and  that  allowance  shall  be  made  to  the  ' '  Consolidation 
Purchaser"  for  any  dividends  paid,  or  any  distribution  of 
surplus  profits  or  earnings  after  the  date  hereof. 

Article  XI:  At  the  time  of  transfer  hereunder,  upon 
request,  the  "Vendors"  will  procure  for  the  "Consolidation 
Purchaser,"  or  his  assigns,  the  resignation  in  writing  of  all 
its  directors  and  officers. 

Article  XII :  The  parties  hereto  severally  and  respectively 
will  make,  execute,  acknowledge  and  deliver  in  due  form  of 
law,  all  such  conveyances  or  other  instruments,  and  will  do 
all  such  acts  and  things  as  reasonably  may  be  required,  the 
one  from  the  other,  to  fully  carry  out  the  purposes  of  this 
agreement. 

In  Witness  Whereof  the  said  parties  have  hereunto  set 
their  hands  and  seals  the  day  and  year  first  above  written. 

(Signed)    Brick  Company, 

By 

President. 
Attest : 


Secretary. 

NAME.  NO.  op  shares. 


(Schedules  should  be  attached.) 


VENDORS'  UNDERWRITING  PROPOSITION. 

The  "Consolidation  Purchaser"  will  endeavor  to  observe 
like  rules  of  valuation  in  purchase  of  all  properties. 

For  the  aggregate  purchase  price  of  all  the  concerns  as  set 
forth  in  Article  II  in  each  "Vendor's  Agreement,"  the  "Brick 
Company"  will  issue,  or  cause  to  be  issued,  under  its  guar- 
anty five  per  cent  bonds  (first  mortgage,  debenture,  or  col- 
lateral trust,  and  in  one  or  several  series,  at  its  option)  in 
an  amount  not  to  exceed  thirty-three  and  one-third  (33  1-3) 
pe!r  cent  of  such  aggregate  purchase  price  and  six  (6)  per  cent 


663  APPENDIX  OP  FORMS  §  1314 

cumulative  preferred  stock  for  the  remainder  of  such  aggre- 
gate purchase  price. 

Each  of  the  "Vendors"  taking  a  part  of  their  purchase 
price  in  the  preferred  and  common  stock  of  the  "Brick  Com- 
pany" under  Article  III  of  "Vendor's  Agreement"  (there 
called  "The  remainder")  will  receive  such  part  or  remainder 
of  purchase  price  in  the  six  (6)  per  cent  cumulative  pre- 
ferred stock  of  the  "Brick  Company,"  at  par,  and  in  addi- 
tion thereto  and  as  a  bonus  herewith,  will  be  paid  fifty  (50) 
per  cent  thereof  in  the  common  stock  of  the  "Brick  Company" 
at  par. 

The  "Vendors"  (taking  part  or  the  remainder  of  their  pur- 
chase price  in  stock  under  Artice  II)  will  be  paid  a  further 
amount  of  common  stock  (providing  their  earnings  justify  it) 
in  the  following  manner: 

The  average  net  earnings  of  the  "Vendors"  for  the  past 
two  years  shall  be  ascertained  and  the  auditors'  estimate  of 
earnings  upon  new  plants  erected  or  acquired  within  these  two 
years,  whose  earnings  would  not  otherwise  receive  credit,  shall 
be  added  thereto. 

The  ratio  that  the  part  or  remainder  of  purchase  price  (that 
the  "Vendors"  take  in  stock)  bears  to  the  total  purchase  price 
shall  be  ascertained  and  such  rate  shall  be  applied  to  such 
average  net  earnings,  and  there  shall  be  deducted  from  the 
result  thereof  an  amount  equal  to  six  (6)  per  cent  of  the 
"Vendors"  preferred  stock  (payable  thereon)  and  common 
stock  shall  be  paid  to  the  "Vendors"  on  the  remainder  of 
such  proportion  of  said  earnings  on  the  basis  of  what  would 
have  been  four  (4)  per  cent,  except  for  the  issue  for  good 
will  hereinbefore  provided  for. 

Note:     From  Harbison- Walker  Refractories  Co.  v.  Stanton,  227  Pa.  55, 
75  Atl.  988. 

Sec.  1314.  PROVISION  OF  ARTICLES  OF  INCOR- 
PORATION GIVING  THE  CORPORATION  THE  FIRST 
REFUSAL  ON  SHARES  OF  ORIGINAL  SUBSCRIBERS 
DESIRING  TO  SELL. 

"If  at  any  time  any  of  the  original  stockholder  subscribers 
hereto  desire  to  sell  and  dispose  of  their  stock,  said  stockholder 
or  stockholders  shall  first  offer  it  in  writing  to  the  board  of 


§  1315  LAW  OF  OPTION  CONTRACTS  664 

directors,  stating  price  and  terms  and  give  the  board  of  direc- 
tors ten  days  in  which  to  place  it  with  the  stockholders.  At 
the  expiration  of  ten  days  if  no  stockholder  has  purchased 
and  settled  for  same,  said  stockholder  or  stockholders  shall 
have  the  right  to  sell  to  whomever  will  purchase  upon  the  same 
[terms]  and  price  for  which  it  was  offered  to  the  board  of 
directors. ' ' 

Note:     Held  valid  in  Casper  v.  Kalt-Zimmers  Mfg.  Co.,  159  Wis.  517, 
149  N.  W.  754. 

Sec.  1315.  AGREEMENT  FOR  SALE  AND  PUR- 
CHASE OF  OPTIONS  IN  EXCHANGE  FOR  BONDS  OF 
CORPORATION  TO  BE  ORGANIZED  AND  ON  CON- 
DITION THAT  THE  CORPORATION  SHALL  BE  OR- 
GANIZED. 

Augusta,  Ga.,  June  1,  1900. 

"In  consideration  of  five  thousand  dollars  in  cash,  repre- 
sented by  draft  of  "W.  H.  Chew,  trustee  of  G.  E.  Fisher,  of 
37  Wall  Street,  New  York,  for  $5,000.00,  and  the  agreement 
of  said  trustee  to  have  delivered  to  me  fifteen  thousand  dollars 
of  bonds  as  hereinafter  stated,  total  consideration  twenty 
thousand  dollars,  I,  Thomas  Barrett,  Jr.,  hereby  agree  to 
sell  to  said  trustee  all  options  owned  by  me  and  expiring 
May  1st,  1901,  for  the  purchase  of  land  fronting  on  the 
Savannah  River,  which  stand  in  my  name,  and  which  are 
of  record  in  Edgefield  County,  S.  C,  and  Lincoln  County,  Ga., 
to  which  reference  is  made. 

"This  sale  is  upon  the  condition  that  said  trustee  and  said 
G.  E.  Fisher  and  his  associates,  shall  proceed  to  organize  an 
incorporation  to  develop  a  water  power  of  not  less  than  15,000 
horse-power,  at  or  near  Ring  Jaw  Shoals,  on  the  Savannah 
•  River,  within  the  space  of  eight  (8)  months  from  this  date, 
and,  upon  the  completion  of  said  incorporation  to  deliver  me 
first  mortgage  bonds  of  the  corporation  for  fifteen  thousand 
doUars  ($15,000)  ;  said  corporation  not  to  issue  bonds  in  excess 
of  80  per  cent  of  the  amount  paid,  laid  out  and  expended  in 
the  purchase  of  the  various  tracts  of  land  and  the  land  covered 
by  these  options,  and  in  the  development  of  said  water  power, 
or  that  said  trustee  and  said  G.  E.  Fisher  and  his  associates 


665  APPENDIX  OF  FORMS  §  1316 

shall  have  the  privilege  of  paying  to  me  $15,000.00  in  cash 
instead  of  bonds, 

"  It  is  distinctly  understood  that  if  said  draft  for  five  thou- 
sand dollars  is  not  paid  on  presentation,  then  this  instrument 
is  absolutely  null  and  void,  and,  that  if  said  money  is  paid 
and  the  corporation  is  not  organized  and  the  bonds  herein- 
before specified,  issued  and  delivered  to  me  by  January  1st, 
1901,  or  fifteen  thousand  dollars  cash  paid  in  lieu  thereof, 
time  being  of  the  essence  of  the  contract,  then  this  sale  shall 
be  null  and  void,  and  the  sum  of  five  thousand  dollars  paid 
to  me  at  this  time  shall  not  be  accounted  for  by  me,  but  shall 
be  retained  by  me  as  the  amount  of  liquidated  damages  agreed 
upon  between  the  parties  hereto  for  a  violation  of  the  said 
contract,  and  all  options  to  be  returned  to  me  the  same  as  if 
this  sale  had  not  been  made. 

"W.  H.  Chew,  Trustee. 

"Thomas  Barrett,  Jr." 
Note:    Prom  Twin  City  Co.  v.  Barrett,  126  Fed.  302,  61  C.  C.  A.  288. 

Sec.  1316.  CHATTEL  MORTGAGE  —  OPTION  TO 
MORTGAGEE  TO  MATURE  DEBT  UPON  DEFAULT  BY 
MORTGAGOR  IN  PAYMENT  OF  PRINCIPAL  AND  IN- 
TEREST, IF  THE  MORTGAGOR  SELLS,  OR  REMOVES 
THE  CHATTELS,  OR  IF  ANY  WRIT  SHALL  BE 
LEVIED,  OR  IF  THE  MORTGAGEE  DEEMS  HIMSELF 
INSECURE. 

' '  And  the  said  mortgagor  hereby  covenants  and  agrees  that 
in  case  default  shall  be  made  in  the  payment  of  the  note 

aforesaid,  or  of  any  part  thereof,  or  the  interest 

thereon,  on  the  day  or  days  respectively  on  which  the  same 

shall  become  due  and  payable,  or  if  the  mortgagee 

executors,  administrators  or  assigns,  shall  feel  

insecure  or  unsafe,  or  shall  fear  diminution,  removal,  or  waste 
of  said  property;  or  if  the  mortgagor  shall  sell  or  assign,  or 
attempt  to  sell  or  assign,  the  said  goods  and  chattels,  or  any 
interest  therein ;  or  if  any  writ,  or  any  distress  warrant,  shall 
be  levied  on  said  goods  and  chattels,  or  any  part  thereof ;  then, 
and  in  any  or  either  of  the  aforesaid  cases,  all  of  said  note 

and  sum  of  money,  both  principal  and  interest, 

shall,  at  the  option  of  the  said  mortgagee  execu- 


§§  1317,  1318     LAW  OF  OPTION  CONTRACTS  666 

tors,  administrators  or  assigns,  become  at  once  due  and 
payable,  and  the  said  mortgagee executors,  admin- 
istrators or  assigns  or  any  of  them,  shall  thereupon  have  the 
right  to  take  immediate  possession  of  said  property,  and  for 
that  purpose,  may  pursue  the  same  wherever  it  may  be  found, 
and  may  enter  any  of  the  premises  of  the  mortgagor  with  or 
without  force  or  process  of  law,  wherever  the  said  goods  and 
chattels  may  be,  or  be  supposed  to  be,  and  search  for  the 
same,  and  if  found,  to  take  possession  of,  and  remove,  and 
sell,  and  dispose  of  the  said  property,  or  any  part  thereof, ' '  etc. 

Sec.  1317.  CHATTEL  MORTGAGE —  INSECURITY 
CLAUSE. 

"If  the  said  party  of  the  second  part  (mortgagee)  shall  at 
any  time  consider  the  possession  of  said  property,  or  any 
part  thereof,  essential  to  the  security  of  the  payment  of  said 
promissory  note,  then,  in  such  event,  the  said  party  of  the 
second  part,  his  agent  or  attorney,  executors,  administrators, 
or  assigns,  shall  have  the  right  to  the  immediate  possession  of 
said  described  property,  and  the  whole  or  any  part  thereof; 
and  shall  have  the  right,  at  his  option,  to  take  and  recover 
such  possession  from  any  person  or  persons  having  or  claim- 
ing the  same,  with  or  without  suit  or  process,  and  for  that 
purpose  may  enter  upon  any  premises  where  said  property, 
or  any  part  thereof,  may  be  found." 

Note:     From  Clark  v.  Baker,  6  Mont.  153,  9  P.  911.    See  also  Eichard- 
son  V.  Coffman,  87  Iowa  121,  54  N.  W.  356. 

Sec.  1318.  CHATTEL  MORTGAGE —  INSECURITY 
CLAUSE.   ANOTHER  FORM. 

"And  in  case  the  said  Elizabeth  Graham,  (mortgagee)  or 
her  attorney,  shall  at  any  time  deem  herself  insecure,  it  shall 
be  lawful  for  her,  or  her  attorney,  to  take  possession  of  said 
property,  and  sell  the  same  at  public  or  private  sale,  as  afore- 
said." 

NOTB :    From  Evans  v.  Graham,  50  Wis.  450,  7  N.  W.  380. 


667  APPENDIX  OF  FORMS  §§  1319-1321 

Sec.  1319.  CHATTEL  MORTGAGE —  INSECUKITl! 
AND  INTEREST  CLAUSES. 

"But  in  case  default  shall  be  made  in  the  payment  of  any 
of  said  notes,  or  in  the  interest  thereon,  or  any  part  thereof 
at  the  time  above  limited  for  the  payment  of  the  same,  or  if 
the  said  party  of  the  second  part  shall,  at  any  time,  deem 
itself  insecure,  it  shall  be  lawful  for  the  said  party  of  the 
second  part,  its  successors  or  assigns,  or  its  authorized  agent, 
to  enter  upon  the  premises  of  said  parties  of  the  first  part,  or 
any  part  thereof,  as  may  be,  and  take  possession  thereof,  and 

remove  the  same  to  any  place  within  the  state  of , 

and  to  sell  and  dispose  of  the  same, ' '  etc. 

Note:     From  Woods  v.  Gaar,  Scott  &  Co.,  93  Mich.  143,  53  N.  W.  14. 

Sec.  1320.  CHATTEL  MORTGAGE  —  INSECURITY, 
SALE,  AND  REMOVAL  CLAUSES. 

"The  said  John  H.  Cole  is  hereby  authorized,  at  any  time 
when  he  shall  deem  himself  insecure,  or  if  the  said  parties  of 
the  first  part  shall  sell,  assign,  or  dispose  of,  or  attempt  to  sell, 
assign,  or  dispose  of,  the  whole  or  any  part  of  the  said  goods 
and  chattels,  or  remove,  or  attempt  to  remove,  the  whole  or 
any  part  thereof  from  the  said  township  of  Sparta,  without  the 
written  assent  of  the  party  of  the  second  part,  then  and  from 
henceforth  it  shall  and  may  be  lawful  for  the  said  party  of 
the  second  part,  his  executors,  administrators,  or  assigns,  of 
his,  her,  or  their  authorized  agent,  to  enter  upon  the  premises 
of  the  said  party  of  the  first  part,  or  any  place  or  places  where 
the  said  goods  or  chattels,  or  any  part  thereof,  may  be,  and 
take  possession  thereof,  and  dispose  of  the  same  in  the  manner 
above  specified. ' ' 

Note:   From  Cole  v.  Shaw,  103  Mich.  505,  61  N.  W.  869. 

Sec.  1321.  CHATTEL  MORTGAGE— CLAUSE  GIVING 
OPTION  TO  MORTGAGEE  TO  MATURE  DEBT  IF 
MORTGAGOR  ATTEMPTS  TO  DISPOSE  OF,  OR  RE- 
MOVE PROPERTY. 

"And  I,  the  said  Lewis  Wells,  (mortgagor)  do  hereby  cove- 
nant and  agree  to  and  with  the  said  D.  N.  Wells,  (mortgagee) 
that  in  case  of  default  made  in  the  payment  of  the  above-men- 


§§  1322, 1323         LAW  OF  option  contracts  668 

tioned  promissory  note,  or  in  case  of  my  attempting  to  dispose 
of  or  remove  from  said  county  of  Polk  the  aforesaid  goods  and 
chattels,  or  any  part  thereof,  or  whenever  the  said  mortgagee 
shall  choose  so  to  do,  then  and  in  that  case  it  shall  be  lawful 
for  said  mortgagee  or  his  assigns,  by  himself  or  agent,  to  take 
immediate  possession  of  said  goods  and  chattels,  wherever 
found,  the  possession  of  these  presents  being  sufficient  author- 
ity therefor,  and  to  sell  the  same  at  public  auction,  or  so  much 
thereof  as  shall  be  sufficient  to  pay  the  amount  due,  or  to 
become  due,  as  the  case  may  be,  with  all  reasonable  costs  per- 
taining to  the  taking,  keeping,  advertising  and  selling  of  said 
property." 

Note:  From  Wells  v.  Chapman,  59  Iowa  658,  13  N.  W.  841. 

Sec.  1322.  CHATTEL  MORTGAGE— TAX  AND  AS- 
SESSMENT CLAUSE. 

"And  it  is  hereby  covenanted  and  agreed,  in  further  con- 
sideration of  the  premises,  that upon  default  in  the 

payment  of  any  taxes  or  other  assessments,  or  default  in  the 
payment  of  any  debt  or  obligation  which  may  become  a  lien 
upon  the  said  property  hereby  mortgaged,  that  from  hence- 
forth it  shall  and  may  be  lawful  for  the  parties  of  the  second 

part  (mortgagees), at  their  option,  to  declare  the 

whole  remaining  indebtedness  then  unpaid  to  be  due  and  pay- 
able at  once,  and  to  grant,  bargain,  sell,  and  dispose  of  said 
before-mentioned  property  and  all  benefit  and  equity  of 
redemption  of  said  party  of  the  first  part,  according  to  the 

laws  of ,  paying  to  the  said  party  of  the  first  part 

(mortgagor)  the  overplus  of  the  purchase  money  to  be  obtained 
therefor  after  the  satisfaction  of  the  principal  and  interest  due 
on  said  debt  aforesaid,  the  costs  of  advertising  and  sale,  and 
costs  of  foreclosing,  with  attorney's  fees  and  commissions  to 
be  due  on  said  foreclosure  and  the  collection  of  said  debt." 

Note:  From  Jones  v.  Norton,  136  Ga.  835,  72  S.  E.  337. 

Sec.  1323.  LEASE  OF  LAND  WITH  OPTION  TO  PUR- 
CHASE, AND  PROVISION  AS  TO  IMPROVEMENTS. 

"Article  of  agreement  made  and  entered  into  this  twenty- 
first  day  of  February,  1880,  between  Simeon  B.  Bell,  of  the 


669  APPENDIX  OF  FORMS  §  1324 

first  part,  and  T.  "W.  Wright,  of  the  second  part :  Witnesseth, 
that  the  said  Simeon  B.  Bell,  of  the  first  part,  rents,  leases,  and 
bargains  to  the  party  of  the  second  part  a  certain  tract  of  land 
described  and  bounded  as  follows,  namely : 

(Description  of  property.) 

' '  To  have  and  to  hold  said  land  for  stock,  fruit,  and  garden- 
ing purposes  for  a  period  of  ten  years  from  this  date.  The  gas- 
well  is  included  in  said  lease. 

"In  consideration  of  which,  the  party  of  the  second  part 
agrees  to  pay  to  said  Bell  the  sum  of  thirty  dollars  per  year; 
the  sum  of  seven  dollars  and  fifty  cents  quarterly  in  advance ; 
to  pay  all  lawful  taxes  on  said  land  when  due;  to  fence  said 
land  with  a  good  five-board  fence,  except  along  the  Rosedale 
road;  and  to  maintain  and  keep  in  repair  all  of  said  fence 
while  in  possession.  And  it  is  further  agreed  by  these  parties 
that  this  lease  is  transferable,  and  that  all  buildings  erected 
on  said  land  may  be  removed,  unless  the  parties  in  interest 
can  agree  on  the  purchase  and  sale  of  the  same;  but  that  all 
shade-trees,  and  fruit-trees,  bushes,  small  fruit,  shrubs,  vine- 
yards, and  berry-plants  shall  be  preserved,  and  fences  also 
shall  be  left  and  remain  on  said  premises  as  part  of  the  same ; 
and  further,  that  if  the  above  stipulations  are  not  fulfilled 
and  complied  with,  such  failure  at  any  time  renders  this 
lease  void,  and  the  property  reverts  to  the  original  owner. 
Further,  the  said  Simeon  B.  Bell  agrees  to  take  three  hundred 
and  fifty  dollars  ($350)  per  acre  for  said  land  if  purchased 
and  paid  for  within  two  years.  Said  lease  to  take  effect 
March  1,  1880. 

"In  witness  whereof  we  have  hereunto  set  our  hands  and 
seals  this  twenty-first  day  of  February,  1880. 

Simeon  B.  Bell, 
T,  W.  Wright." 

(Acknowledged  and  certified  if  desired.) 

Note:  From  BeU  v.  Wright,  31  Kan.  236,  1  P.  595, 

Sec.  1324.  LEASE  AND  OPTION  TO  LESSEE  TO 
PURCHASE. 

"This  indenture  made  this  24th  day  of  November,  1899, 
wherein  Mrs.  C.  Anderson  is  party  of  the  first  part,  and  Lewis 
Anderson  party  of  the  second  part,  wherein  the  party  of  the 


§  1325  LAW  OF  OPTION  CONTRACTS  670 

first  part  leases  to  the  party  of  the  second  part  the  (76  acres) 
seventy-six  acres  located  in  S.  W.  i/4  of  sec.  15,  Adams  town- 
ship, for  the  term  of  ten  years  (10  yrs.).  The  party  of  the 
second  part  agrees  to  pay  rent  to  the  amount  of  $300  per 
annum  as  follows :  $150  October  1,  1900,  and  $150  March  1, 
1910,  each  year  thereafter  at  the  same  time  and  rate.  The 
party  of  the  first  part  further  agrees  to  sell  to  the  party  of 
the  second  part  at  any  time  if  the  party  of  the  second  part  so 
desires,  at  the  sum  of  eighty-five  [dollars]  ($85)  per  acre. 
Party  of  the  second  part  also  agrees  to  haul  out  manure  on 
said  land  and  to  farm  same  in  a  workmanlike  manner. 

.  Mrs.  C.  Anderson, 

(seal)  Lewis  Anderson." 

Note:  From  Anderson  v.  Anderson,  251  HI.  415,  96  N.  E.  265,  Ann. 
Cas.  1912C,  556. 

Sec.  1325.  LEASE  OF  LAND  WITH  OPTION  TO  PUR- 
CHASE, WITH  PROVISION  EXTENDING  COVENANTS 
TO  HEIRS,  EXECUTORS  AND  ADMINISTRATORS  OF 
THE  PARTIES. 

' '  Know  all  men  by  these  presents  that  I,  Horace  L.  Sage,  of 
the  county  of  Marshall  and  state  of  Kansas,  for  and  in  con- 
sideration of  the  covenants  of  Charles  Bras,  hereinafter  set 
forth,  do  by  these  presents  lease  unto  the  said  Charles  Bras, 
of  the  county  of  Marshall  and  state  of  Kansas,  the  following 
described  property,  to  wit :  Southeast  quarter  of  section  fifteen, 
township  three  south,  of  range  seven  east ;  to  have  and  to  hold 
the  same  for  a  period  of  five  years  from  this  date,  February  5th, 
A.  D.  1883,  provided  said  lessee  shall  pay  the  rental  for  said 
premises  as  hereinafter  set  forth  at  the  time  when  the  said 
payments  become  due,  and  keep  the  property  fully  insured 
against  losses  by  fire,  wind,  and  lightning ;  and  the  said  Charles 
Bras  agrees  to  pay  the  said  Horace  L.  Sage  one  hundred  and 
forty-four  dollars  annually  at  the  expiration  of  each  year,  and 
to  pay  all  taxes  which  may  be  levied  on  said  lands  when  the 
same  become  due,  as  rent.  The  said  Charles  Bras  further 
covenants  with  the  said  Horace  L.  Sage  that  at  the  expiration 
of  the  time  mentioned  in  this  lease  peaceable  possession  [of 
said  premises]  shall  be  given  to  said  lessor  [and]  in  as  good 
condition  as  they  now  are,  the  usual  wear  excepted ;  and  that, 


671  APPENDIX  OP  FORMS  §  1326 

upon  the  nonpayment  of  the  whole  or  any  portion  [of  the 
rent]  to  be  paid,  the  said  lessor  may,  at  his  election,  either 
distrain  [for]  said  rent  due,  or  declare  this  lease  at  an  end, 
and  recover  possession  as  if  the  same  was  held  by  forcible 
detainer;  the  said  lessee  hereby  waiving  any  notice  of  such 
election,  or  any  demand  for  the  possession  of  said  premises. 
And  it  is  further  covenanted  and  agreed  by  the  said  parties 
that  the  said  Charles  Bras  shall  have  the  right  to  purchase 
said  premises,  if  he  so  elect,  at  the  stipulated  sum  of  twelve 
hundred  dollars,  at  the  expiration  of  this  lease  j  and  if  the 
said  lessee  elect  to  purchase,  as  above  set  forth,  to  make  a 
good  and  sufficient  title,  warranting  to  said  purchaser  said 
premises,  except  taxes  and  tax  titles.  The  covenants  herein 
shall  extend  to  and  be  binding  upon  the  heirs,  executors,  and 
administrators  of  the  parties  to  this  lease.  Witness  the  hands 
and  seals  of  the  parties  aforesaid,  this  fifth  day  of  February, 
A.  D.  1883.   Horace  L.  Sage,  Charles  E.  Bras." 

Note:  From  Bras  v.  Sheffield,  49  I?^n.  702,  31  P.  306,  33  A.  S.  R.  386. 

Sec.  1326.  AGREEMENT  TO  EXECUTE  LEASE  OF 
LAND  FOR  NINETY-NINE  YEARS  WITH  OPTION  TO 
LESSEE  TO  PURCHASE. 

''Received  of  Franklin  E.  Bushman  the  sum  of  $250,  which 
is  hereby  acknowledged,  to  apply  upon  the  first  six  months' 
rental  of  the  property  known  as  lots  37,  38,  39  and  40  of 
block  85  of  Governor  and  Judges'  Plan,  situated  in  the  city 
of  Detroit,  county  of  Wayne  and  state  of  Michigan,  consisting 
of  160  feet  on  the  south  side  of  Columbia  Street  West,  between 
Woodward  and  Park  street.  The  balance,  $1250,  to  be  paid  on 
or  before  sixty  days  from  the  date  hereof,  abstract  to  be 
brought  down  showing  good,  merchantable  title.  It  is  under- 
stood that  the  said  John  J.  Faltis  is  to  execute  a  lease  on  the 
above  described  premises  to  Frank  E.  Bushman,  or  any  corpo- 
ration to  be  incorporated  for  a  period  of  ninety-nine  years, 
from  and  after  the  first  day  of  August,  1913,  the  rental  for  the 
period  of  said  term  to  be  as  follows :  $3000  per  year  net,  for 
three  years,  free  of  all  taxes  and  assessments  that  may  be 
levied  against  the  above  property.  For  the  balance,  ninety-six 
years,  the  rental  shall  be  $4000  per  year  net,  free  of  all  taxes 


§§  1327, 1328         LAW  OF  option  contracts  672 

and  assessments.  It  is  understood  and  agreed  that  the  said 
John  J.  Faltis  agrees  to  sell  to  the  said  lessee,  on  or  before  ten 
years  from  the  execution  of  the  above  lease,  the  property 
described  herein,  for  the  sum  of  $100,000.  It  is  understood 
and  agreed  upon  that  there  shall  be  no  restrictions  as  to  the 
kind  or  class  of  buildings  that  the  said  lessee  may  desire  to 
erect  and  that  he  may  have  the  privilege  of  subletting  the 
above  premises.  We  hereby  set  our  hand  and  seal  this  twenty- 
fourth  day  of  July,  1913.  John  J.  Faltis.  ' ' 

Note:  From  Bushman  v.  Faltis,  (Mich.)  150  N.  W.  848. 

Sec.  1327.  OPTION  IN  LEASE  GIVING  THE  LESSEE 
THE  RIGHT  TO  PURCHASE  AND  ALSO  GIVING  THE 
LESSOR  THE  RIGHT  OR  OPTION  OF  REPURCHASE 
ON  CERTAIN  CONTINGENCIES. 

''At  the  expiration  of  this  lease,  or  upon  the  sale  of  said 
property  by  said  Bacon,  or,  in  case  of  his  death,  the  said  com- 
pany, by  their  authorized  agent,  shall  have  the  right  to  pur- 
chase the  said  land  now  leased  for  the  sum  of  one  hundred 
dollars  per  acre,  payment  to  be  in  cash  at  the  time  the  deed  is 
made  and  the  land  taken  by  said  company.  If,  after  purchase, 
the  company  shall  decide  to  discontinue  using  said  lots  for 
stock  purposes,  the  said  Bacon  or  his  heirs  shall  have  the 
refusal  to  repurchase  the  same  at  the  same  price  per  acre  for 
the  land,  and  to  pay  for  all  improvements  that  may  be  put  on 
said  land,  including  the  fencing,  provided  they  agree  to  do  so 
within  ninety  days  after  the  same  shall  be  offered  to  them." 

Note:  From  Bacon  v.  Kentuckj  Cent.  Ej,  Co.,  95  Ky.  373,  25  S.  W. 
747,  16  Ky.  L.  Eep.  77. 

Sec.  1328.  CLAUSE  IN  LEASE  GIVING  THE  LESSOR 
THE  RIGHT  TO  TAKE  BUILDINGS  OF  LESSEE  AT  A 
PRICE  TO  BE  FIXED  BY  THREE  VALUERS,  AND  IF 
NOT  TAKEN,  THE  LEASE  TO  BE  RENEWED  FOR 
ANOTHER  TERM. 

"And  it  is  further  covenanted  by  and  between  the  parties 
hereto  that  at  the  expiration  of  said  term  of  five  years  the 
parties  of  the  first  part,  their  executors,  administrators,  or 
assigns,  shall  have  the  right,  in  their  election,  to  purchase  and 


673  APPENDIX  OP  FORMS  §  1328 

take  of  and  from  the  party  of  the  second  part,  his  executors, 
administrators,  or  assigns,  the  buildings  erected  by  him  or 
them,  or  being  on  said  premises,  at  a  valuation  thereof,  not  to 
exceed  $10,000,  to  be  made  by  three  disinterested  persons,  to 
be  chosen  in  the  usual  manner,  and  upon  such  purchase  to 
re-enter  upon  said  premises,  and  the  same  to  have  again  as  in 
their  former  estate  and  right.  And  if  the  parties  of  the  first 
part,  their  executors,  administrators,  or  assigns,  elect  not  to 
make  such  purchase,  then  this  lease,  at  the  then  rental  value 
of  the  premises,  to  be  determined  by  a  reference,  in  the  manner 
above  set  forth,  shall  stand  continued  for  another  term  of  five 
years.  And  in  like  manner,  at  every  succeeding  term  of  five 
years,  the  same  election  as  above  reserved  by  the  parties  of  the 
first  part,  their  executors,  administrators,  or  assigns,  shall  be 
had ;  and  if  the  buildings  and  improvements,  as  above  limited, 
are  not  purchased  and  taken,  then  this  lease,  at  the  then 
rental  value,  to  be  determined  as  above  described,  and  upon 
the  other  terms  and  conditions  above  set  forth,  shall  stand 
continued  for  another  term  of  five  years.  And  then  the  build- 
ings and  improvements  placed  or  made  upon  said  premises 
shall  remain  thereon  as  a  security  for  the  execution  of  the 
covenants  herein  contained,  on  the  part  of  the  said  party  of 
the  second  part,  unless  said  lessors,  or  some  persons  authorized 
thereto,  shall  consent  in  writing  to  the  removal  of  the  same, 
or  any  part  thereof :  Provided,  always,  and  these  presents  are 
upon  this  condition,  that  if  it  shall  happen  that  the  rent  hereby 
reserved,  or  any  part  thereof,  shall  be  behind  and  unpaid  after 
the  same  ought  to  be  paid  according  to  the  reservation  thereof, 
or  if  the  party  of  the  second  part,  his  executors,  administrators, 
or  assigns,  shall  not  well  and  truly  observe,  keep,  and  perform 
all  and  singular  the  covenants,  conditions,  and  agreements 
herein  contained,  on  his  and  their  part  to  be  observed,  kept, 
and  performed,  according  to  the  true  intent  and  meaning 
thereof,  then,  and  in  any  of  the  said  cases,  immediately  upon 
the  happening  thereof,  this  lease,  and  everything  herein  con- 
tained, on  the  part  of  the  parties  of  the  first  part,  henceforth 
to  be  done  and  performed,  shall  cease,  determine,  and  be 
utterly  void,  anything  herein  contained  to  the  contrary  not- 
withstanding." 

Note:   From  Brush  v.  Beecher,  et  al.,  110  Mich.  597,  68  N.  W.  421. 
43 — Option  Contracts. 


§  1329  LAW  OF  OPTION  CONTRACTS  674 

Sec.  1329.  CLAUSE  IN  LEASE  REQUIRING  LESSEE 
TO  ERECT  BUILDING  AND  LESSOR  "TO  TAKE"  THE 
BUILDING  AT  END  OF  TERM,  AT  ITS  VALUE  TO  BE 
DETERMINED  BY  THREE  APPRAISERS,  AND  FUR- 
THER PROVIDING  THAT  IF  LESSOR  SHALL  ELECT 
TO  RENEW  FOR  A  FURTHER  TERM,  THE  BUILDING 
ERECTED  SHALL  BELONG  TO  LESSOR. 

"Said  second  party  (lessee)  is  hereby  permitted  and  agrees 
to  erect  a  building  to  reasonably  occupy  the  space  between  the 
buildings  now  on  said  property  and  the  new  Wayne  County 
Savings  Bank,  to  cost  not  to  exceed  five  thousand  dollars, 
($5,000)  and  to  be  of  equal  height  with  the  building  now  on 
said  corner.  Said  first  party  (lessor)  agrees  to  take  said  build- 
ing to  be  erected  so  as  aforesaid  by  said  second  party,  at  its 
value  at  the  termination  of  said  five  years,  said  value  to  be 
determined  by  three  appraisers,  to  be  chosen  in  the  usual  way ; 
but  the  appraisal  to  be  made  by  them  shall  be  upon  the  basis 
of  the  cost  of  said  building,  not  to  exceed  five  thousand  dollar^ 
when  finished,  and  any  deterioration  by  wear,  breakage,  or 
faulty  construction  to  be  deducted  therefrom;  but  if  such 
building  shall  not  be  worth  cost,  less  such  deterioration,  then 
it  shall  be  appraised  at  its  then  actual  cash  value.  In  case, 
however,  said  first  party  shall  elect  at  the  termination  of  said 
five  years  to  renew  this  lease  for  a  further  term  of  five  years. 
upon  the  same  terms  above  stipulated,  she  shall  be  entitled, 
at  the  end  of  said  second  term,  to  said  building  so  to  be  erected 
as  aforesaid,  and  to  receive  from  said  second  party,  free  of 
any  charge  or  claim,  a  bill  of  sale  thereof.  Said  second  party 
also  agrees  that  he  will  not  assign  or  transfer  this  lease  with- 
out the  written  assent  of  said  first  party;  and  at  the  end  of 
the  said  term  shall  and  will  peaceably  and  quietly  leave,  sur- 
render, and  yield  up  the  buildings  now  on  said  premises  unto 
the  said  party  of  the  first  part,  her  heirs  or  assigns,  in  as  good 
condition  as  when  possession  is  given,  damages  by  the  ele- 
ments excepted." 

Note:  From  Darling  v.  Hoban,  83  Mich.  599,  19  N.  W.  545. 


675  APPENDIX  OF  FORMS  §  1330 

Sec.  1330.  AGREEMENT  FOR  LEASE  WITH  COVE- 
NANT BY  LESSEE  TO  ERECT  BUILDINGS  AND  WITH 
OPTION  TO  LESSOR  TO  EXTEND  LEASE  IN  PERPET- 
UITY, OR  TO  PURCHASE  THE  BUILDING  AT  THE 
APPRAISED  VALUE,  OR  TO  SELL  THE  LOT  TO  THE 
LESSEE  AT  THE  APPRAISED  VALUE,  WITH  PRO- 
VISIONS FOR  APPRAISEMENT. 

This  Indenture  made  the  first  day  of  October  in  the  year 
of  our  Lord  one  thousand  eight  hundred  and  sixty-seven, 
Witnesseth :  That  Eben  Steele  of  Portland,  Maine,  doth  hereby 
lease,  demise,  and  let  unto  Thaddeus  C.  Lems,  of  said  Port- 
land, a  store  lot  on  the  northerly  side  of  IMiddle  Street,  in 
said  Portland,  between  the  lot  now  OM^ned  by  the  heirs  of  the 
late  Martha  F.  Trask,  and  the  lot  now  owned  by  David  Keazer, 
and  which  was  conveyed  to  me  by  the  Ocean  Insurance  Com- 
pany, by  deed  dated  May  6,  1847,  and  recorded  in  the  Cum- 
berland Registry,  Book  203,  Page  71,  a  division  of  the  whole 
lot  having  afterwards  been  made,  between  said  Steele  and 
said  Trask  heirs,  owners,  of  the  other  moiety,  and  the  eastern 
half  conveyed  to  said  Steele,  in  severalty,  which  is  now  hereby 
leased  to  said  Lewis,  subject  to  the  agreement  of  April  20, 
1831,  between  William  McLellan  and  others,  and  recorded 
Book  126,  Page  158. 

To  hold,  for  the  term  of  twenty-five  (25)  years  from  the 
first  day  of  October,  1867,  yielding  and  paying  therefor,  the 
rent  of  four  hundred  and  fifty  dollars  per  year.  And  the  said 
Lessee  doth  covenant  to  pay  the  said  rent  in  quarterly  pay- 
ments, as  follows,  viz:  One  hundred  and  twelve  [and]  50/100 
dollars,  on  the  first  day  of  January,  April,  July  and  October 
annually;  and  also  within  one  year,  to  erect  on  said  premises 
a  store  of  three  stories  of  brick,  iron  and  stone,  of  good  style, 
and  to  continue  to  maintain  on  said  premises,  such  building, 
or  one  of  equal  value  during  the  term,  and  to  pay  all  taxes 
duly  assessed  thereon,  during  the  term,  and  for  such  further 
time  as  the  Lessee  may  hold  the  same.  At  the  end  of  said 
term  of  twenty-five  years,  the  Lessor,  or  his  representatives, 
shall  have  the  privilege  of  extending  this  lease,  by  a  perpetual 
lease  forever,  to  the  Lessee,  or  his  assigns,  at  the  above 
described  rent  and  taxes;  or,  if  the  Lessor,  or  his  assigns  or 
representatives  prefer,  they  may  have  an  appraisal  of  the  lot. 


§  1331  LAW  OF  OPTION  CONTRACTS  676 

and  building  thereon,  with  the  option  on  their  part,  of  pur- 
chasing such  building  at  such  appraised  value  or  of  selling 
to  the  Lessee  or  his  representatives  the  lot  at  such  appraised 
value,  -whichever  the  Lessor,  his  assigns,  or  representatives 
may  then  elect.  Each  party,  on  request,  to  choose  an  appraiser, 
and  the  two  selected,  to  choose  a  third;  and  if  either  party 
neglects  to  choose  an  appraiser,  such  appraiser  is  to  be  selected 
for  such  party,  by  the  Judge  of  Probate  of  Cumberland 
County;  and  the  appraisal  of  a  majority  of  such  appraisers 
to  be  conclusive  in  case  of  disagreement. 

And  the  said  Lessee  doth  hereby  covenant,  for  himself,  his 
heirs  and  representatives,  to  purchase  said  lot  at  such 
appraisal,  or  to  convey  said  building  to  the  Lessor,  or  his  rep- 
resentatives, according  to  the  decision  and  election  of  said 
Lessor,  or  his  representatives  or  to  execute  and  complete  a 
perpetual  lease  of  said  lot,  as  before  stipulated,  at  the  end  of 
said  term,  if  the  Lessor,  or  his  representatives  shall  demand 
such  lease.  The  building  erected  on  said  lot  is  hereby  pledged 
and  conveyed  to  the  lessor,  his  heirs,  executors,  and  assigns, 
as  security  for  the  faithful  performance  of  this  agreement,  and 
every  covenant  therein  by  the  Lessee,  his  heirs,  executors  or 
assigns.  And  the  Lessor  may  enter,  to  expel  the  Lessee,  and  his 
assigns,  if  he  or  they  shall  fail  to  pay  the  rent  aforesaid, 
whether  said  rent  be  demanded  or  not,  or  if  they  shall  violate 
any  of  the  covenants  of  this  lease,  by  them  to  be  performed. 

In  Witness  Whereof  the  parties  have  hereunto  set  their 
hands  and  seals,  the  day  and  year  first  above  written. 

Eden  Steele,  (seal) 

Thaddeus  C.  Lewis,     (seal) 
In  Presence  of 

Tpiomas  R.  Hayes. 

Woodbury  Robinson. 

Note:  From  York  County  Sav.  Bank  ▼.  Abbot,  131  Fed.  980,  139  Fed. 
988. 

Sec.  1331.  OPTION  IN  LEASE  FOR  EXTENSION 
UPON  NOTICE,  AND  OPTION  TO  LESSEE  TO  PUR- 
CHASE WITH  PROVISION  AS  TO  RENTS. 

"And  the  said  John  Snyder  further  covenants  and  agrees 
to  and  with  the  said  party  of  the  second  part  that  he  will  let 


677  APPENDIX  OF  FORMS  §§  1332, 1333 

and  demise  to  them  the  premises  hereby  demised  for  a  fur- 
ther term  of  five  years  from  the  expiration  of  the  term  hereby 
created,  and  upon  the  same  terms  as  to  amount  and  payment 
of  rent,  if  the  said  party  of  the  second  part  shall  so  desire, 
and  shall  give  notice  hereof  at  least  three  months  before  the 
expiration  of  this  lease;  and  further,  that  if  the  said  party 
of  the  second  part  shall  desire  to  purchase  the  demised  prem- 
ises, that  he  will  at  any  time  during  the  tenancy  hereby  created 
or  agreed  upon,  for  the  consideration  of  seven  thousand  dol- 
lars, sell  and  convey  by  warranty  deed,  with  the  usual  full 
covenants,  free  and  clear  of  all  incumbrances,  the  demised 
premises  to  the  said  party  of  the  second  part,  or  such  person 
or  persons  as  they  shall  desire,  upon  their  giving  to  him,  his 
heirs,  executors,  or  administrators,  notice  that  they  desire 
such  conveyance;  such  conveyance  to  be  made  \^^thin  thirty 
days  after  the  giving  of  such  notice,  and  the  payment  of  rent 
to  cease  at  the  delivery  of  such  deed,  and,  if  not  delivered 
within  said  thirty  days,  then  said  rent  to  cease  at  the  end  of 
that  time." 

Note:  From  Congregation  etc.  v.  Gerbert,  57  N,  J.  L.  395,  31  Atl.  383. 

Sec.  1332.     OPTION  TO  LESSEE  TO  EXTEND  LEASE. 

"The  party  of  the  second  part,  upon  the  expiration  of  the 
said  term  of  one  year,  shall  have  the  right  at  its  option  to 
continue  this  agreement  and  lease  for  another  full  term  of 
five  years  beginning  April  1,  1900,  at  the  same  yearly  rental, 
i.  e.,  $125  payable  as  aforesaid  with  the  right  and  option  to 
have  an  extension  and  continuance  hereof  at  the  same  yearly 
rental  at  the  end  of  said  first  term  of  five  years  for  another 
full  term  of  five  years." 

Note  :  From  Atlantic  Product  Co.  t.  Dunn,  142  N.  C.  471,  55  S.  E.  299. 

Sec.  1333.  LEASE  WITH  OPTION  TO  LESSEE  TO 
RENEW,  WITH  PROVISION  AGAINST  SECOND  RE- 
NEWAL. 

"Knov)  all  men  hy  these  presents: 

"That  this  contract  and  indenture  made  and  entered  into 
this  twenty-second  day  of  January,  A.  D.  1906,  by  and  between 
Judson  Briggs,  of  Brownville,  and  Ezekiel  L.  Chase,  also  of 


§  1333  LAW  OF  OPTION  CONTRACTS  678 

said  Brownville,  witnesseth:  That  the  said  Briggs  in  con- 
sideration of  the  covenants  and  agreements  hereinafter  set 
forth  and  indicated  on  the  part  of  said  Chase  hereby  leases 
and  demises  unto  said  Chase  the  following  described  premises 
and  appurtenances,  situate  in  said  Brownville. 

(Description  of  property.) 

"To  have  and  to  hold  for  the  term  of  one  year  from  the 
date  hereof,  with  the  privilege  on  the  part  of  said  Chase  of 
renewing  on  the  same  rental  for  any  term  not  exceeding  ten 
years  from  the  expiration  of  said  one-year  term. 

"Yielding  and  paying  therefor  the  sum  of  ($160.00)  one 
hundred  sixty  dollars  per  year,  same  to  be  paid,  and  such 
rental  to  be  in  full  for  rent,  heat  and  light  as  aforesaid. 

"And  the  said  Chase  hereby  accepts  the  said  premises  as 
described  and  for  the  term  aforesaid,  and  covenants  to  and 
with  the  said  Briggs  to  pay  the  rent  as  stipulated  and  in  the 
manner  stipulated,  and  to  quit  and  surrender  up  the  said 
premises  at  the  expiration  of  this  or  of  the  renewal  term,  in 
good  order  and  condition  as  the  same  now  are  or  may  be  put 
into  by  said  Briggs,  reasonable  use  and  wear  thereof,  fire  and 
other  unavoidable  casualty  excepted,  and  not  to  use  the  said 
premises  for  any  purpose  usually  denominated  as  extra- 
hazardous, and  not  to  sublet  the  same  without  the  consent 
in  writing  of  the  said  Briggs  first  obtained. 

"It  is  mutually  understood  that  the  said  right  of  renewal 
as  stipulated  shall  be  wholly  optional  with  the  said  Chase, 
and  that  such  renewal,  while  in  all  other  respects  the  same 
as  is  this  lease,  shall  contain  no  further  right  of  renewal 
except  by  mutual  agreement. 

' '  In  Witness  "Whereof  the  parties  hereto  have  hereunto  set 
their  hands  and  seals  this  day  and  year  first  above  written. 

* '  JuDsoN  Briggs.    (  l.  s.  ) 
"E.L.Chase.         (l.s.)" 

Notb:  From  Briggs  t.  Chase,  105  M&.  317,  74.  Atl.  796. 


679  APPENDIX  OP  FORMS  §  1334 

Sec.  1334.  OPTION  IN,  TO  RENEW  ANNUALLY  FOR 
FOUR  SUCCESSIVE  YEARS,  WITH  PROVISION  RE- 
SERVING THE  RIGHT  TO  THE  LESSOR  TO  SELL  THE 
PREMISES. 

"State  of  Texas,  Tom  Green  County.  This  agreement,  made 
and  entered  into  this  1st  day  of  September,  1891,  by  and 
between  F.  B.  Ewing  and  J.  R.  Frost,  as  lessors,  acting  herein 
by  said  F.  B.  Ewing,  of  the  first  part,  and  J.  S.  Miles,  lessee, 
of  the  second  part,  witnesseth:  1st.  That,  for  the  considera- 
tion hereinafter  specified  and  agreed  to  be  paid,  the  said 
parties  of  the  first  part  have  leased  and  let,  and  by  these 
presents  do  lease  and  let,  unto  the  said  party  of  the  second 
part,  J.  S.  Miles,  for  the  full  term  of  one  year  from  and  after 
September  1st,  1891,  next  ensuing,  the  following  described 
premises,  situate  in  Tom  Green  County,  State  of  Texas,  to- wit : 

(Description.) 

"To  have  and  to  hold  said  premises,  with  the  rights  and 
privileges  thereto  belonging,  unto  him,  the  said  J.  S.  Miles 
(lessee),  from  September  1st,  1891,  up  to  and  including  the 
31st  day  of  August,  1892.  2nd.  The  consideration  for  this 
lease  is  the  monthly  rental  of  fifty  ($50)  dollars  per  month, 
to  be  paid  at  the  end  of  each  month,  during  the  term  afore- 
said, in  cash;  and,  to  secure  the  payment  of  the  same,  it  is 
understood  and  agreed  that  the  lessors  shall  have  and  retain 
the  landlord's  lien  on  all  the  personal  property  of  the  lessee 
situate  in  said  leased  premises.  3rd.  And  the  lessee  promises 
and  agrees  to  occupy  said  premises  for  the  term  aforesaid, 
and  during  any  renewal  of  this  lease,  as  the  tenant  of  said 
lessors;  to  pay  the  monthly  rental  above  specified  promptly 
at  the  end  of  each  current  month ;  and  not  to  sublet  said 
premises  or  assign  this  lease  without  the  written  consent  of 
the  lessors  first  obtained.  4th.  It  is  understood  and  agreed 
that  the  lessee  shall  have  the  right  hereby  expressly  granted 
him  to  renew  this  lease  at  the  end  of  the  term  hereof  for 
another  term  of  twelve  months  next  succeeding  the  term 
hereof,  and  so  on  for  four  consecutive  years  from  August  31st, 
1892,  at  the  same  rental  as  above  specified,  payable  at  the  end 
of  each  month ;  provided,  that  the  lessors  shall  have  the  right 
at  any  time  to  sell  said  premises,  and  in  case  of  sale  the 
lessee  shall  surrender  possession  of  said  premises  to  the  pur- 


§  1335  LAW  OF  OPTION  CONTRACTS  680 

chaser  at  tlie  end  of  the  current  year  during  which  the  sale 
shall  be  made,  and  such  sale  shall  terminate  the  rights  of  the 
lessee  at  the  end  of  each  current  year;  but  nothing  herein 
shall  be  construed  to  require  the  lessee  to  surrender  possession 
except  at  the  end  of  the  current  year  during  which  the  sale 
shall  be  made,  if  the  rents  shall  be  promptly  paid  as  herein 
stipulated.  Witness  the  hands  of  the  parties  this  day  and 
date  first  above  written.  Ewing  &  Frost,  Lessors,  per  F.  B. 
Ewing.  J.  S.  Miles,  Lessee." 

Note:   From  Ewing  v.  Miles,  12  Tex.  Civ.  App.  19,  33  S.  W.  235. 

Sec.  1335.     OPTION  ON  MINERAL  RIGHTS  IN  LAND. 

"For  and  in  consideration  of  one  dollar  in  hand  paid,  the 
receipt  of  which  is  hereby  acknowledged,  as  well  as  in  con- 
sideration of  the  sum  of  $200,  to  be  paid  as  follows,  viz :  In 
cash  upon  the  delivery  of  the  deeds, — we  hereby  sell  and 
agree  to  convey  by  deed  of  general  warranty  to  Elias  H. 
Kerce,  successors  and  assigns,  subject  to  purchaser's  exami- 
nation of  the  title,  all  the  mineral  interest  in  that  certain 
piece  or  parcel  of  land  situated  in  Floyd  County,  and  State 
of  Georgia,  bounded  and  described  as  follows:  Lot  138  in 
23rd  district,  third  section, — together  with  all  mineral  rights 
and  privileges,  wood,  water,  and  right  of  way, — containing 
one  hundred  and  twenty-eight  acres,  more  or  less.  A  deed  to 
be  executed  and  delivered  to  said  Elias  H.  Kerce,  his  heirs, 
successors,  or  assigns,  at  any  time  within  two  hundred  days, 
upon  the  payment  of  the  balance  of  the  purchase  money ;  and, 
in  case  the  balance  of  the  purchase  money  is  not  paid  as 
before  stated,  then  this  agreement  to  be  null  and  void,  and  the 
money  paid  thereon  to  be  considered  as  forfeited  to  the  under- 
signed as  liquidated  damages.  For  the  faithful  performance 
of  the  covenants  herein  contained,  we  bind  ourselves  by  these 
'  presents.  Witness  our  hands  and  seals  this  16th  day  of  Janu- 
ary, 1896.  (Signed)  R.  B.  Maddox.  (Seal.)  J.  H.  Maddox. 
(Seal.)  M.  0.  Maddox.  (Seal.)  A.  E.  Maddox.  (Seal.)  In 
presence  of  J.  E.  Almon." 

Note:  From  Black  v.  Maddox,  104  Ga,  157,  30  S.  E.  723. 


681  APPENDIX  OF  FORMS  §  1336 

Sec.  1336.  OPTION  TO  PURCHASE  COAL  IN  CER- 
TAIN LAND. 

"Article  of  agreement  made  November  23,  1900,  between 
Robert  Mitchell,  of  Indiana  Borough,  Indiana  County,  and 
State  of  Pennsylvania,  of  the  first  part,  and  S.  M.  McHenry, 
of  White  Township,  Indiana  County,  Pa.,  of  the  second  part, 
witnesseth :  That  the  said  party  of  the  first  part,  for  the  con- 
sideration hereinafter  mentioned,  hereby  agrees  to  sell  and 
convey  by  deed  of  general  warranty,  clear  of  all  incumbrances, 
unto  the  said  party  of  the  second  part,  his  heirs  and  assigns, 
all  the  coal  of  whatever  kind  in  and  under  all  that  certain 
tract  of  land  situate  in  White  Township,  Indiana  County,  and 
state  aforesaid,  bounded  and  described  as  follows; 

(Description.) 

"Together  with  the  full,  perpetual  and  exclusive  right  to 
enter  in,  upon,  and  under  the  said  lands  to  dig,  test,  drill  and 
explore  for  said  coal,  and  to  mine,  remove  and  transport  the 
same  from  this  and  other  lands  with  the  full  privileges  which 
are  usual  and  necessary  for  mining  purposes,  without  liability 
for  damages.  In  consideration  whereof,  the  said  party  of  the 
second  part,  his  heirs  and  assigns,  agrees  to  pay,  or  cause  to 
be  paid,  to  the  said  party  of  the  first  part,  $18.00  per  acre 
for  each  and  every  acre  of  coal  contained  therein,  on  or  before 
three  months  from  date  hereof,  upon  presentation  and  delivery 
of  a  good  and  sufficient  deed,  clear  of  all  incumbrances;  pay- 
ments to  be  made  as  follows :  One-third  at  time  of  presentation 
and  delivery  of  the  deed,  one-third  in  one  year  with  interest, 
one-third  in  two  years,  with  interest  from  date  of  first  pay- 
ment with  the  privilege  of  paying  in  full  at  any  time  before 
maturity.  Deferred  payment  to  be  secured  by  bond  and  mort- 
gage on  the  coal.  It  is  further  understood  and  agreed,  by  the 
parties  hereto,  that  in  case  payment  is  not  made  as  herein- 
before stipulated,  then  this  agreement  to  be  null  and  void  and 
of  no  effect  whatever,  and  all  parties  hereto  to  be  released 
from  all  liability  herein." 

Note:  From  McHenry  v.  Mitchell,  219  Pa.  297,  68  Atl.  729.  See,  also, 
Barne*  t.  Bea,  219  Pa.  279,  68  Atl.  836. 


§  1337  LAW  OF  OPTION  CONTRACTS  682 

Sec.  1337.  OPTION  TO  PURCHASE  FIFTY-ONE  PER 
CENT  OF  GOLD  MINING  CLAIM. 

"This  option  and  memoranda  of  agreement,  this  day 
entered  into  between  C.  0.  Lagerfelt,  party  of  the  first  part, 
and  E.  W.  Morris,  party  of  the  second  part,  witnesseth :  That 
the  said  party  of  the  first  part,  for  and  in  consideration  of 
the  sum  of  one  hundred  ($100.00)  dollars,  to  him  in  hand 
paid  by  the  party  of  the  second  part,  the  receipt  whereof  is 
hereby  acknowledged,  sells  to  the  party  of  the  second  part  an 
option  of  the  purchase  by  the  party  of  the  second  part,  of 
the  party  of  the  first  part,  of  fifty-one  per  centum  interest 
in  and  to  the  following  described  gold-mining  claim,  situated 
in  Organ  mining  district,  in  Dona  Ana  County  in  the  Terri- 
tory of  New  Mexico,  said  mining  claim  being  located  and 
described  as  follows :  That  certain  lead,  lode,  or  mining  claim 
known  as  the  'Dagmar  Gold- Mining  Claim,'  situated  in  the 
Organ  mountain  mining  district.  Territory  of  New  Mexico, 
distant  about  twenty-seven  miles  from  Las  Cruces,  New 
Mexico,  and  lying  between  two  mining  claims  known  respec- 
tively as  the  Alabama  Bell  gold-mining  claim  and  the  Oro  Fino 
gold-mining  claim,  said  Dagmar  claim  being  a  parallelogram 
600  feet  wide  by  1200  feet  long,  and  more  particularly 
described  as  follows:  Beginning  at  a  monument  of  stones  at 
the  westerly  end  center  of  said  claim,  thence  three  hundred 
feet  to  a  monument  of  stones  at  the  northwest  corner  of  said 
claim,  thence  three  hundred  feet  to  a  monument  of  stones  at 
the  easterly  end  center  of  said  claim,  thence  three  hundred 
feet  to  a  monument  of  stones  at  the  southeast  corner  of  said 
claim,  thence  twelve  hundred  feet  to  a  monument  of  stones 
at  the  southwest  corner  of  said  claim,  thence  three  hundred 
feet  to  a  monument  of  stones  at  the  westerly  end  center  of 
said  claim,  the  point  of  beginning.  This  option  to  continue 
■for  30  days  from  the  date  hereof.  The  terms  of  the  purchase 
of  said  interest  in  said  mining  property,  if  above  option  is 
carried  out,  is  twelve  thousand  and  five  hundred  ($12,500.00) 
dollars,  to  be  paid  as  follows :  Six  thousand  two  hundred  and 
fifty  ($6,250.00)  dollars  to  be  paid  by  the  party  of  the  second 
part,  to  the  party  of  the  first  part,  within  thirty  days  from 
the  date  hereof,  and  the  remainder,  six  thousand  two  hundred 
and  fifty  ($6,250.00)  dollars,  to  be  paid  in  the  same  way  two 


683  APPENDIX  OF  FORMS  §  1338 

months  from  the  date  hereof.  If  the  party  of  the  second  part 
fail  to  make  the  second  payment  as  [and]  when  the  same  falls 
due,  then  this  agreement  shall  be  utterly  null  and  void,  and  the 
first  payment  of  six  thousand  two  hundred  and  fifty  dollars 
($6,250.00)  shall  remain  and  continue  the  property  of  the 
party  of  the  first  part  as  liquidated  damages  for  the  breach 
of  this  agreement,  and  not  as  a  penalty,  and  the  party  of  the 
second  part  hereby  relinquishes  all  right  to  the  same,  or  any 
part  thereof.  If  the  said  first  payment  of  six  thousand  two 
hundred  and  fifty  dollars  ($6,250.00)  shall  be  made  or  law- 
fully tendered  to  the  party  of  the  first  part  within  the  said 
thirty  days,  hereinbefore  mentioned  by  the  party  of  the  second 
part,  and  the  said  party  of  the  first  part  shall  fail  or  refuse, 
on  said  payment  or  tender,  to  assign  and  transfer  to  the  party 
of  the  second  part  said  fifty-one  per  centum  interest  in  said 
mining-claim  property,  then,  and  in  that  case,  the  party  of 
the  first  part  hereby  agrees  to  pay  to  the  party  of  the  second 
part  the  sum  of  one  hundred  dollars  ($100.00)  as  liquidated 
damages  for  the  breach  of  this  agreement,  and  not  as  a  pen- 
alty ;  and  he  hereby  waives  all  exemptions  as  to  said  liquidated 
damages,  and  the  party  of  the  second  part,  in  order  to  secure 
the  payment  of  said  six  thousand  two  hundred  and  fifty 
($6,250.00)  dollars,  hereby  gives  the  party  of  the  first  part  a 
lien  on  said  fifty-one  per  centum  interest  in  said  mining  claim 
and  property  until  said  sum  is  paid.  In  duplicate,  this  25th 
day  of  July,  1891.  (Signed)  C.  0.  Lagerfelt.  E.  W.  Morris." 
Note:  From  Morris  v.  Lagerfelt,  103  Ala.  608,  15  So.  895. 

Sec.  1338.  AGREEMENT  TO  GIVE  OPTION  ON  CAPI- 
TAL STOCK  TO  SYNDICATE  WHICH  AGREES  TO  DO 
EXPLORATION  WORK  ON  MINES. 

This  Agreement,  made  the  17th  day  of  March,  1897, 
between  the  Merchants'  &  Miners'  National  Bank,  of  Philips- 
burg,  Montana,  Joseph  H.  Harper,  and  Joseph  H.  Harper, 
assignee  of  Durfee  &  Sherman;  M.  L.  MacDonald,  Robert 
McArthur,  David  Sterrit,  and  Mrs.  P.  W.  Sherman,  of  Butte, 
Montana,  the  parties  of  the  first  part,  and  Henry  Williams, 
William  Thompson,  James  Hamilton,  W.  R.  Kenyon,  Joseph 
H.  Harper,  and  F.  W.  Sherman,  of  Butte,  Montana,  the 
parties  of  the  second  part,  witnesseth: 


§  1338  LAW  OF  OPTION  CONTRACTS  684 

That  the  said  parties  of  the  first  part,  for  and  in  considera- 
tion of  the  various  payments  to  be  made  as  hereinafter  speci- 
fied, as  well  as  of  the  mutual  covenants  and  conditions  herein 
contained,  agree  to  sell  and  convey  unto  the  said  parties  of 
the  second  part,  their  heirs  and  assigns,  three  hundred  thou- 
sand (300,000)  shares  of  the  capital  stock  of  the  Sunrise 
Mining  &  Milling  Co.,  held  by  the  said  parties  of  the  first 
part  in  the  following  portions,  to-wit : 

The  said  Merchants'  &  Miners'  National  Bank  holds  one 
hundred  and  twenty-seven  thousand  and  twenty-nine  and  % 
shares  (127,029%)  as  collateral  security  for  indebtedness  of 
said  Durfee  &  Sherman.  The  said  Joseph  H.  Harper  holds 
twenty-five  thousand  (25,000)  shares  in  his  own  right,  and 
one  hundred  and  thirty-eight  thousand,  three  hundred  and 
seventy-one  (138,371)  shares  as  assignee  of  said  Durfee  & 
Sherman.  M.  L.  MacDonald  holds  three  thousand  (3,000) 
shares,  Robert  Mc Arthur,  one  thousand,  five  hundred  (1,500) 
shares,  David  Sterrit,  three  thousand  (3,000)  shares,  and 
Mrs.  F.  W.  Sherman,  two  thousand,  one  hundred  (2,100) 
shares. 

The  said  stock  is  to  be  deposited  in  escrow  in  the  Mer- 
chants' &  Miners'  National  Bank  of  Philipsburg,  immediately 
upon  the  execution  of  this  agreement. 

The  said  second  parties  are  to  work  and  explore  the  mines 
of  the  said  Sunrise  Mining  &  Milling  Co.,  situated  at  Sunrise, 
in  Granite  County,  during  a  period  of  four  (4)  months,  wliich 
said  work  must  be  begun  on  or  before  the  first  day  of  April, 
1897,  and  must  be  prosecuted  with  diligence.  The  said  second 
parties  shall  employ  in  said  work  at  least  five  (5)  men  con- 
tinuously, but  the  said  work  shall  be  deemed  continuous  within 
the  meaning  of  this  agreement  if  the  said  second  parties  shall 
employ  the  said  five  (5)  men  or  more  during  the  twenty-five 
(25)  days  of  each  and  every  month  from  the  time  of  their 
commencing  work  under  this  agreement.  The  said  second 
parties  shall,  on  or  before  the  11th  day  of  July,  1897,  pay, 
or  cause  to  be  paid  into  the  said  Merchants'  &  Miners'  National 
Bank  the  sum  of  two  thousand  and  eighty-three  and  76/100 
dollars  ($2,083.76),  which  said  sum  shall  be  applied  in  pay- 
ment of  the  interest  due  said  bank  upon  the  indebtedness  of 
said  Durfee  &  Sherman  and  on  the  same  day  shall  pay,  or 


685  APPENDIX  OF  FORMS  §  1339 

canse  to  be  paid  to  the  said  Joseph  H.  Harper  for  himself, 
and  as  trustee  for  said  M.  L.  MacDonald,  Robert  McArthur, 
David  Sterrit,  and  Mrs.  F.  W.  Sherman,  the  further  sum  of 
three  hundred  and  thirty-four  and  73/100  dollars  ($334.73). 
The  said  parties  of  the  second  part  shall  on  or  before  Novem- 
ber 11,  1897,  pay  or  cause  to  be  paid  into  the  said  IMerchants' 
&  Miners'  National  Bank  to  the  credit  of  said  Joseph  H. 
Harper,  assignee  of  said  Durfee  &  Sherman,  the  further  sum 
of  nineteen  thousand,  three  hundred  forty-one  and  31/100 
dollars  ($19,341.31),  and  shall  also  pay  or  cause  to  be  paid 
to  the  said  Joseph  H.  Harper  for  himself,  and  as  trustee  for 
said  M.  L.  MacDonald,  Robert  McArthur,  David  Sterrit  and 
Mrs.  F.  W.  Sherman,  the  further  sum  of  two  thousand,  seven 
hundred  forty-five  and  95/100  dollars  ($2,745.95). 

But  if  the  said  parties  of  the  second  part  shall  fail  to  work 
the  said  mines  of  the  said  Sunrise  Mining  &  Milling  Company, 
as  hereinbefore  provided,  or  shall  fail  to  make  any  of  the 
payments  herein  provided  for  on  or  before  the  time  when  the 
same  shall  become  due,  then  the  parties  of  the  first  part  may, 
at  their  option,  declare  this  contract  void,  time  being  of  the 
essence  of  this  agreement  to  convey,  and  shall  thereupon  be 
entitled  to  the  immediate  possession  of  the  said  stock. 

In  Witness  Whereof,  the  said  parties  of  the  first  part 
have  hereunto  set  their  hands  the  day  and  year  in  this  instru- 
ment first  above  written. 

(Signatures  of  all  parties.) 

Note:  From  Godfrey  v.  McConnell,  151  Fed.  783. 

Sec.  1339.  OIL  AND  GAS  LEASE  WITH  OPTION  TO 
LESSEE  TO  SURRENDER  OR  TERMINATE. 

"Agreement  made  this  eighth  day  of  December,  A.  D.  1896, 
between  Catherine  Fowler  and  Jeremiah  Fowler,  her  husband, 
of  the  Township  of  North,  County  of  Harrison,  and  State  of 
Ohio,  lessor,  and  H.  A.  Snyder,  lessee,  witnesseth:  That  the 
lessor,  in  consideration  of  one  dollar,  the  receipt  of  which  is 
hereby  acknowledged,  does  hereby  demise  and  grant  unto  the 
grantee,  his  heirs  and  assigns,  all  the  oil  and  gas  in  and  under 
the  following  described  tract  of  land,  and  also  the  said  tract 
of  land  for  the  purpose  and  with  the  exclusive  right  of 
operating  thereon  for  said  oil  and  gas,  together  with  all  the 


§  1340  LAW  OF  OPTION  CONTRACTS  686 

rights  of  way,  the  right  to  lay  pipe  lines  on  and  over  and  to 
use  water  from  said  premises,  and  also  the  right  to  remove 
at  any  time  any  property  placed  thereon  by  the  lessee ;  which 
tract  of  land  is  situated  in  the  Township  of  North,  County  of 
Harrison,  and  State  of  Ohio,  and  is  bounded  and  described 
as  follows,  to-wit :  North  by  lands  of  Jeremiah  Arbaugh,  east 
by  lands  of  Widow  Arbaugh,   south   by   lands  of  William 
Donaldson,  west  by  lands  of  Canaga ;  containing  twenty  acres, 
more  or  less.    To  have  and  to  hold  the  same  unto  the  lessee, 
his  heirs  and  assigns,  for  the  term  of  two  years  from  the  date 
hereof,  and  as  long  thereafter  as  oil  or  gas  is  found  in  paying 
quantities  thereon,  not  exceeding  in  the  whole  the  term  of 
twenty-five  years  from  the  date  hereof,  yielding  and  paying 
to  the  lessor  the  one-eighth  part  of  all  the  oil  produced  and 
saved  from  the  premises,  in  tanks  or  in  pipe  lines  to  the 
lessor's  credit;  and,  should  any  well  produce  gas  in  sufficient 
quantities  to  justify  marketing,  the  lessor  shall  be  paid  at 
the  rate  of  one  hundred  and  fifty  dollars  per  year  for  each 
well  so  long  as  the  gas  therefrom  is  sold.  In  case  no  well  shall 
be  drilled  on  said  premises  within  twelve  months  from  the 
date  hereof,  this  lease  shall  become  null  and  void,  unless  the 
lessee  shall  pay  for  the  further  delay  at  the  rate  of  one  dollar 
per  acre  at  or  before  the  end  of  each  year  thereafter  until 
a  well  shall  be  drilled.    Such  payments  may  be  made  in  hand 
or  by  deposit  to  the  lessor's  credit  in  the  Scio  Bank.    It  is 
agreed  that  the  lessee  shall  have  the  right  at  any  time  to 
surrender  this  lease  to  lessor  for  cancellation,  after  which  all 
payments  or  liabilities  to  accrue  under  and  by  virtue  of  its 
terms  shall  cease  and  determine,  and  the  lease  become  abso- 
lutely null  and  void.   It  is  understood  that  all  the  terms  and 
conditions  between  the  parties  hereto  shall  extend  and  apply 
to  their  respective  heirs,  executors,  administrators  and  assigns. 
Witness  the  hands  and  seals  of  the  parties.  Catherine  Fowler. 
(Seal.)    J.  Fowler.  (Seal.)    H.  A.  Snyder.  (Seal.)" 

Note:   From  Brown  v.  Fowler,  65  Ohio  St.  507,  63  N.  E.  76. 

Sec.  1340.    LEASE  IN  FORM  HELD  MERE  OPTION. 

"Agreement  of  lease,  made  this  8th  day  of  July,  A.  D.  1905, 
between  Allen  Cortelyou,  and  Ella  A.,  his  wife,  of  Robinson, 
Ill.j  lessor,  and  W.  W.  Seybert  of  McKee's  Rocks,  Pa.,  lessee, 


687  APPENDIX  OP  FORMS  §  1340 

witnesseth:  That  the  lessor [s]  hereby  grant  unto  lessee  for  the 
term  of  three  (3)  years,  (and  so  long  thereafter  as  oil  or  gas 
is  produced  from  the  land  leased  and  royalty  and  rentals 
paid  by  lessee  therefor,)  the  exclusive  right  to  mine  for  and 
produce  petroleum  and  natural  gas  from  and  the  possession 
of  so  much  of  eighty  (80)  acres  of  land  in  Crawford  County, 
State  of  Illinois,  as  may  be  necessary  therefor,  with  the  right 
to  use  water  and  gas  (if  found)  for  the  necessary  engines, 
and  to  remove  all  machinery,  fixtures,  etc.,  placed  by  lessee 
on  the  premises,  said  land  bounded:  E.  I/2  of  N.  W.  i/4  of 
Sec.  30,  T.  7,  N.  R.  12  W.  No  well  to  be  drilled  within  three 
hundred  feet  of  the  buildings  without  lessor's  consent.  The 
lessee  to  deliver  to  lessor,  in  pipe  line,  the  one-eighth  (Ys)  of 
all  petroleum  produced  from  the  premises  and  to  pay  one 
hundred  ($100)  dollars  per  annum  for  each  gas  well  from 
which  the  gas  is  marketed,  payable  semi-annually,  from  the 
date  and  while  the  same  is  so  utilized,  and  to  pay  all  damages 
to  growing  crops.  This  lease  is  to  be  null  and  void  and  no 
longer  binding  on  either  party  if  a  well  is  not  commenced  on 
this  block  of  1000  acres  within  twelve  months  from  this  date, 
unless  the  lessee  shall  thereafter  pay  annually  to  lessor  twenty- 
five  cents  per  acre  per  year  for  each  year's  delay  in  commenc- 
ing said  well.  Each  payment  to  extend  the  time  for  completion 
for  one  year.  A  deposit  to  the  credit  of  lessor  in  Oblong  Bank, 
Oblong,  111.,  to  be  a  good  payment  of  any  money  on  this  lease. 
Party  of  the  first  part  to  have  free  gas  for  the  dwelling 
thereon  by  laying  their  own  line  and  making  connections  at 
well,  provided  there  is  a  surplus  gas,  and  at  no  time  to  use 
gas  out  of  dwelling.  The  lessee  to  have  use  of  all  casing-head 
gas  for  drilling  and  producing  purposes,  and  to  pipe  the  same 
to  any  well  drilled  by  lessee  on  these  premises.  Party  of  the 
second  part  to  protect  all  lines.  All  grants  and  covenants  to 
extend  to  the  heirs  and  assigns  of  the  parties  hereto.  Lessee 
to  bury  all  pipe  lines  below  plow  depth  when  requested. 
Witness  the  hands  and  seals  of  the  parties. 

Allen  Cortelyou,  (seal) 
Ella  A.  Cortelyou,  (seal) 
"W.  W.  Seybert.  (seal)" 

Witness :    W.  C.  Cortelyou. 

Note:   From  Cortelyou  v.  Baruslall,  236  HI.  138,  86  N.  E.  200. 


S§  1341-1343  LAW  OF  OPTION  CONTRACTS  688 

Sec.  1341.  CLAUSE  IN  MORTGAGE  ON  REAL  ES- 
TATE MATURING  DEBT,  AT  OPTION  OF  MORTGAGEE, 
FOR  FAILURE  TO  PAY  PRINCIPAL  OR  INTEREST. 

"In  case  any  principal  or  interest  as  provided  in  said  notes 
shall  become  due  and  remain  unpaid,  then  the  whole  of  the 
principal  and  interest  of  said  notes  and  all  moneys  secured 
hereby  shall  immediately  [at  the  option  of  the  mortgagee] 
become  due  and  payable,  and  this  mortgage  may  be  foreclosed 
for  the  whole  of  such  moneys. ' ' 

Note:   From  Coman  v.  Peters,  52  Wash.  574,  100  P.  1002. 

Sec.  1342.  MORTGAGE  ON  REAL  ESTATE,  OPTION 
IN  TO  MORTGAGEE  TO  MATURE  DEBT  UPON  DE- 
FAULT BY  MORTGAGOR  IN  PAYMENT  OF  PRINCI- 
PAL OR  INTEREST,  IN  CASE  OF  WASTE,  FAILURE 
TO  PAY  TAXES,  OR  TO  PROCURE  OR  RENEW  INSUR- 
ANCE, ETC. 

"  It  is  further  provided  and  agreed,  that  if  default  be  made 

in  the  payment  of  the  said  or  any  part  thereof, 

or  the  interest  thereon,  or  any  part  thereof,  at  the  time  and 
in  the  manner  and  at  the  place  above  limited  and  specified 
for  the  payment  thereof,  or  in  case  of  waste  or  non-payment 
of  taxes  or  assessments,  or  neglect  to  procure  or  renew  insur- 
ance, as  hereinafter  provided,  or  in  case  of  the  breach  of  any 
of  the  covenants  or  agreements  herein  contained,  then  and  in 
such  case,  the  whole  of  said  principal  and  interest  secured  by 
the  said in  this  mortgage  mentioned,  shall  there- 
upon, at  the  option  of  the  said  party  of  the  second  part,  its 
successors,  attorneys  or  assigns,  become  immediately  due  and 
payable,"  etc. 

Sec.  1343.  MORTGAGE  ON  REAL  ESTATE,  OPTION 
IN  NOTE  SECURED  BY,  TO  ACCELERATE  MATURITY, 
UPON  DEFAULT  IN  PAYMENT  OF  INTEREST,  TAXES, 
ETC. 

"On  the  first  day  of  December,  1913,  for  value  received,  I 
promise  to  pay  to  Guaranty  Loan  &  Investment  Company,  of 
Spokane,  Washington,  or  order,  the  principal  sum  of  fifteen 
hundred  dollars  ($1,500),  with  interest  thereon,  at  the  rate 


689  APPENDIX  OF  FORMS  §  1343 

of  eight  per  cent  per  year  from  the  date  hereof  until  maturity, 
payable  semi-annually  according  to  the  tenor  of  six  interest 
notes,  each  for  sixty  dollars  (60)  bearing  even  date  herewith; 
both  principal  and  interest  notes  payable  at  the  office  of 
Guaranty  Loan  &  Investment  Co.,  Spokane,  Wash,  (with 
exchange  on  New  York).  And  if  default  be  made  in  the  pay- 
ment of  any  of  said  notes  so  secured,  or  any  part  of  them,  aa 
the  same  mature,  for  the  space  of  thirty  days,  or  if  the  maker 
of  this  note  and  interest  notes  attached  hereto  shall  allow  the 
taxes  or  any  other  public  rates  and  assessments  on  the  mort- 
gaged property,  or  any  part  thereof  securing  the  aforesaid 
notes,  to  become  delinquent,  or  shall  do  any  act  whereby  the 
value  of  said  mortgaged  property  shall  be  impaired,  or  in 
case  any  taxes  or  assessments  shall  be  levied  against  the  holder 
of  this  note,  on  account  of  this  note,  then  upon  the  happening 
of  any  of  said  contingencies,  the  whole  amount  herein  secured 
shall  at  once  become  due  and  payable,  and  the  mortgagee,  its 
legal  representatives  or  assigns,  may  proceed  at  once  to  col- 
lect these  notes  and  foreclose  the  mortgage  given  to  secure 
the  same,  and  sell  the  mortgaged  property,  or  so  much  thereof 
as  shall  be  necessary  to  satisfy  said  debt,  interest  and  costs, 
and  all  taxes,  public  rates,  or  assessments  that  may  be  due 
thereon,  together  with  a  reasonable  attorney's  fee,  if  suit  be 
commenced  for  the  purpose  of  collecting  this  debt  or  fore- 
closing the  mortgage  securing  the  same.  It  is  expressly  agreed 
and  declared  that  these  notes  are  made  and  executed  under 
and  are  in  aU  respects  to  be  construed  by  the  laws  of  the  State 
of  Washington,  and  are  secured  by  mortgage  of  even  date 
herewith,  duly  recorded  in  Spokane  County,  of  the  State  of 
Washington.  This  note  bears  interest  at  the  rate  of  twelve 
per  cent  per  annum,  payable  yearly,  after  maturity. 

"Dated  at  Spokane,  State  of  Washington,  this  first  day  of 
December,  1910. 

J.  P.  J." 

Notb:  Prom  Bright  v.  Offield,  81  Wash,  442,  143  P.  159. 


44 — Option   Contracts. 


§§  13  i4,  1345     LAW  OF  OPTION  CONTUACTS  690 

Sec.  1344.     NOTICE  OF  ELECTION  TO  PURCHASE. 
GENERAL  FORM. 
To   A  B 


Sir:    Referring  to  that  certain  option  contract  in  writing 

dated ,  191 .  . ,  given  by  you  to  the  undersigned 

(or  given  by  you  to  E  F  and  by  him  duly  assigned  to  the 
undersigned)  and  conveying  the  following  described  prop- 
erty, to- wit: 

(Here  insert  description  of  property.) 

You  are  hereby  notified  that  the  undersigned  hereby  elects 
to  purchase  the  said  property  for  the  price  and  upon  the 
terms  and  conditions  of  the  said  option  contract  and  is  able 
and  ready  to  perform  the  said  contract  on  his  part.^ 

(If  payment  of  the  price,  or  any  part  thereof,  is  due  and 
payable,  under  the  terms  of  the  option,  at  the  time  of  election, 
it  must  be  then  tendered  in  order  to  make  a  good  election ;  and 
so  of  tender  of  performance  of  any  other  act  which  is  part  of 
the  election.)  C  D 

Dated  ,  191.. 

Sec.  1345.  GENERAL  FORM  OF  OPTION  TO  PUR- 
CHASE REAL  ESTATE. 

This  Agreement,  made  this day  of , 

191. .,  by  and  between  A  B,  of ,  hereinafter 

1  The  election  is  not  required  to  be  in  any  particular  form  unless  by 
virtue  of  the  provisions  of  the  option  contract.  See  Sec.  815.  As  to 
an  oral  election  being  within  the  Statute  of  Frauds,  see  Sees.  414-415. 
The  election  must  be  strictly  in  accordance  with  the  terms  of  the 
option  contract.  If  it  falls  short  of  those  terms  or  requires  from 
the  optionor  some  unauthorized  act  on  his  part,  it  is,  speaking  gen- 
erally, insufficient.  In  other  words  the  time,  place  and  mode  of 
election  are  fixed  by  the  option  contract,  or  are  implied  by  law,  and 
an  election  varying  from  the  terms  fixed  or  implied,  will  not  raise 
the  option  to  a  bilateral  contract.  See  Sec.  840. 
One  of  the  most  fruitful  sources  of  litigation  has  been  qualified  or 
conditional  election.  That  is,  an  election  made  conditional  on  the 
doing  by  the  optionor  of  some  act  not  required  by  the  terms  of  the 
option  contract,  such,  for  instance,  as  on  condition  that  an  abstract 
of  title  be  furnished  when  the  option  contains  no  such  requirement, 
and  no  such  duty  is  imposed  by  law  or  by  custom.  See  Sees. 
841  et  seq. 


g91  APPENDIX  OF  FORMS  §  ^'^^^ 

called  Optionor,  and  C  D  of  ,  hereinafter 

called  Optionee,  witnesseth:  ^ 

a    That  for  and  in  consideration  of  the  sum  of  $ • 

paid  by  the  Optionee  to  the  Optionor,  the  receipt  of  which  is 
hereby  acknowledged  by  the  Optionor,^  the  Optionor  gives  and 
grants  to  the  Optionee  and  to  his  heirs  and  assigns,^  the 
exclusive*  right  or  privilege  of  purchasing  the  following 
described  property  owned  by  the  Optionor,^  to-wit: 

(Here  insert  description.^) 

l    The  option  price  for  said  property  is  $ 7  and 

upon  election  to  purchase  shall  be  due  and  payable  by  the 
Optionee,"  to  the  Optionor,  at .as  follows, 

to-wit: 

(Here  set  forth  the  cash  or  deferred  payments,  or  both, 
and  also  description  of  the  security  to  be  given,  if  any  and 
the  rate  of  interest,  if  any,  on  deferred  payments,  and  the 
time  when  the  interest  is  payable.^) 

c  Notice  of  election  to  purchase  hereunder  by  the  Optionee 
or  his  assigns,  shaU  be  in  writing^o  and  shall  be  given  to  the 
Optionor  at 

1  A  nominal  money  consideration  is  sufficient.    See  Sees.  325-330. 

2  Effect  of  recital  of  consideration,  see  See.  331. 

S  Words  of  assignment  may  not  be  necessary  in  a  particular  jurisdiction, 
but  they  are  given  in  this  general  form  in  order  to  cover,  so  far  as 
possible,  aU  cases-    See  Sees.  601-610. 
4  It  is  not  necessary  to  use  the  word  exclusive.     It  is  here  used  as  a 
matter  of  custom.    An  option  privilege  is  necessarily  exclusive.    See 
Sec.  201  n.  1. 
6  A  person  may  legally  give  an  option  on  property  of  which  he  is  not 
then  the  owner.     See  Sec.  215  n.  11.     However,  it  is  just  as  well  to 
have  a  provision  that  will  bring  out  the  title  of  the  optionor. 
6  The  necessity  for  an  accurate  description  of  the  property  is  pointed 

out  in  Sec.  214. 
7  8  9  It  is  an  inflexible  rule  that  the  terms  of  the  option  contract  must 
'    '  be  definite,  certain  and  complete.    See  Sees.  209-213. 
10  11  Notice  of  election,  it  is  held,  may  be  oral.    See  Sees.  414,  415,  816. 
'    In  the  absence  of  an  express  provision,  the  law  fixes  the  place  ot 
election.    But  express  provisions  on  these  points  will,  in  the  long  run, 
prove  trouble  savers. 


§  1345  LAW  OF  OPTION  CONTRACTS  G92 

'd.  Upon  notice  of   election  to  purchase   being  given   the 

Optionor  shall,  within days  thereafter,  furnish,  at  his 

own  cost  and  expense  and  deliver  to  the  Optionee  at , 

an  unlimited  certificate  of  title,^^  made  by  the 

Abstract  and  Title  Company  of The  Optionee 

shall  have days  from  and  after  the  delivery  of  said  cer- 
tificate of  title  within  which  to  examine  the  same.  If  the  title 
to  said  property,  as  shown  by  the  said  certificate  of  titk  is 
well  vested  in  the  Optionor  and  is  free  and  clear  of  and  from 
all  defects,  liens,  encumbrances,  taxes  and  assessments,  except 


then  the  Optionee  shall,  within  the  time  aforesaid,  perform 
the  provisions  of  paragraph  6  of  this  option,  and  if  the  said 
title  shall  be  otherwise  than  as  above  stated,  then  this  option 
shall  be  at  an  end  and  the  Optionor  shall  pay  to  the  Optionee 
on  demand,  all  moneys  theretofore  paid  by  the  Optionee  on 
account  of  the  said  price,  provided,  however,  that  the  Optionor 
shall  have  ....  days  from  and  after  notice  to  him,  in  writing, 
by  the  Optionee  at  the  place  aforesaid,  of  any  legal  ground 
for  rejecting  said  title,  within  which  to  cure  any  defect  in 
said  title,  or  to  remove  the  said  ground  of  rejection. 

e.  Upon  performance  by  the  Optionee  hereunder  the 
Optionor  shall  execute  and  deliver  to  the  Optionee  his  deed 
of  conveyance  in  form  of ^^ 

/.  Possession  of  said  property  shall  be  delivered  to  the 
Optionee  and  he  shall  be  entitled  to  the  same  on  execution 
and  delivery  of  deed  of  conveyance  as  aforesaid.^* 

12  This  clause  is  suggestive  merely.  It  may  be  framed  to  suit  loeal  con- 
ditions, but  as  a  general  rule  the  law  does  not  require  the  optionor 
to  furnish  an  abstract  or  certificate  of  title,  except  hj  virtue  of  an 
express  provision  in  the  option  contract.    See  Sec.  1008. 

18  This  clause  is  suggestive  only.  In  some  jurisdictions  a  warranty  deed, 
and  in  others,  a  grant  deed,  is  customary. 

14  An  optionee  is  not  entitled  to  the  possession  of  the  property  until  he 
is  entitled  to  a  deed  of  conveyance.  See  Sec.  513.  A  clause  on  pos- 
session is  necessary  only  when  it  is  desired  to  change  the  rule. 


393  APPENDIX  OF  FORMS  §§  1346, 1347 

g.  All  taxes  or  assessments  levied  or  assessed  upon  the  said 
property  after  notice  of  election  hereunder,  shall  be  paid  by 

the  Optionee.^^ 

Witness  the  hands  of  the  said  parties,  in  duplicate,  the  day 
and  year  first  above  written.  -^  ^ 

(Acknowledged  and  certified  if  desired.) 

Sec.  1346.     INFORMAL  OPTION  ON  LAND. 

"TuscuMBiA,  Ala.,  October  21,  1886. 
"For  and  in  consideration  of  the  sum  of  one  dollar  in  hand 
paid,  I  hereby  give  A.  J.  Moses  an  option  on  my  lands  and 
improvements  situated  near  Sheffield,  and  known  as  my  home 
place,  containing  120  acres,  more  or  less,  for  the  sum  of  eight 
thousand  dollars,  to  be  paid,  say  $3,000  cash,  and  balance  m 
1  and  2  years,  with  interest  from  date  of  possession.  IMoney 
to  be  paid  when  titles  are  approved.   This  option  good  for  2 

days.  _ 

(Signed)    "J.  W.  McClain." 

Notb:     From  Moses  v.  McClain,  82  Ala.  370,  2  So.  741. 

Sec.  1347.     OFFER   TO    SELL   LAND   IN   FORM   OF 
LETTER. 

"Cincinnati,  0.,  Oct.,  1902.  Mr.  J.  E.  North,  Bond,  Miss.— 
Dear  Sir  -.  We  will  withdraw  our  Mississippi  tract  in  Harri- 
son and  Pearl  River  counties  from  the  market  until  January 
1st,  1904,  during  which  time  you  may  send  your  men  to  look 
it  over,  and  if,  at  the  expiration  of  the  time  or  February  1st, 
1904,  you  decide  to  take  this  land,  we  will  sell  you  eight-ninths 
and  give  you  warranty  deed  on  the  same  at  the  rate  of  $20 
per  acre,  and  in  the  meantime  we  will  try  to  get  the  consent 
of  the  parties  owning  the  other  one-ninth  at  the  same  price, 
but  will  not  guarantee  their  consent.  Yours  truly,  Comstock 
Bros." 

Note:     From  Comstock  Bros.  v.  North,  88  Miss.  754,  41  So.  374. 

IB  This  clause,  also,  is  suggestive;  it  is  not  necessary,  but  a  provision 
covering  taxes  and  assessments  may  avoid  dispute. 


§  1348  LAW  OF  OPTION  CONTRACTS  694 

Sec.  1348.     OPTION    TO    PURCHASE    LAND    WITH 
SPECIAL  STIPULATION  AS  TO  BREACH. 

"Option  contract,  between  Sol.  Mier  Co.,  of  Ligonier,  Ind., 
party  of  the  first  part,  and  Samuel  B.  Hadden  and  Matilda 
A.  Hadden,  his  wife,  of  Ontwa  Township,  Cass  County,  Mich., 
of  the  second  part,  to-wit:  In  consideration  of  one  dollar 
($1.00)  paid  by  party  of  the  first  part  to  party  of  the  second 
part,  the  receipt  of  which  is  hereby  acknowledged  and  in 
consideration  of  the  agreements  hereinafter  set  out,  said 
second  party  hereby  sells  to  said  first  party  for  the  sum  of 
eighty-three  hundred  dollars  ($8300.00)  to  be  paid  to  said 
second  party  as  follows:  Cash  upon  possession  of  land  (less 
amount  of  liens  and  encumbrances  on  the  real  estate)  upon 
execution  to  said  first  party  of  a  warranty  deed  therefor,  the 
following  real  estate  in  Cass  County,  State  of  Michigan,  viz. : 
Fifty-seven  (57)  acres  off  the  east  side  of  the  northwest 
quarter  (1/4)  of  section  seven  (7)  south  of  highway  and  thirty- 
three  (33)  acres  off  the  west  side  of  the  northeast  quarter  (^4) 
south  of  highway  in  section  seven  (7)  all  in  township  eight 
(8)  south  of  range  fifteen  (15)  west  containing  ninety  (90) 
acres  more  or  less  to  be  more  accurate,  described  in  deed. 
Party  of  the  second  part  agrees  to  furnish  abstract  showing 
perfect  title  to  said  real  estate,  which  title  must  be  made  sat- 
isfactory to  said  first  party's  attorney,  and  second  party 
agrees  to  convey  said  real  estate  to  party  of  the  first  part  by 
deed  of  general  warranty.  First  party  may  demand  the  exe- 
cution of  said  deed  at  any  time  within  November  1,  1906,  from 
the  date  hereof ;  and  if  second  party  fails  or  refuses  to  execute 
the  same  or  fails  or  refuses  to  perform  the  stipulations  hereof 
on  his  part,  then  first  party  may  by  suit  enforce  the  specific 
performance  by  second  party  of  this  contract,  and  the  execu- 
tion of  a  deed  for  said  real  estate,  or  may,  at  his  option,  by 
suit,  recover  from  said  second  party,  with  interest  and  attor- 
ney's fees  and  without  relief,  whatever  damage  he  may  have 
suffered  by  reason  of  any  default  on  the  part  of  said  second 
party.  First  party  may  refuse  to  purchase  said  real  estate, 
and,  if  he  does  so,  shall  forfeit  and  pay  to  second  party  with 
interest  and  attorney 's  fees  and  without  relief,  the  sum  of  one 


695  APPENDIX  OF  FORMS  §  1349 

dollar  ($1.00)  which  shall  constitute  the  only  liability  of  first 
party  for  such  refusal.  This  contract  to  be  void  unless  the 
first  party  offers  performance  thereof  on  his  part  within  said 
period  of  November  1,  1906.  Deed  to  be  made  and  delivered 
at  the  office  of  Sol.  Mier  Co.,  at  South  Bend,  Ind.  It  is  further 
agreed  that  the  party  of  the  second  part  reserve  the  tenant's 
interest  [in]  the  one-half  (I/2)  of  the  wheat  sown  in  the  fall  of 
1906.  Possession  to  be  given  March  1,  1907.  Executed  in 
duplicate  this  21st  day  of  June,  1906.  Sol.  Mier  Co.,  by  Leon 
Rose.  (Seal.)  Samuel  B.  Hadden.  (Seal.)  Matilda  A. 
Hadden.     (Seal.)" 

Note:     From  Solomon  Mier  Co.  v.  Hadden,  148  Mich.  488,  111  N.  W. 
1040,  118  A.  S.  R.  586,  12  Ann.  Cas.  88. 

Sec.  1349.  OPTION  ON  LANDS.  GENERAL  DESCRIP- 
TION OF  LAND. 

"This  agreement,  entered  into  this  4th  day  of  July,  1903, 
by  and  between  Moreland  &  Pugh,  of  Hayward,  Wis.,  parties 
of  the  first  part,  and  Geo.  L.  Arentsen,  of  Hayward,  Wis., 
party  of  the  second  part,  witnesseth :  The  party  of  the  first 
part  agrees  to  give  the  party  of  the  second  part  an  option  of 
ninety  days  (90)  on  all  the  lands  they  now  control,  belonging 
to  the  North  Wisconsin  Lbr,  Co.,  excepting  the  west  y2  of  the 
N.  W.  l^  Sec.  24,  all  the  above  lands  situated  in  town  43, 
R.  (8)  west,  Bayfield  county,  Wisconsin,  about  (8500)  acres. 
Consideration  of  the  above  option  is  to  be  three  hundred  dol- 
lars ($300). 

One  hundred   ($100)  in  hand  paid. 

One  hundred   ($100)   in  thirty  (30)  days  from  date. 

One  hundred  ($100)   in  sixty  (60)   days  from  date. 

The  purchase  price  of  the  above  lands  is  to  be  three  dollars 
(3.00)  per  acre. 

Moreland  &  Pugh,  (seal) 
Geo.  M.  Arentsen.  (seal) 
Witnesses :  F.  L.  Clark, 

C.  P.  Hendrickson." 

Note:     From  Arentsen  v.  Moreland,  122  Wis.  167,  99  N.  W.  790,  106 
A.  S.  R.  951,  65  L.  R.  A.  973,  2  Ann.  Cas.  628. 


§  1350  LAW  OF  OPTION  CONTRACTS  696 

Sec.  1350.  OPTION  ON  FARM  AND  ALL  PROPERTY 
THEREON  EXCEPT  LIVESTOCK. 

St.  Louis,  January  17th,  1906. 

"This  agreement  made  this  17th  day  of  January,  1906, 
between  Louis  Spelbrink  of  the  city  of  St.  Louis,  and  state  of 
Missouri,  party  of  the  first  part,  and  Aiple  &  Hemmelmann 
Real  Estate  Company,  agent,  of  the  same  place,  party  of  the 
second  part,  witnesseth:  and  whereas,  the  party  of  the  first 
part,  for  and  in  consideration  of  the  sum  of  fifty  ($50.00) 
dollars,  in  hand  paid  by  the  party  of  the  second  part,  the 
receipt  of  which  is  hereby  acknowledged,  does  hereby  give  and 
grant  to  the  party  of  the  second  part,  the  option,  privilege, 
and  right  of  purchase  for  forty-five  (45)  days  from  this  date, 
situated  in  the  county  of  St.  Louis,  Missouri,  to  wit :  Ninety 
(90)  and  9/100  acres  on  the  west  side  of  Denny  road,  running 
to  Spoede  road,  and  bounded  south  by  property  of  Schneider 
and  West  End  Park,  and  including  everything  on  the  prem- 
ises, excepting  livestock,  for  the  sum  of  twenty  thousand 
($20,000.00)  dollars,  payable  in  terms  of  one-third  cash  and 
the  balance  in  three  years  at  5  per  cent.  Party  of  the  first 
part  hereby  agrees  and  guarantees  to  deliver  to  party  of  second 
part,  on  payment  of  said  purchase  money,  a  warranty  deed 
to  said  real  estate,  and  that  title  to  said  land  shall  be  perfect 
and  free  from  all  incumbrances,  liens  or  adverse  titles.  Should 
the  party  of  the  second  part,  within  said  period  of  forty-five 
(45)  days,  accept  the  proposition  of  the  first  party  to  sell  said 
real  estate,  and  agree  to  take  the  same  at  the  price  and  on  the 
terms  aforesaid,  and  tender  to  the  party  of  the  first  part  the 
said  sum  of  twenty  thousand  ($20,000.00)  dollars,  then  the 
party  of  the  first  part  hereby  binds  himself  to  execute  to  said 
party  of  the  second  part  a  good  and  sufficient  deed  of  convey- 
ance, as  above,  for  said  real  estate.  In  testimony,  we,  the 
parties  hereto,  have  hereunto  set  our  hands  and  seals  in  tripli- 
cate this  17th  day  of  January,  1906. 

(Signed)  Louis  Spelbrink.  (seal)" 

"I  agree  to  pay  Aiple  &  Hemmelmann  R.  E.  Co.  a  commis- 
sion of  five  per  cent  (5  per  cent)  on  consummation  of  above 
sale.  (Signed)  Louis  Spelbrink.  (seal)" 

NOTB:     From  Aiple  &  Hemmelmann  Eeal  Estate  Co.  v.  Spelbrink,  211 
Mo.  671,  111  S.  W.  480,  14  Ann.  Cas.  652. 


697  APPENDIX  OF  FORMS         §§  1351,  1352 

Sec.  1351.  OPTION  TO  PURCHASE  LAND  WITH 
CLAUSE  GIVING  RIGHT  TO  HAVE  DEED  MADE 
DIRECT  TO  PURCHASER  FROM  OPTIONEE,  AND 
PROVIDING  FOR  MORTGAGE  TO  SECURE  DEFERRED 
PAYMENT  OF  PRICE  EVIDENCED  BY  NOTES. 

"For  and  in  consideration  of  one  hundred  seventeen  dollars 
in  hand  paid,  and  other  good  and  valuable  considerations  ren- 
dered by  E.  J.  Breen  of  Fort  Dodge,  Iowa,  the  receipt  of 
which  is  hereby  acknowledged,  I,  L.  A.  Mayne,  of  Cerro  Gordo 
county,  state  of  Iowa,  agree  to  sell  to  said  E.  J.  Breen,  at  his 
option,  at  any  time  on  or  before  October  17th,  1906,  the  fol- 
lowing described  premises  situated  in  the  county  of  Cerro 
Gordo  and  state  of  Iowa  (here  follows  a  description  of  the 
property),  containing  117  20/100  acres  at  the  agreed  price  of 
one  hundred  and  fifty  dollars  per  acre  and  upon  the  terms  as 
follows :  Seventeen  thousand  five  hundred  and  fifty  dollars  on 
delivery  of  deed.  All  of  the  deferred  payments  to  draw  inter- 
est at  the  rate  of per  cent  from  the  date  of  deed, 

payable  annually.  And  said  L.  A.  Mayne  expressly  agrees  that 
in  case  that  E.  J.  Breen  sells  said  herein  above  described  land 
at  any  time  within  the  term  of  his  contract,  that  he  will  at  the 
request  of  said  E.  J.  Breen,  execute  and  deliver  to  the  pur- 
chaser, that  may  be  named  by  said  E.  J.  Breen,  a  good  and 
sufficient  warranty  deed,  with  full  covenants,  conveying  and 
assuring  the  fee  simple  of  said  premises,  together  with  an 
abstract  showing  perfect  title  in  giver  of  deed,  and  agrees  to 
accept  the  purchaser's  notes  for  the  deferred  payments,  said 
notes  being  in  amount,  and  time  of  payment  as  above  set 

forth,  and  secured  by mortgage  on  above  described 

premises.  In  witness  of  which  said  parties  have  hereunto 
caused  these  presents  in  duplicate  to  be  executed  on  this  17th 
day  of  April,  A.  D.  1906.  J,  J.  Mayne.  L.  A.  Mayne.  Witness, 
C.  H.  McNider." 

Note:     From  Breen  v.  Mayne,  141  Iowa  399,  118  N.  W.  441. 

Sec.  1352.  OPTION  ON  LAND  TAKING  FORM  OF 
DEPOSIT  OF  DEED  OF  CONVEYANCE  WITH  BANK. 

"In  consideration  of  $100  to  me  in  hand  paid  by  William 
Kissack,  trustee,  the  receipt  whereof  is  hereby  acknowledged, 


§  1353  LAW  OF  OPTION  CONTRACTS  698 

I  agree  to  sell  and  convey  to  said  William  Kissack,  trustee,  the 
remaining  seventy-nine  acres  of  land,  more  or  less,  of  the  farm 
owned  by  me  in  the  town  of  Algonquin,  in  McHenry  County, 
Illinois,  (after  deducting  the  portion  heretofore  sold  by  me  to 
said  William  Kissack,  trustee,)  for  the  sum  of  $9900,  provided 
said  William  Kissack  deposits  said  sum  of  $9900  for  said  land 
with  the  First  National  Bank  of  Elgin,  Illinois,  within  sixty 
days  after  the  date  hereof,  to  be  delivered  to  me  by  said  bank  on 
receipt  of  a  warranty  deed  from  me  to  said  William  Kissack, 
trustee,  of  said  seventy-nine  acres  of  land,  more  or  less,  free 
and  clear  of  all  encumbrances,  (except  that  said  deed  shall  be 
made  subject  to  the  interest  of  Henry  Dahn,  as  tenant  of  said 
premises,)  with  the  abstract  of  title  to  said  premises  now 
owned  by  me  brought  down  to  date ;  but  in  case  said  William 
Kissack,  trustee,  shall  fail  to  deposit  the  sum  of  $9900  with 
said  bank,  as  aforesaid,  within  sixty  days  from  this  date,  this 
instrument  is  to  be  returned  to  me  by  said  bank,  where  it  is 
to  be  deposited  and  held  in  the  meantime.  Dated  this  25th 
day  of  October,  A.  D.  1905.  William  Bourke.  (Seal.)  " 
Note:    From  Bourke  v,  Kissack,  242  HI.  233,  89  N.  E.  990. 

Sec.  1353.  DOUBLE  OPTION  TO  PURCHASE  OR  TO 
LEASE  WITH  PERMISSION  FOR  ERECTION  OF 
BUILDING. 

"Providence,  R.  I.,  March  25,  1908.  Mr.  Albert  F.  East- 
man, Providence,  R.  I. — Dear  Sir:  First.  I  offer  to  sell  you 
my  estates  designated  as  No.  116  Mathewson  Street  and  No.  43 
Clemence  Street,  in  the  City  of  Providence,  said  estates  together 
running  from  Mathewson  Street  to  Clemence  Street,  for  the 
sum  of  forty-two  thousand  dollars  ($42,000).  Second.  I  offer 
to  lease  you  the  above  estates  for  the  term  of  twenty  (20) 
years  from  April  20th,  1908,  at  the  following  rental:  For 
•  the  first  ten  years,  $1,680  per  year  and  for  the  next  succeed- 
ing ten  years,  $2,520  per  year,  said  rent  to  be  payable  quar- 
terly, provided  that  you  pay  in  addition  all  current  taxes, 
curbing  assessments,  sewer  assessments  and  assessments  of 
every  kind  which  may  be  imposed  upon  said  property  during 
the  continuance  of  the  lease,  so  that  the  above  named  rental 
shall  be  net  to  me.  Provided  further,  that  you  shall  erect 
within  one  year  after  the  execution  of  the  lease,  a  substantial 


699  APPENDIX  OF  FORMS  §  1353 

building,  which  shall  cost  not  less  than  ten  thousand  dollars 
($10,000),  which  shall  have  proper  foundation  and  which  shall 
be  erected  in  accordance  with  the  building  laws  of  the  City 
of  Providence.  And  provided  further  that  you  shall  give  a 
bond  with  sureties  satisfactory  to  me,  that  such  building  will 
be  erected  as  above  stated.  And  said  building  and  any 
improvements  made  by  you  upon  these  estates  shall  become 
the  property  of  myself,  my  heirs  and  assigns,  upon  the  termi- 
nation of  the  lease,  unless  you  elect  to  purchase  the  estates 
as  hereinafter  provided.  In  case  you  take  the  lease  of  said 
estates,  you  are  to  have  the  privilege  at  any  time  during  the 
first  two  years  of  the  same  to  purchase  the  property  for  the 
sum  of  forty-five  thousand  dollars  ($45,000)  ;  during  the 
succeeding  five  years  for  the  sum  of  forty-seven  thousand  five 
hundred  dollars  ($47,500)  ;  and  during  the  succeeding  three 
years  for  the  sum  of  fifty  thousand  dollars  ($50,000).  Pro- 
vided, that  at  any  of  the  above  times  at  which  you  may  elect 
to  purchase  the  same,  you  shall  give  one  month's  notice  in 
writing  to  me ;  and  provided,  further,  that  all  taxes  and  assess- 
ments which  are  imposed  or  ordered  to  be  imposed  prior  to  the 
transfer  of  the  title  shall  be  paid  by  you.  The  above  offers  of 
sale  and  of  lease  are  expressly  subject  to  the  condition  that 
the  gangway  at  the  southerly  boundary  of  said  property, 
between  Mathewson  and  Clemence  streets,  shall  remain  open 
as  provided  in  the  deeds  to  me,  and  also  subject  to  the  con- 
ditions and  agreements  as  to  party  walls  contained  in  the 
agreement  between  William  H.  Hall  and  Herbert  D.  Goff, 
trustees  of  the  Central  Real  Estate  Company,  and  myself, 
which  agreement  is  duly  recorded  in  the  land  records  of  the 
City  of  Providence;  and,  if  you  elect  to  take  a  lease  of  said 
premises,  any  payment  or  money  or  any  other  obligations 
resting  upon  me  by  the  terms  of  said  party  wall  agreement 
shall  be  assumed  by  you  during  the  term  of  said  lease.  You 
further  understand  that  the  premises  are  now  rented  to  ten- 
ants who  hold  from  month  to  month  and  that  it  would  be 
necessary  to  give  sixteen  days'  notice  in  writing  prior  to  the 
first  of  any  month  in  order  to  have  said  premises  vacated  by 
the  tenants.  R^nts  from  present  tenants  shall  be  apportioned 
if  the  deed  or  lease  running  to  you  is  signed  other  than  at  the 
first  of  the  month.   This  offer  for  you  to  purchase  or  lease  the 


§  1354  LAW  OF  OPTION  CONTRACTS  700 

above  described  premises  shall  remain  open  for  twenty-five 
(25)  days  from  this  date.  Yours  very  truly,  (Signed)  David 
F.  Sherwood." 

Note:  From  Eastman  v.  Dunn,  34  E.  I.  416,  83  Atl.  1057. 

Sec.  1354.  AGREEMENT  TO  PURCHASE  FRUIT  ON 
TREES,  WITH  OPTION  TO  PURCHASE  THE  LAND, 
IMPROVEMENTS  THEREON  AND  WATER  RIGHTS, 
PART  OF  PRICE  DEFERRED  AND  SECURED  BY 
MORTGAGE. 

"Memorandum  of  agreement  made  and  entered  into  this 
fifth  day  of  June,  1906,  between  Jesse  Andrew  Brown,  of 
Tehama  County,  State  of  California,  the  party  of  the  first 
part,  and  D.  J.  Canty,  of  Alameda  County,  State  of  California, 
the  party  of  the  second  part;  Witnesseth:  The  party  of  the 
first  part,  for  and  in  consideration  of  the  sum  of  four  thou- 
sand dollars  (4,000),  does  hereby  grant  and  sell  to  the  party 
of  the  second  part  all  fruit  on  trees  now  standing  in  orchard 
of  said  first  party  situate  on  Thomas  Creek,  in  the  County  of 
Tehama,  State  of  California,  and  known  as  the  'Westlake 
Place,'  and  more  particularly  described  as  follows,  to- wit: 

(Here  follows  description.) 

' '  The  party  of  the  second  part  shall  have  the  free  use  of  all 
trays,  lug-boxes,  cars  and  other  equipment  that  [are]  now  on 
said  place,  and  which  [are]  necessary  for  the  proper  harvesting 
of  said  fruit.  The  party  of  the  first  part  agrees  to  furnish,  free 
of  charge,  one  span  of  mules  and  harness  and  wagon  during 
the  harvest  season.  The  party  of  the  second  part  agrees  to 
make  payment  of  said  $4,000  as  follows :  $1,000  paid  this  5th 
day  of  June,  1906,  the  receipt  of  which  is  hereby  acknowledged 
by  the  party  of  the  first  part,  the  balance,  $3,000  to  be  paid 
as  said  fruit  is  sold.  All  fruit  on  said  orchard  to  belong  to 
and  be  the  property  of  the  party  of  the  first  part  until  said 
rental  of  $4,000  is  paid  in  full.  In  consideration  of  the  party 
of  the  second  part  complying  with  the  terms  of  this  agree- 
ment, the  party  of  the  first  part  does  hereby  grant  unto  the 
party  of  the  second  part  an  option  to  purchase,  during  a 
term  of  six  months  from  the  date  of  this  agreement,  all  of 
the  lands  hereinbefore  described,  with  all  permanent  improve- 
ments now  standing  on  said  lands,  and  a  one-half  interest  in 


701  APPENDIX  OF  FORMS  §  1355 

all  water  rights  used  in  connection  with  said  orchard  and 
other  lands,  and  recorded  by  said  party  of  the  first  part  as 
3,000  miner's  inches;  the  purchase  price  of  said  land  to  be 
eight  thousand  five  hundred  dollars  ($8,500),  to  be  paid  by 
the  party  of  the  second  part  to  the  party  of  the  first  part  in 
sums  as  follows:  $3,500  to  be  paid  on  delivery  of  good  and 
sufficient  deed  to  above  premises ;  the  balance,  $5,000,  to  be 
secured  by  mortgage  on  said  premises,  and  to  be  paid  in  three 
equal  payments,  in  one,  two  and  three  years,  from  date  of 
deed,  with  interest  at  7  per  cent.  In  the  event  of  the  party 
of  the  second  part  making  payments  as  above,  the  party  of 
the  first  part  agrees  to  deliver  to  the  party  of  the  second  part 
the  above  described  orchard  and  enough  farming  land  adjoin- 
ing on  the  east  side  of  said  orchard  to  make  up  120  acres.  It 
is  mutually  agreed  that  this  agreement,  and  every  part  and 
portion  thereof  will  bind  and  inure  to  the  benefit  of  the  heirs, 
administrators  and  assigns  of  the  respective  parties  to  this 
agreement.  In  witness  whereof,  the  parties  to  this  agreement 
have  hereunto  set  their  hands  and  seals  in  duplicate  the  day 
and  year  first  above  written.  Jesse  Andrew  Brown.  (Seal.) 
D.  J.  Canty.  (Seal.)" 

Note:     From  Canty  v.  Brown,  11  Cal.  App.  487,  105  P.  428. 

Sec.  1355.  AGREEMENT  BY  A  TO  REPURCHASE 
LAND  CONVEYED  BY  HIM  TO  B  IN  CONSIDERATION 
FOR  OR  IN  PAYMENT  OF  SHARES  OF  CAPITAL 
STOCK  SOLD  BY  B  TO  A,  THE  REPURCHASE  BEING 
AT  THE  OPTION  OF  B,  WITH  PROVISION  AGAINST 
ASSIGNMENT  BY  B. 

"Des  Moines,  Iowa,  Feb.  15th,  1895.  Mr.  D.  K.  McFarland, 
Des  Moines,  Iowa — Dear  Sir:  In  consideration  of  the  trade 
made  between  us  today,  in  which  you  turn  over  to  me  your 
stock  and  all  your  interests  in  the  Des  Moines  Fence  Co.,  of 
Des  Moines,  Iowa,  for  a  deed  to  lots  numbers  147,  148,  149, 150, 
151,  152,  in  East  Capital  Park  Addition  to  the  City  of  Des 
Moines,  Iowa,  which  I  am  to  have  executed  to  you,  I  hereby 
agree  that,  in  case  you  fail  to  dispose  of  said  lots  on  or  before 
August  15th,  1896,  that  I  will  on  that  date  pay  to  you,  or 
cause  to  be  paid  to  you,  $1,800.00  (eighteen  hundred  dollars) 
for  said  lots,  less  the  amount  of  incumbrance  that  may  be 


§  1356  LAW  OF  OPTION  CONTRACTS  702 

against  them  on  that  date ;  provided,  you  notify  me  that  you 
desire  me  so  to  do  ninety  (90)  days  prior  to  August  15th, 
1896;  otherwise,  this  instrument  to  be  null  and  void.  I  fur- 
ther agree  that  between  this  date  and  August  15th,  1896,  you 
may  sell  and  convey  any  part  of  above-described  lots,  giving 
me  credit  with  the  full  amount  of  sale;  but  no  lot  shall  be 
sold  and  credited  to  me  at  less  than  $300.00  per  lot.  This 
instrument  not  transferable.  "Witness  my  hand,  tliis  15th  day 
of  February,  1895.    (Signed)  H.  McCormick." 

Note:     From  McFarland  v.  McCormick,  114  Iowa  368,  86  N.  W.  369. 

Sec.  1356.  OPTION  TO  PURCHASE  AND  AGENCY 
TO  SELL  ON  COMMISSION,  THE  OPTIONOR  BINDING 
HIMSELF  TO  CONVEY  IN  PENAL  SUM,  WITH  PRO- 
VISION THAT  IF  OPTIONOR  FAILS  TO  NOTIFY 
OPTIONEE,  THE  OPTION  SHALL  BE  RENEWED  FOR 
ONE  YEAR. 

"This  indenture,  made  and  entered  into  this  20th  day  of 
January,  A.  D.  1902 : 

"Witnesseth,  That  I,  G.  R.  Carter,  of  Chicago,  County  of 
Cook,  State  of  Illinois,  in  consideration  of  one  dollar  to  me 
in  hand  paid  by  M.  G.  Love,  of  Tampico,  County  of  White- 
side and  State  of  Illinois,  do  grant  to  him,  M.  G.  Love,  the 
sole  option  to  purchase  the  following  described  piece,  parcel 
or  lots  of  land  of  which  I  am  the  owner,  namely,  one 
hundred  and  twenty  acres  of  land  one  mile  southwest  of 
Tampico,  111.,  now  occupied  by  John  Nelson,  $1,000  to  be  paid 
March  15,  1902,  $8,240  to  be  paid  March  15,  1903,  if  pur- 
chased by  M.  G.  Love  or  sold  by  M.  G.  Love  to  another  party. 
Now,  if  the  said  M.  G.  Love  shall  at  any  time  before  the 
expiration  of  this  option  so  desire,  I  agree,  in  consideration 
of  the  sum  of  $9,240,  to  convey  to  said  M.  G.  Love,  or  as  he 
shall  direct,  the  above-described  premises  by  clear  warranty 
deed  and  good  abstract  of  title.  The  above  described  property 
is  not  encumbered.  For  the  faithful  performance  of  the  above 
agreement  I  bind  myself  in  the  penal  sum  of  $500,  to  be  paid 
said  M.  G.  Love  if  I  fail  to  fulfill  this  agreement.  I  agree 
that  if  said  M.  G.  Love  be  the  cause  of  any  person  or  persons 
purchasing  the  said  above-described  property,  that  he  shall 
be  and  is  entitled  to  a  commission  of  all  over  $77  per  acre  on 


703  APPENDIX  OF  FORMS  §  1357 

farm.  I  also  agree  that  if,  before  the  expiration  of  this  option, 
I  fail  to  notify  said  M.  G.  Love  to  the  contrary,  this  option 
shall  be  considered  renewed  on  same  terms  per  purchase  for 
one  year,  hereby  binding  myself,  my  heirs,  my  administrators 
or  assigns  for  the  fulfillment  of  this  agreement  at  any  time 
during  the  period  of  fifty-three  days  after  date  first  above 
written. 

"I  have  hereunto  set  my  hand.    G.  R.  Carter.  (Seal.)" 
Note:     From  Carter  v.  Love,  206  HI.  310,  69  N.  E.  85. 

Sec.  1357.  AGREEMENT  COMBINING  OPTION  TO 
PURCHASE  AND  AGENCY  TO  SELL  ON  COMMISSION. 

"This  agreement,  entered  into  by  and  between  Catherine 
Tolbert  &  Dorr  McGloeklin  of  Vassar,  as  party  of  the  first 
part,  and  Wm.  Axe  &  Son,  as  party  of  the  second  part,  wit- 
nesseth,  that  for  a  valuable  consideration,  the  receipt  of  which 
is  hereby  acknowledged,  said  party  of  the  first  part  has  this 
day  optioned  unto  said  party  of  the  second  part  the  following 
real  estate  in  Tuscola  County,  Mich.,  to-wit:  304  acres  more 
or  less  all  in  section  11,  town  11  north,  range  7  east. 

"Said  party  of  the  second  part  shall  have  the  right  to  give 
option  of  sale  to  purchaser  and  to  close  the  option  hereby 
created  at  any  time  within  twelve  months  from  the  date  hereof, 
or  a  continuation  of  90  days,  if  at  the  expiration  of  this  agree- 
ment there  is  a  deal  pending,  and  said  party  of  the  first  part 
hereby  agrees  that  he  will  at  any  time  before  the  expiration 
of  said  option,  execute  and  deliver  to  said  party  of  the  second 
part,  a  good  and  sufficient  warranty  deed  to  said  real  estate, 
free  from  all  liens  and  incumbrances,  and  to  furnish  said  party 
of  the  second  part  an  abstract  of  title  showing  perfect  title. 

"It  is  hereby  agreed  by  the  parties  hereto  that  upon  such 
demand  being  made  and  said  deed  executed  and  delivered  as 
aforesaid  that  said  party  of  the  second  part  is  to  pay  to  said 
party  of  the  first  part  the  sum  of  $30,000,  which  sum  the 
party  of  the  first  part  agrees  to  accept  as  full  payment  of  the 
purchase  price  for  said  real  estate. 

"It  is  further  agreed  by  the  parties  hereto  that  the  above 
amount  shall  be  paid  as  follows :  $15,000  cash  on  date  of 
purchase  (less  a  commission  of  5%  of  the  total  purchase  price 
above,  to  be  paid  to  the  party  of  the  second  part  as  their  fee 


I  1358  LAW  OF  OPTION  CONTRACTS  704 

out  of  the  first  payment  on  purchase  price)  $15,000,  the 
remainder  of  the  purchase  price  to  be  paid  as  follows:  To 
suit  at  6%  annual  interest. 

"Said  party  of  the  first  part  hereby  agrees  not  to  sell,  or 
in  any  way  to  incumber  said  real  estate  during  the  term  of 
the  option  hereby  created,  and  that  should  he  do  so  he  will 
forfeit  and  pay  to  said  party  of  the  second  part,  as  liquidated 
damages,  the  sum  of  $750. 

"  It  is  further  understood  and  agreed  by  the  parties  hereto 
that  should  the  party  of  the  first  part  fail,  neglect  or  refuse 
to  execute  and  deliver  said  deed  when  demanded  as  aforesaid, 
that  said  party  of  the  first  part  will  forfeit  and  pay  to  the 
party  of  the  second  part,  as  liquidated  damages,  the  sum  of 
$1500. 

' '  The  failure,  neglect  or  refusal  of  said  party  of  the  second 
part  to  close  the  option  hereby  created  shall  in  no  manner 
render  him  liable  to  said  party  of  the  first  part,  and  he  shall 
not  become  indebted  thereby  in  any  amount  whatever. 

"The  present  title  to  above  described  property  is  in 
Catherine  Tolbert  &  Dorr  McGlocklin.  .  .  . 

"In  witness  whereof  said  parties  have  hereunto  set  their 
hands  and  seals  this  26th  day  of  June,  1912.  Catherine  Tol- 
bert. (l.  s.)   Dorr  McGlocklin.  (l.  s.)    P.  0.  Vassar,  Mich." 

Note  :     From  Axe  v.  Tolbert,  179  Mich.  556,  146  N.  W.  418. 

Sec.  1358.  AGREEMENT  HELD  AGENCY  TO  SELL 
AND  NOT  OPTION. 

"Agreement  made  this day  of ,  1901, 

by  and  between party  of  the  first  part,  and 

"W.  R.  Ballon  &  Co.,  party  of  the  second  part. 

' '  Witnesseth :  That  in  consideration  of dollars 

in  hand  paid,  the  receipt  of  which  is  hereby  acknowledged, 

and  the  agreement  hereinafter  mentioned,  said 

gives  to  W.  R.  Ballou  &  Co.,  the  exclusive  privilege  for 

year.  .  .  .  from  date  hereof  of  selling  his  tract  of  land  in  Whit- 
ley County,  Kentucky,  described  as  follows : 


for  the  sum  of dollars  per  acre. 


705  APPENDIX  OF  FORMS  §  1359 

"Said  W.  R.  Ballou  &  Co.,  upon  their  part,  agree  with  said 

that  they  will,  to  the  best  of  their  ability, 

endeavor  to  effect  a  sale  of  said  lands,  without  charge  or 
expense  to  said  party  of  the  first  part,  save  and  except  that 
party  of  the  first  part,  or  assigns,  shall  have  charge,  [and]  use 
his  best  endeavor  to  aid  the  said  W.  R.  Ballou  &  Co.  in  the  sale 
of  the  above-described  lands,  by  showing  all  persons  sent  to 
view  said  lands,  the  lines,  corners  and  improvements  of  same. 
Said  party  of  the  first  part  further  agrees  to  furnish  abstract 
of  title  and  make  a  deed  of  general  warranty  for  said  lands 
upon  demand  of  said  W.  R.  Ballou  &  Co.,  upon  sale  being 
made  as  aforesaid.  And  all  sales  or  other  transfers  whatso- 
ever to  be  made  by  and  through  the  said  W.  R.  Ballou  &  Co. 

"  It  is  mutually  understood  and  agreed  between  said  parties, 
that  said  party  of  the  first  part  shall  retain  possession  of 
said  lands,  and  receive  all  rents  and  profits  from  farming  or 
grazing,  arising  therefrom  until  sale  of  said  lands  as  afore- 
said. No  timber  or  mineral  to  be  sold  from  said  lands.  The 
owner,  however,  has  the  right  to  use  all  the  timber  and  min- 
erals for  his  own  use." 

Note:     Prom  Faraday  Coal  &  Coke  Co.  v.  Owens,  26  Ky.  L.  Rep.  243, 
80  S.  W.  1171. 

Sec.  1359.  OPTION  AGREEMENT  FOR  PROPERTY 
TO  BE  TAKEN  OVER  BY  PROPOSED  CORPORATION. 

Whereas, of  the  Borough  of , 

Pa.,  is  the  sole  owner  of  land  situate  in  the  Third  Ward  of 

the  Borough  of  ,  County  of  and 

State  of  Pennsylvania,  bounded  and  described  as  follows : 

And  Whereas, of  the  City  of  Philadelphia 

is  engaged  in  consolidating  the Flour  Mill  and 

others,  and  has  offered  to  purchase  the  mill,  etc., 

of  the  said  (described  property)    for  the  sum  of 

twenty-five  thousand  dollars  payable  as  hereinafter  more  par- 
ticularly set  forth,  and  the  sum  is  a  satisfactory  consideration. 

Therefore,  I  the  undersigned,  ,  in  con- 
sideration of  the  sum  of  one  dollar,  the  receipt  of  which  is 
hereby  acknowledged,  do  hereby  agree  to  prepare  a  deed 
for  the  property  above  described  transferring  the  same  to 

45 — Option  Contracts. 


§  1359  LAW  OP  OPTION  CONTRACTS  706 

,  his  heirs  or  assigns,  or  to  a  corporation 

to  be  designated  by  him,  and  accept  in  payment  thereof  the 
sum  of  six  thousand  two  hundred  and  fifty  dollars  in  cash, 
and  eighteen  thousand  seven  hundred  and  fifty  dollars  in 

six  per  cent  preferred  stock  of  the Company 

or  such  other  company  as  may  be  organized  by  said 

to  acquire  said  property,  and  in  addition  the  sum  of  eighteen 
thousand  seven  hundred  and  fifty  dollars  of  the  common  stock 
of  said  Company, 

In  addition  to  the  eighteen  thousand  seven  hundred  and 
fifty  dollars  of  preferred  and  also  of  common  stock  as  herein- 
before set  forth,  there  is  to  be  issued  the  sum  of  six  thousand 
two  hundred  and  fifty  dollars  in  six  per  cent  preferred  stock 
and  a  like  sum  in  common  stock,  which  is  to  be  transferred 
to  the  said for  the  six  thousand  two  hun- 
dred and  fifty  dollars  in  cash  as  hereinbefore  set  forth. 

The  deed  to  the  property  to  be  deposited  in  escrow  with 

the    Trust  Company  of  Philadelphia,  Pa.,  on 

or  before  the  15th  day  of  March,  19.  . .,  and  upon  delivery  by 

the  said of  the  considerations  named  above 

the  said  deed  shall  be  recorded  in  the  office  for  Recording 

Deeds  at  ,  Pa.,  and  become  the  property  of 

the  said or  Company. 

It  is  also  agreed  that  this  option  shall  become  void  in  case 

the   Flour  Mill  and  others  now  contemplated 

do  not  go  into  the  consolidation. 

It  is  also  agreed  that  the  preferred  stock  issued  by  the 

said    Milling  and   Export   Company   shall  be 

limited  to  such  an  amount  as  may  be  necessary  to  purchase 
milling  property,  and  no  preferred  stock  shall  be  issued  for 
profit  to  any  attorney,  underwriter,  promoter  or  Trust 
Company. 

It  is  hereby  further  agreed  that  said or 

said  Trust  Company  shall  pay  to  the  vendor  cash  for  the 
stock  of  grain,  flour  or  feed  on  hand  at  the  time  of  transfer 
at  cost  value,  and  in  case  the  vendor  and  vendee  can  not 
agree  upon  a  price  then  the  vendor  is  to  have  the  privilege 
of  disposing  of  said  grain,  flour  or  feed  to  any  one. 

In  case  the  said fails  to  comply  with  the 

terms  and  conditions  of  this  contract  on  or  before , 


707  APPENDIX  OF  FORMS  §  1380 

19 .  . ,  the  said  Trust  Company  is  hereby  authorized  to  return 
said  deed  to  the  vendor  and  this  contract  should  be  of  no 
further  force  or  effect. 

In  Witness  Whereof,  I  have  hereunto  set  my  hand  and 

seal  this  ....  day  of ,  A.  D.  1901. 

(seal.) 

Witness  : 


Note  :     From  Gochnauer  v.  Union  Trust  Co.,  225  Pa.  503,  74  Atl.  371. 

Sec.  1360.  OPTION  TO  PURCHASE  LAND,  THE 
PRICE  PAYABLE  IN  BONDS  OF  WAREHOUSE  COR- 
PORATION, THE  ISSUANCE  OF  WHICH  IS  TO  BE 
AUTHORIZED  BY  RAILROAD  COMMISSION. 

This  agreement,  made  this  ....  day  of ,  191 .  . , 

by  and  between  A  B,  of  the ,  hereinafter 

called  Optionor,  and  C  D,  of ,  hereinafter 

called  Optionee, 

WITNESSETH  : 

That  for  and  in  consideration  of  the  sum  of  $ paid 

by  the  Optionee,  the  receipt  of  which  is  hereby  acknowledged 
by  the  Optionor,  the  Optionor  gives  and  grants  to  the  Optionee 
and  to  his  assigns,  the  sole  and  exclusive  right,  privilege  and 
option  of  purchasing  the  following  described  real  property, 
owned  by  the   Optionor,  in  fee  simple,  and  situate  in  the 

,  County  of ,  State  of , 

described  as  follows,  to-wit: 

(Insert  description.) 

Together  with  all  the  appurtenances  thereunto  belonging 
or  in  anywise  appertaining,  including  all  rights  of  way  for 
switches  and  other  easements  and  privileges  used  in  connec- 
tion therewith  or  necessary  for  the  operation  of  the  said 
property  as  a  warehouse. 

1.  This  option  shall  continue  in  force  for  the  period  of 
....  days  from  the  date  hereof,  and  since  the  purpose  of 
securing  this  option  and  of  acquiring  said  property  is  to 
convey  and  transfer  the  same  to  the  X  Y  Warehouse  Corpora- 
tion, a  corporation,  incorporated  under  the  laws  of  the  State 

of ,  and  which  corporation  desires  to  erect  thereon 

a  public  warehouse,  authority  and  permission  to  issue  and 


§  1360  LAW  OF  OPTION  CONTRACTS  708 

sell  bonds  and  capital  stock  for  the  construction  of  which 
must  be  secured  through  proceedings  for  that  purpose  before 

the  Railroad  Commission  of  the  State  of ,  it  is 

UNDERSTOOD  AND  AGREED  that  the  Said  Optionee  or  his  assignee 
shall  have  ....  days  from  and  after  the  receipt  of  written 
notice  from  the  Secretary  of  said  Railroad  Commission  of 
the  grant  of  such  authority  or  permission  by  said  Commission 
within  which  to  exercise  the  said  option,  provided,  however, 
that  the  time  for  election  hereunder  shall  not  extend  beyond 


2.  The  price  for  said  property,  if  election  shall  be  made,  is 

the  sum  of  $ ,  but  an  election  having  been  made  and 

title  acquired  as  hereinafter  provided,  the  said  price  may  be 
paid  in  bonds  of  the  said  X  Y  Warehouse  Corporation,  to  be 
authorized  and  issued  by  said  corporation,  in  the  amount  of 

$ ,  upon  proper  proceedings  for  that  purpose,  at  the 

face  or  market  value  of  $ ,  bearing  interest  at  the 

rate  of  ....  %  per  annum,  secured  by  a  first  mortgage  or 
deed  of  trust  covering  the  said  optioned  property,  the  said 

bonds  to  be  serial  in  form  and  in  denominations  of  $ 

each,  and  the  bonds  so  to  be  delivered  shall  be  those  first 
maturing,  and  otherwise  be  in  such  form  and  contain  such 
terms  and  conditions  as  shall  be  authorized  by  said  Railroad 
Commission;  provided,  and  it  is  expressly  understood  and 
agreed  that  any  delay  caused  by  the  proceedings  aforesaid 
which  shall  be  prosecuted  with  due  diligence,  shall  extend  the 
time  of  performance  by  the  Optionee,  or  his  assignee,  and 
provided  further,  that  the  Optionee  or  his  assignee  shall,  at 
any  time,  or  in  any  stage  of  the  proceedings  have  the  right  or 

privilege  of  paying  $ cash  in  lieu  of  the  delivery  of 

the  said  bonds. 

3.  Within  ....  days  after  notice  of  election  to  purchase 
hereunder,  given  by  the  Optionee,  or  his  assignee,  which  notice 
may  be   given  by  leaving   the   same   in  a   sealed   envelope 

addressed  to  the  Optionor  at   in  the  City 

of ,  State  of ,  the  Optionor 

shall  furnish,  at  his  own  cost  and  expense,  and  deliver  to  the 

Optionee  at ,  in  the  City  of , 

an  unlimited  certificate  of  title  to  the  said  property,  made  by 
some  reputable  abstract  and  title  company  in  the  City  of 


709  APPENDIX  OP  FORMS  §  1360 

,  acceptable  to  the  Optionee,  and  the  Optionee 

or  his  assi^ee  shall  have  ....  days  after  the  receipt  of  the 
same  within  which  to  examine  the  said  certificate  and  to 
determine  for  himself  whether  or  not  the  title  is  well  vested 
and  free  and  clear,  and  whether  or  not  he  is  willing  to  accept 
the  same,  and  if  the  said  title  is  accepted,  then  the  said  bonds 
shall  be  issued  under  and  in  pursuance  of  the  authority  of 
the  said  Railroad  Commission  and  delivered  to  the  Optionor, 
or  the  said  cash  payment  made  as  hereinafter  provided,  it 
being  understood  and  agreed  that  the  title  to  be  conveyed 
hereunder  is  a  fee  simple  title  and  free  and  clear  of  and 
from  all  liens  and  encumbrances  except  taxes  for  the  current 
tax  year,  which  the  Optionor  obligates  himself  to  pay,  and 
upon  the  delivery  of  the  said  bonds  or  the  payment  of  the 
said  cash  price  as  aforesaid,  the  said  Optionor  covenants  and 
agrees  to  convey  to  the  said  Optionee  or  his  assignee,  the  said 
fee  simple  title  to  said  property,  free  and  clear  as  aforesaid, 
and  since  it  will  be  necessary  to  have  a  delivery  of  the  said  deed 
in  order  to  enable  the  Optionee  or  his  assignee,  to  execute  the 
trust  deed  securing  said  bonds  and  to  issue  and  deliver  the 
said  bonds,  the  Optionor  agrees  to  deliver  his  said  deed  in 
escrow  with  such  responsible  person  as  shall  be  designated  by 
the  Optionee,  under  instructions  to  the  effect  that  the  escrow 
holder  is  authorized  to  deliver  the  said  deed  upon  receiving 
the  said  bonds  for  the  price  of  said  property. 

4.  The  said  Optionor  shall  also  have  made  a  survey  of  the 
exterior  lines  of  the  said  optioned  property  and  furnish  a 
map  thereof  to  the  Optionee,  with  and  upon  the  delivery  of 
said  certificate  of  title.  The  Optionor  shall  also,  within  three 
months  from  the  delivery  of  said  deed  of  conveyance,  at  his 
own  cost  and  expense,  provide  or  furnish  for  the  use  of  the 
Optionee  and  as  appurtenant  to  the  said  optioned  property, 
a  right  of  way  to  extend  the  present  switch  of  the  A.  P.  Rail- 
way Company  to  and  along  the  south  side  of  said  property, 
and  to  extend,  or  cause  to  be  extended,  the  said  switch  along 
the  said  south  side  for  the  purpose  of  receiving  and  discharg- 
ing freight  from  said  property.  Said  Optionor  shall  also,  at 
his  own  cost  and  expense,  and  within  said  period  of  .... 
months,  pave,  or  cause  to  be  paved,  in  accordance  with  the 
specifications  of  the  City  of   ,  for  asphalt 


§  1361  LAW  OF  OPTION  CONTRACTS  710 

pavement,  the  respective  streets  on  the  north,  south  and  west 
sides  of  said  optioned  property. 

5.  It  Is  Further  Agreed  that  the  said  bonds  so  to  be 
delivered  as  aforesaid,  shall  be  underwritten  by  some  reputable 
person,  firm  or  corporation,  selected  by  the  Optionee,  and  that 
the  said  trust  deed  or  mortgage  securing  the  said  bond  issue, 
shall  contain  a  covenant  to  the  effect  that  the  grantor  or 
mortgagor  shall  pay  the  normal  United  States  income  tax 
required  by  law  to  be  retained  by  it  at  the  source. 

Witness  the  hands  of  the  said  parties,  the  day  and  year 
first  above  written. 

Executed  in  duplicate.  A  B 

C  D 

Sec.  1361.  OPTION  TO  PURCHASE  WITH  PROVIS- 
ION AGAINST  RECORDING  OPTION  BUT  PROVIDING 
FOR  DEPOSIT  OF  IT  WITH  THIRD  PERSON,  AND 
UPON  FAILURE  TO  GIVE  NOTICE  OF  ELECTION,  TO 
BE  SURRENDERED  FOR  CANCELLATION. 

"We,  Carl  H.  Willig  and  Antonie  Willig,  his  wife,  of  the 
City  of  Chicago,  Township  of  Jefferson,  for  and  in  considera- 
tion of  the  sum  of  one  dollar,  and  other  valuable  consideration 
to  us  in  hand  paid  by  De  La  Moine  Wickersham,  of  Chicago, 
do  hereby  give  to  the  said  De  La  Moine  Wickersham,  heirs 
and  assigns,  the  privilege  of  purchasing,  on  or  before  the 
first  day  of  January,  A.  D.  1892,  the  following  described  real 
estate,  situate  in  the  County  of  Cook  and  State  of  Illinois, 
to- wit:  A  certain  tract  of  land  in  the  southeast  fractional 
quarter  of  section  five  (5),  township  forty  (40),  range  thirteen 
(13)  east  of  the  third  P.  M.,  known  as  the  'Fritz  Willig  Land,' 
containing  thirty-one  745/1000  acres;  also  ninety  feet  front 
on  Elston  Road,  extending  back  to  the  half  section  line,  and 
containing  one  85/100  acres,  with  all  buildings  thereon,  at 
and  for  the  price  of  four  hundred  ($400)  dollars  per  acre,  to 
be  paid  as  follows,  viz:  One-fifth  at  time  of  delivering  of 
deed,  in  cash;  the  balance,  two,  three,  four,  and  five  equal 
payments,  annually,  on  or  before,  with  release  of  any  five 
acres,  upon  payment  of  the  pro  rata  amount  due  thereon,  with 
[interest  at]  six  per  cent  per  annum,  to  be  secured  by  mort- 
gage or  trust  deed  on  said  real  estate  [to]  Carl  H.  Willig,  said 


711  APPENDIX  OP  FORMS  §  1362 

cash  pajment  to  be  made  and  securities  delivered  on  or  before 
the  first  day  of  December,  A.  D.  1892,  [by]  De  La  ]\roine 
Wickersham,  or  his  assigns.  I  also  agree  to  furnish  a  good 
abstract  of  title,  showing  good  title  to  said  real  estate.  In  case 
the  privilege  of  purchase  hereby  given  is  exercised,  the  price 
above  named  paid  and  secured,  and  the  securities  accepted  as 
above  provided,  we  agree  to  convey  and  assure  the  said  real 
estate  to  said  De  La  Moine  "Wickersham,  heirs  and  assigns,  by 
good  and  sufficient  warranty  deed,  reciting  a  consideration  of 
$13,200,  free  and  clear  of  all  liens  or  incumbrances  whatso- 
ever, except  as  to  taxes  and  assessments  or  impositions  levied, 
assessed,  or  imposed  upon  said  real  estate  subsequent  to  the 
year  1892.  This  instrument  shall  not  be  recorded,  but  is 
deposited  by  the  said  parties  by  mutual  agreement  with  J.  R. 
Wickersham;  and  in  case  the  privilege  of  purchase  hereby 
given  is  not  exercised  and  the  conditions  hereof  fully  per- 
formed by  said  De  La  Moine  Wickersham,  heirs  or  assigns, 
and  written  notice  of  such  exercise  and  performance  given 
by  J.  R.  Wickersham  to  said  Carl  H.  Willig,  on  or  before  the 
first  day  of  January,  A.  D.  1892,  said  privilege  shall  there- 
upon wholly  cease,  but  no  liability  to  refund  the  money  paid 
therefor  shall  arise,  said  abstracts  of  title  to  be  returned  in 
good  order,  and  said  J.  R.  Wickersham  shall  at  once  surrender 
this  instrument  to  said  parties  for  cancellation.  During  the 
existence  of  said  privilege  of  purchase,  the  instrument  shall 
be  binding  on  their  heirs,  executors,  administrators,  and 
assigns,  who  may  exercise  the  rights  herein  reserved  by  them, 
and  receive  the  surrender  above  mentioned.  Witness  my  hand 
and  seal  this  28th  day  of  May,  A.  D.  1890.  Carl  H.  Willig. 
(Seal.)  Antonie  Willig.  De  La  Moine  Wickersham.  Witness: 
A.  S.  Wright." 

Note:     From  Crandall  v.  Willig,  166  HI.  233,  46  N.  E.  755. 

Sec.  1362.  OPTION  CLAUSE  REQUIRING  WRITTEN 
NOTICE  OF  ELECTION  AND  TENDER  OF  PRICE  ON 
DELIVERY  OF  DEED  OF  CONVEYANCE. 

"Notice  of  the  determination  of  the  second  party  to  make 
purchase  shall  be  given  in  writing  to  first  party,  on  or  before 
the  expiration  of  said  period,  as  aforesaid.  .  .  .  The  second 
party    shall  not  be  bound  to  make  any  tender  of  the  purchase 


§  1363  LAW  OF  OPTION  CONTRACTS  712 

price,  but  the  same  shall  be  paid  to  the  first  party  upon 
delivery  to  the  second  party  of  a  warranty  deed  to  said  coal 
and  other  mineral,  as  aforesaid." 

Note:      From   Consolidated  Coal  Co.  v.  Findley,   128   Iowa  696,   105 
N.  W.  206. 

Sec.  1363.  WILL  OPTION  IN  GIVING  LEGATEE 
RIGHT  TO  PURCHASE. 

"If  any  of  the  residuary  legatees  desire  to  purchase  any 
of  the  personal  property  or  real  estate  owned  by  me  they  may 
do  so  at  its  current  market  price  at  the  time  of  my  death,  as 
valued  by  my  executors  and  trustees,  the  survivors  or  survivor 
of  them,  and  the  same  shall  be  charged  against  their  respec- 
tive shares  or  interest  as  money  paid  to  them  by  the  executors 
and  trustees,  the  survivors  or  survivor  of  them  in  accordance 
with  the  provisions  of  this  will." 

Note:     From  In  re  Walbridge,  198  N.  Y.  234,  91  N.  E.  590. 


TABLE  OF  CASES 


A 

Sections 

Abba  V.  Smyth,  21  Utah  109,  59  P.  756 419 

Abbott  V.  76  Land  Co.,  87  Cal.  323,  25  P.  693 123,  861,  910,  1253 

Abbott  V.  76  Land  Co.,  101  Cal.  567,  36  P.  1,  53  P.  445 

122,  217,  418,  868,  870,  1104,  1207 

Abel  V.  Gill,  95  Neb.  279,  145  N.  W.  637 

109,  110,  122,  217,  604,  1224,  1230 

Abell  V.  Munson,  18  Mich.  306,  100  Am.  Dec.  165 123,  410 

Abrahamson  v.  Potts,  125  N.  Y.  S.  1012 119 

Ackerman  v.  Maddux,  26  N.  D.  50,  143  N.  W.  147.  .604,  715,  815,  849,  908 
Acme  Food  Co.  v.  Older,  64  W.  Va.  255,  61  S.  E.  235,  17  L.  K.  A. 

(N.  S.)  807 1119 

Adams,  In  re,  27  Ch.  Div.  394,  54  L.  J.  Ch.  87,  51  L.  T.  Rep.  (N.  S.) 

382,  32  Wkly.  Rep.  883 517,  606,  607,  808 

Adams  v.  Bridges,  141  Ga.  418,  81  S.  E.  203 842 

Adams  v.  Fullam,  43  Vt.  592 402 

Adams  v.  Hughes,  (Tex.  Civ.  App.)  140  S.  W.  1163 410 

Adams  v.  LindseU,  1  B.  &  Aid.  682,  6  Eng.  Rul.  Cas.  80 1219 

Adams  v.  Patrick,  30  Vt.  516 1248 

Adams  v.  Peabody  Coal  Co.,  230  El.  469,  82  N.  E.  645 

101,  102,  103,  326,  332,  517,  605,  606,  804,  1227 

Adams  v.  Rutherford,  13  Ore.  78,  8  P.  896 913 

Agar  V.  Streeter,  183  Mich.  600,  150  N.  W.  160 207,  1230 

Ahl  V.  Johnson,  1  Minn.  215,  (Gil.  185) 938 

Ahrend  v.  Odiorne,  118  Mass.  261,  19  Am.  Rep.  449 419 

Aiple,  etc.  Co.  v.  Spelbrink,  211  Mo.  671,  111  S.  W.  480,  14  Ann. 

Cas.  652 122,  207,  326,  407,  1204,  1209,  1243 

Alabama  etc.  Ins.  Co.  v.  Oliver,  82  Ala.  417,  2  So.  445 416,  417,  1217 

Alaska  S.  Co.  v.  Standard  Box  Co.,  158  Cal.  567,  112  P.  454 419 

Albert  Brick  etc.  Co.  v.  Nelson,  27  N.  Bruns.  276 607 

Alden  v.  Kaiser,  121  Minn.  Ill,  140  N.  W.  343 108 

Alexander  v.  Bosworth,  26  Cal.  App.  589,  147  P.  607 829,  838,  870 

Alexander  v.  Cleland,  13  N.  Mex.  524,  86  P.  425 419 

Alexander  v.  Hoffman,  70  HI.  114 1240,  1241 

Alger  V.  Keith,  105  Fed.  105,  44  C.  C.  A.  371 114 

Allegheny  Oil  Co.  v.  Snyder,  106  Fed.  764,  45  C.  C.  A.  604 328 

Allen,  In  re,  183  Fed.  172 105,  507 

Allen  V.  Chambers,  39  N.  C.  125 1244 

Allen  V.  Mohn,  86  Mich.  328,  49  N.  W.  52,  24  A.  S.  R.  126 1117 

(713) 


714  LAW   OF    OPTION    CONTRACTS 

Sections 

Allen's  Estate,  In  re,  117  Minn.  333,  135  N.  W.  812 105,  835 

Allison  V.   Cocke's  Ex'rs,   106  Ky.   763,   51   S.  W.   593,  21  Ky.  L. 

Kep.  434 109 

Allison  V.  Shilling,  27  Tex.  450,  86  Am.  Dec.  622 1240 

Allyn  V.  Burns,  37  Ind.  App.  223,  76  N.  E.  636 830 

Alston  V.  Connell,  140  N.  C.  485,  53  S.  E.  292 

115,  412,  852,  932,  939,  1232 

Altoona  Portland  C.  Co.  v.  Burbank,  (Okl.)  143  P.  845 414 

Alvord  V.  Cook,  174  Mass.  120,  54  N.  E.  499 123 

Alworth  V.  Seymour,  42  Minn.  526,  44  N.  W.  1030 1218,  1248 

American  A.  C.  Co.  v.  Kennedy,  103  Va.  171,  48  S.  E.  868 117 

American  Cotton  Co.  v.  Herring,  84  Miss.  693,  37  So.  117 1119 

American  C.  &  F.  Co.  v.  Altoona  &  B.  C.  E.  Co.,  218  Pa.  519,  67 

Atl.  838  112 

American  Hide  &  L.  Co.  v.  Chalkley  &  Co.,  101  Va.  458,  44  S.  E.  705.1119 

American  L.  B.  C.  v.  Chase,  149  N.  Y.  S.  6 117 

American  Strawboard  Co.  v.  Haldeman  Paper  Co.,  83  Fed.  619,  27 

C.  C.  A.  634 607,  1005 

Amiss  V.  Witting 's  Ex'rs,  121  La.  501,  46  So.  606,  15  Ann.  Cas.  379.  .  321 
Anderson  v.  Anderson,  251  111.  415,  96  N,  E.  265,  Ann.  Cas.  1912C, 

556 217,  515,  852,  1203,  1209,  1242,  1249 

Anderson  v.  Dailey,  25  Colo.  App.  175,  136  P.  461 419 

Anderson  v.  Kirby,   125   Ga.   62,   54  S.   E.   197,   114  A.   S.  E.   185, 

5  Ann.  Cas.  103 702 

Anderson  v.  Tinsley,  (Tex.  Civ.  App.)  28  S.  W.  121 415 

Anderson  v.  Wallace  Lumber   etc.   Co.,   30   Wash.    147,   70   P.    247 

108,  406,  1116 

Anderson  Carriage  Co.  v.  Gilmore,  129  Mo.  App.  644,  108  S.  W.  594 .  .   849 

Andrew  v.  Meyerdirck,  87  Md.  511,  40  Atl.  173 604,  607,  609 

Andrews  v.  Colo.  Sav.  Bank,  20  Colo.  313,  36  P.  902 116 

Andrews  v.  Lincoln,  95  Me.  541,  50  Atl.  898,  56  L.  E.  A.  103.  .  .220,  221 
Andrews  v.  Marshall  Creamery  Co.,   118   Iowa   595,  92   N.  W.  706, 

60  L.  E.  A.  399,  96  A.  S.  E.  412 831,  833,  834,  869 

Angel  V.  Simpson,  85  Ala.  53,  3  So.  758 918 

Ankeny  v.  Eichardson,  187  Fed.  550,  109  C.  C.  A.  316 

605,  606,  716,  717,  808,  907,  909 

Ansa  La  Butte  Oil  etc.  Co.  v.  Babb,  122  La.  415,  47  So.  754 

215,  222,  223,  604,  605 

Ansley  v.  Bank  of  Piedmont,  113  Ala.  467,  21  So.  59,  59  A.  S.  E.  122.  .1118 

Antonelle  v.  Kennedy  &  Shaw  L.  Co.,  140  Cal.  309,  73  P.  966 920 

Arentsen  v.  Moreland,  122  Wis.  167,  99  N.  W.  790,  106  A.  S.  E.  951, 

65  L.  E.  A.  973,  2  Ann.  Cas.  628 1117,  1118 

Arguello  v.  Edinger,  10  Cal.  150 419 

Armiger  v.  Clark,  Bunb.  Ill 1222 

Armstrong  v.  Maryland  Coal  Co.,  67  W.  Va.  589,  69  S.  E.  195 1236 

Arnett  v.  Tuller,  134  Ga.  609,  68  S.  E.  330 904 

Arnold  v.  Arnold,  17  N.  C.  467 855 


TABLE  OF   CASES  715 

Sections 

Arnold  V.  Blabon,  147  Pa.  372,  23  Atl.  575 1119 

Arnot  V.  Alexander,  44  Mo.  25,  100  Am.  Dec.  252 211 

Art-Aseptible  Fur.  Co.  v.  Shannon,  159  Iowa  225,  140  N.  W.  358 1119 

Ashurst  V.  Peck,  101  Ala.  499,  14  So.  541 1244 

Atchison  T.  &  S.  F.  R.  Co.  v.  Benton,  42  Kan.  698,  22  P.  698 1240 

Athe  V.  Bartholomew,  69  Wis.  43,  33  N.  W.  110,  5  A.  S.  R.  103 

410,  415,  803 

Atkins  V.  Kattman,  50  Ind.  App.  233,  97  N.  E.  174 838 

Atkinson  v.  Wash.  &  Jeff.  College,  54  W.  Va.  32,  46  S.  E.  253 419 

Atlantic  Nat'l  Bank  v.  Demmon,  139  Mass.  420,  1  N.  E.  833 831 

Atlantic  Product  Co.  v.  Dunn,  142  N.  C.  471,  55  S.  E.  299 

827,   849,  852,   871 

Atwood  V.  Rose,  32  Okl.  355,  122  P.  929 837,  838,  1103 

Atwood  V.  Walker,  179  Mass.  514,  61  N.  E.  58 1118 

Audubon  Hotel  Co.  v.  Braunnig,  120  La.  1089,  46  So.  33 802 

Austin  V.  Tawney,  L.  R.  2  Ch.  143 855 

Axe  V.  Tolbert,  179  Mich.  556,  146  N.  W.  418 

109,  114,  301,  311,  327,  333 


B 

Babcock  v.  Meek,  45  Iowa  137 419 

Bacon  v,  Grosse,  165  Cal.  481,  132  P.  1027 1210 

Bacon  v.  Kentucky  C.  Ry.  Co.,  95  Ky.  373,  25  S.  W.  747,  16  Ky.  L. 

Rep.  77 317,  1211,  1221,  1236 

Bacot  V.  Wetmore,  17  N.  J.  Eq.  250 1239 

Badenhop  v.  McCahill,  42  How.  Pr.  (N.  Y.)  192 401 

Baerenklau  v.  Peerless  Realty  Co.,  80  N.  J.  Eq.  26,  83  Atl.  375 1117 

Baessetti  v.  Shenango  Furnace  Co.,  122  Minn.  335,  142  N.  W.  322.  .  .1119 

Bailey  v.  Bishop,  152  N.  C.  383,  67  S.  E.  968 411 

Bailey  v.  Henry,  125  Tenn.  390,  143  S.  W.  1124 419 

Baker  v.  Holt,  56  Wis.  100,  14  N.  W.  8 904 

Baker  v.  Shaw,  68  Wash.  99,  122  P.  611 210,  301,  703,  822,  848 

Ball  V.  Canada  Co.,  24  Grant  Ch.  (U.  C.)  281 716,  862 

Bangs  V.  Nordheimer,  66  Barb.   (N.  Y.)  627 116 

Bank  v.  Doherty,  29  Wash.  233,  69  P.  732,  92  A.  S.  R.  903 120 

Bank  of  Commerce  v.  Scofield,  126  Cal.  156.  58  P.  451 121 

Bank  of  Greenville  v.  Gornto,  161  N.  C.  341,  77  S.  E.  222 607 

Bank  of  Louisville  v.  Baumiester,  87  Ky.  6,  7  S.  W.  170,  9  Ky.  L. 

Rep.  845  510,  1221 

Baraboo  Land  etc.  Co.  v.  Winter,  130  Wis.  457,  110  N.  W.  413.  .  .108,  122 

Barbar  v.  Martin,  67  Neb.  445,  93  N.  W.  722 114 

Barbee  v.  Greenberg,  144  N.  C.  430,  57  S.  E.  125,  12  Ann.  Cap.  967.  .   807 

Barber  v.  Hilderbrand,  42  Neb.  400,  60  N.  W.  594 205 

Barker  v.  Critzer,  35  Kan.  459,  11  P.  382 103,  1107 

Barker  v.  Jones,  8  N.  H,  413 118 


716  LAW   OF   OPTION    CONTRACTS 

Sections 
Barnes  v,  Hustead,  219  Pa.  287,  68  Atl.  839 

101,  102,  123,  214,  301,  332,  406,  824,  932 

Barnes  v.  Kea,  219  Pa.  279,  68  Atl.  836 

101,  110,  122,  871,  924,  932,  1003 

Barnes  v.  Stonebraker,  28  Okl.  75,  113  P.  903 215 

Barnet  v.  Passumpsic  T.  Co.,  15  Vt.  757 913 

Barney  v.  Yazoo  Delta  Land  Co.,  179  Ind.  337,  101  N.  E.  96 707 

BarusdaU  v.  Bradford  Gas  Co.,  225  Pa.  338,  74  Atl.  207 328 

Barren  v.  Sabine,  1  Vern.  268,  23  Eng.  Eeprint  462 849 

Barrett  v.  Davis,  104  Mo.  549,  16  S.  W.  377 123 

Barrett  v.  McAllister,  33  W.  Va.  738,  11  S.  E.  220 

214,   219,  515,  916,  921,   922,   1003,   1008,   1234,   1242,  1254 

Bartlett  v.  Fourton,  115  La.  26,  38  So.  882 215 

Barton  v.  Gray,  48  Mich.  164,  12  N.  W.  30 805 

Barton  v.  New  England  Mortgage  Co.,   (Miss.)   25  So.  302 1251 

Barton  v.  Thaw,  246  Pa.  348,  92  Atl.  312 102,  220 

Bashor  v.  Cady,  2  Ind.  582 849,  871 

Bastin  v.  Bidwell,  L.  E.  18  Ch.  Div.  238 716,  806 

Bates  V.  Woods,  225  HI.  126,  80  N.  E.  84 216 

Bauer  v.  Lumaghi  C.  Co.,  209  HI.  316,  70  N.  E.  634 214,  1250 

Baumann  v.  Cornez,  8  N.  Y.  S.  480 119 

Bawden  v.  Taylor,  254  El.  464,  98  N.  E.  941 216 

Baxter  v.  Calhoun,  222  Fed.  Ill 711 

Baynham  v.  Guy's  Hospital,  3  Ves.  Jun.  295,  30  Eng.  Reprint  1019.  .    124 

Beach  v.  Bellwood,  104  Va.  170,  51  S.  E.  184 123 

Bean  v.  Burbank,  16  Me.  458,  33  Am.  Dec.  681 301,  1220 

Bean  v.  Lamprey,  82  Minn.  320,  84  N.  W.  1016 419 

Becker  v.  Chester,  115  Wis.  90,  91  N.  W.  87,  650 221 

Beckman  v.  Waters,  3  Cal.  App.  734,  86  P.  997 705,  1124 

Beckwith  v.  Cheever,  21  N.  H.  (1  Fost.)  41 814,  824 

Beckwith-Anderson  Land  Co.  v.  Allison,  26  Cal.  App.  473,  147  P.  482  109 
Beddow  v.  Flage,  22  N.  D.  53,  132  N.  W.  637 

210,  417,  871,  907,  914,  930,  1003,  1203,  1209,  1230,  1238,  1244,  1247 

Beetem  v.  Follmer,  87  Neb.  514,  127  N.  W.  858 1118 

Beggs  V.  James  Hanley  Brewing  Co.,  27  R.  L  385,  62  Atl.  737,  114 

A.  S.  R.  44 818 

Behrens  v.  Cloudy,  50  Wash.  400,  97  P.  450 604,  607 

Beiseker  v.  Amberson,  17  N.  D.  215,  116  N.  W.  94.  .841,  845,  927,  1120 
Bell  V.  Hatfield,  121  Ky.  560,  89  S.  W.  544,  72  L.  E.  A.  (N.  S.)  529.1119 

Bell  V.  Howard,  9  Mod.  302,  88  Eng.  Reprint  467 1203 

Bell  V.  Mendenhall,  71  Minn.  331,  73  N.  W.  1086 902 

Bell  V.  Riggs,  34  Okl.  834,  127  P.  427,  41  L.  R.  A.  (N.  S.)   Ill 120 

Bell  V.  Wright,  31  Kan.  236,  1  P.  595. .  .715,  716,  910,  1002,  1008,  1244 
Beller  v.  Robinson,  50  Mich.  264,  15  N.  W,  448.  .410,  411,  816,  834,  835 

Belloc  V.  Davis,  38  Cal.  242 121 

Bender  v.  Bean,  52  Ark.  132,  12  S.  W.  180,  241 902 

Bender  v.  Schatzkin,  96  N.  Y.  S.  203 1104 

Bendix  v.  Staver  Carriage  Co.,  174  HI.  App.  589 215,  216 


TABLE  OF   CASES  717 

Benedict  y.  Lynch,  1  Johns.  Ch.  370,  7  Am.  Dec.  484 1211,  1222 

Benedict  v.  Pincus,  191  N.  Y.  377,  84  N.  E.  284 

101,  102,  113,  122,  205,  331,  501,  502,  871 

Bennett  v.  Farkas,  126  Ga.  228,  54  S.  E.  942 908,  1125 

Bennett  v.  Giles,  220  111.  393,  77  N.  E.  214 849,  1006,  1248 

Benson  v.  Shotwell,  87  Cal.  49,  25  P.  249 108,  109,  1124 

Bentlej  v.  Barnes,  162  Ala.  524,  50  So.  361 810 

Benton  v.  Schulte,  31  Minn.  312,  17  N.  W.  621 419 

Benz,  In  re,  221  Fed.  123 604 

Bergland  v.  Frawley,  72  Wis.  559,  40  N.  W.  372 807 

Bernard  v.  Torrance,  5  Gill.  &  J.   (Md.)   383 704,  849 

Berry  v.  French,  24  Colo.  App.  519,  135  P.  985 419 

Berry  v.  Frisbie,  120  Ky.  337,  86  S.  W.  558,  27  Ky.  L.  Rep.  724 

122,  330,  331,  710,   1204,   1211,   1221,  1236 

Berthold  ▼.  Reyburn,  37  Mo.  586 906 

Berwind  v.  Williams,  172  Pa.  1,  33  Atl.  353 107 

Bessinger  v.  Erhardt,  77  N.  Y.  S.  577,  34  App.  Div.  169 1116 

Bettens  v.  Hoover,  12  Cal.  App.  313,  107  P.  329 

835,   855,   872,   1125,    1253 

Betton  V.  Williams,  4  Fla.  11 1240 

Beulah  Marble  Co.  v.  Mattice,  22  Colo.  547,  45  P.  432 116,  516 

Bibelhausen  v.  Bibelhausen,  (Wis.)  150  N.  W.  516 303 

Big  Bend  L.  Co.  v.  Hutchings,  71  Wash.  345,  128  P.  652 604,  1004 

Bigler  v.  Baker,  40  Neb.  325,  58  N.  W.  1026,  24  L.  R.  A.  255 

1123,  1207,  1230,  1237 

Billingslea  v.  Smith,  77  Md.  504,  26  Atl.  1077 216 

Bimrose  v.  Matthews,  78  Wash.  32,  138  P.  319 609 

Binford  v.  Steele,  161  N.  C.  660,  77  S.  E.  954 839,  908,  914,  921 

Binns  v.  Mount,  28  N.  J.  Eq.  24 942 

Birch  V.  Baker,  85  N.  J.  L.  660,  90  Atl.  297 405 

Birmingham  Canal  Co.  v.  Cartwright,  L.  R.  11  Ch.  Div.  421 

219,  221,  1242 

Birmingham  Paint  etc.  Co.  v.  Crampton,  (Ala.)  39  So.  1020 903 

Bizzel  V.  Roberts,  156  N.  C.  272,  72  S.  E.  378 120 

Bjork  V.  Bean,  56  Minn.  244,  57  N.  W.  657 509 

Black  V.  Crowther,  74  Mo.  App.  480 415 

Black  V,  Maddox,  104  Ga.  157,  30  S.  E.  723 

101,  102,  103,  105,  301,  326,  332,  703, 
942,  1215,  1217,  1218,  1219,  1227,  1236,  1237,  1242 

Blackmore  v.  Boardman,  28  Mo.  420 804,  810 

Blair  v.  Hamilton,  48  Ind.  32 804,  902 

Blake  v.  Blake,  7  Iowa  46 324 

Blake  v.  J.  Neils  L.  Co.,  Ill  Minn.  513,  127  N.  W.  450 • 411 

Blake  v.  Voigt,  134  N.  Y.  69,  31  N.  E.  256,  30  A.  S.  R.  622 404 

Blakeman  v.  MiUer,  136  Cal.  138,  68  P.  587,  89  A.  S.  R.  120 

221,   222,   224,   607 

Blanchard  t.  Ames,  60  N.  H.  404 702,  1]02 


718  LAW   OF   OPTION    CONTRACTS 

Sections 

Blanchard  r.  Jackson,  55  Kan.  239,  37  P.  986 941,  1250 

Blanchard  v.  Trim,  38  N.  Y.  225 410 

Block  V.  Eyan,  4  App.  D.  C.  283 205 

Blodgett  V.  Lanyon  Zinc  Co.,  120  Fed.  893,  58  C.  C.  A.  79 86G 

Blood  V.  Goodrich,  9  Wend.  (N.  Y.)  68,  24  Am.  Dec.  121 410,  811 

Blount  V.  Connolly,  110  Mo.  App.  603,  85  S.  W.  605 607,  810,  1246 

Bluegrass  Realty  Co.  v.  Shelton,  148  Ky.  666,  147  S.  W.  33 

1203,   1246,   1248 

Bluthenthal  v.  Atkinson,  93  Ark.  252,  124  S.  W.  510 

801,  819,  862,  867,  870,  872 

Board  of  Trustees  v.  Piersol,  161  Mo.  270,  61  S.  W.  811 120 

Board  of  Water   Com'rs   of   White  Plains,   In   re,   176   N.   Y.   239, 

68  N.  E.  348 108 

Bockmann  v.  Davis,  172  HI.  App.  505 869 

Boilwell  Water  Power  Co.  v.  Old  Town  Electric  Co.,   96   Me.   117, 

51  Atl.   802 860,  1125 

Bogle  V.  Jarvis,  58  Kan.  76,  48  P.  558 415,  416,  827,  941,  1123 

Boldt  V.  Early,  33  Ind.  App.  434,  70  N.  E.  271,  104  A.  S.  R.  255.  .  .1253 

Boley  V.  Sonora  Dev.  Co.,  126  Mo.  App.  116,  103  S.  W.  975 215 

Bonanza  Min.  etc.  Co.  v.  Ware,  78  Ark.  306,  95  S.  W.  765 107 

Bond  V.  Bourke,  54  Colo.  51,  129  P.  223,  43  L.  R.  A.  (N.  S.)  97.  .  .1119 

Bonicamp  v.  Starbuck,  25  Okl.  483,  106  P.  839 410 

Bonnewell  v.  Jenkins,  L.  R.  8  Ch.  Div.  70 841 

Boone  v.  Coe,  153  Ky.  233,  154  S.  W.  900 405,  419 

Boone  t.  Templeman,  158  Cal.  290,  110  P.  947 923,  931 

Booth  V.  Milliken,  111  N.  Y.  S.  791,  127  App.  Div.  522 1101 

Borel  V.  Mead,  3  N.  Mex.  84,  2  P.  222 331,  407,  1230,  1236 

Borst  V.  Simpson,  90  Ala.  373,  7  So.  814 

115,  301,  514,  703,  868,  914,  924,  927,  1124 

Bosshardt  &  Wilson  Co.  v.  Crescent  Oil  Co.,  171  Pa.   109,  32  Atl. 

1120 313,  414,  416,  703,  816 

Boston  &  M.  R.  Co.  v.  Bartlett,  3  Cush.  (Mass.)  224 

301,  703,  704,  1219,  1220,  1224,  1229 

Boston  &  W.  St.  Ry.  Co.  v.  Rose,  194  Mass.  142,  80  N.  E.  498 

417,  862,  871,  914,  919,  921,  922,  1002,  1003,  1004,  1229 

Bostwick  V.  Hess,  80  111.  138 502,  513,  827 

Boucher  v.   Van  Buskirk,  9  Ky.  (2  A.  K.  Marsh)  345 

305,  827,  1211,  1221 

Bourke  v.  Kissack,  242  HI.  233,  89  N.  E.  990 334,  939 

Bovee  v.  Boyle,  25  Colo.  App.  165,  136  P.  467 112,  829,  1120 

Bowen  v.  McCarthy,  85  Mich.  26,  48  N.  W.  155 

704,  707,  838,  840,  841,  856,  857,  924,  929,  1003 

Bower  v.  Stein,  177  Fed.  673,  101  C.  C.  A.  299 121 

Bowker  v.  Cunningham,  78  N.  J.  Eq.  458,  79  Atl.  608 1248 

Bowman  v.  Banks,  83  Ark.  524,  104  S.  W.  209 939,  940 

Boyce  v.  Prichett's  Heirs,  36  Ky.  (6  Dana)  231 903 

Boyd  T.  Brinckin,  55  Cal.  427 305,  310,  515,  817,  827 


TABLE   OP    CASES  719 

Sectio7is 

Boyd  V.  Brown,  47  W.  Va.  238,  34  S.  E.  907 1236 

Boyd  V.  DeLancey,  45  X.  Y.  S.  693,  17  App.  Div.  567 928,  1104 

Boyden  v.  Hill,  198  Mass.  477,  85  N.  E.  413 

205,  217,  710,  802,  824,  1117,  1118,  1121 

Boyer  v.  Nesbitt,  227  Pa.  398,  76  Atl.  103 102,  215,  506,  703,  871 

Boynton  v.  Woodbury,  101  Mass.  346 107,  112,  820,  906 

Brackenridge  v.  Claridge,  91  Tex.  527,  44  S.  W.  819,  43  L.  E.  A.  593 

114,  205 

Bradford  v.  Foster,  87  Tenn.  4,  9  S.  W.  195 

301,  319,  703,  871,  912,  926,  1233,  1240 

Bradford  v.  Haas,  111  La.  148,  35  So.  493 201 

Bradford  Inv.  Co.  v.  Joost,  117  Cal.  204,  48  P.  1083 419 

Bradley  v.  Bradley,  14  Ont.  L.  Rep.  473,  10  Ont.  Wkly.  Rep.  223.868,  923 

Brame  v.  Swain,  111  N.  C.  540,  15  S.  E.  938 1116 

Brannan's  Estate,  In  re,  (Cal.)  51  P.  320 203 

Branner  v.  Thomas,  37  Kan.  282,  15  P.  211 506 

Branson  v.  Bailey,  246  111.  490,  92  N.  E.  940 221 

Bras  V.  Sheffield,  49  Kan.  702,  31  P.  306,  33  A.  S.  R.  386 .502,  509 

Braun  y.  Wisconsin  Rendering  Co.,  92  Wis.  245,  66  N.  W.  196 

113,  123,  217,  1245 

Breen  v.  Mayne,  141  Iowa  399,  118  N.  W.  441 123,  407,  415, 

417,  801,  802,  809,  814,  815,  824,  837,  838,  839,  914,  915,  921,  1003 

Brehm  v.  Sperry,  92  Md.  378,  48  Atl.  368 1244 

Brewer  v.  Brewer,  19  Ala.  481 903 

Brewer  v.  Broadwood,  L.  R.  22  Ch.  Div.  105 113 

Brewer  v.  Sowers,  118  Md.  681,  86  Atl.  228 

207,  303,  324,  332,  417,  519,  869,  908, 
909,  924,  933,  1101,  1126,  1217,  1224,  1244,  1254 

Breyfogle  v.  Walsh,  80  Fed.  172,  25  C.  C.  A.  357 868,  928 

Brickell  v.  Atlas  Assur.  Co.,  10  Cal.  App.  17,  101  P.  16 10-5,  511 

Bricker  v.  Hughes,  4  Ind.  146 214 

Bride  v.  Reeves,  36  App.  D.  C.  476 1237 

Bridgeford  &  Co.  v.  Meagher,  144  Ky.  479,  139  S.  W.  750 117 

Bridges  v.  Hitchcock,  5  Bro.  P.  C.  6,  2  Eng.  Reprint  498 223 

Briede  v.  Babst,  131  La.  159,  59  So.  106 903 

Briggs  V.  Chase,  105  Me.  317,  74  Atl.  796 834,  835 

Brigham  v.  Carlisle,  78  Ala.  243,  56  Am.  Rep.  28 404 

Bright  V.  James,  31  R.  L  492,  85  Atl.  545 1250 

Bright  V.  Offield,  81  Wash.  442,  143  P.  159 120 

Briles  v.  Paulson,  (Cal.)  149  P.  804 513,  716 

Briles  v.  Paulson,  (Cal.)  149  P.  169 716,  863,  1204 

Brink  v.  FreoflF,  40  Mich.  610 119 

Brink  v.  Mitchell,  135  Wis.  416,  116  N.  W.  16.  .321,  716,  909,  100.5,  1118 

Brinton  v.  Scull,  55  N.  J.  Eq.  747,  35  Atl.  843 1242 

Britton  v.  Phillips,  24  How.  Pr.   (N.  Y.)    Ill 814,  819,  848 

Broadway  Hospital  &  S.  Co.  v.  Decker,  47  Wash.  586,  92  P.  445 

122,  123,  214,  222,  406,  1207 


720  LAW   OF   OPTION    CONTRACTS 

Sections 
Broadway  &  S.  A.  E.  Co.  v.  Metzger,  15  N.  Y.  S.  662,  27  Abb.  N.  C. 

160   809 

Brockway  v.  McClun,  148  111.  App.  465,  affd.  90  N.  E.  374 120 

Bromley  v.  Jeffereys,  Prec.  Ch.  138,  24  Eng.  Reprint  66 1219,  1222 

Brooke  v.  Garrod,  3  Kay  &  J.  608,  2  DeG.  &  J.  66,  69  Eng.  Reprint 

1252   849,  870 

Brooklyn  B.  C.  v.  McGuire,  116  Fed.  782 117 

Brooks  V.  Miller,  103  Ga.  712,  30  S.  E.  630.. 822,  838,  856,  1117,  1118 
Brooks  V.  Trustee  Co.,  76  Wash.  589,  136  P.  1152 

112,   222,   856,  857,   858,  1252 

Brooks  V.  Wentz,  61  N.  J.  Eq.  474,  49  Atl.  147 214,  515,  516,  871 

Brown  v.  Beckwith,  60  Fla.  310,  53  So.  542 122 

Brown  v.  Britton,  58  N.  Y.  S.  353,  41  App.  Div.  57 1210 

Brown  v.  Dysinger,  1  Rawle.   (Pa.)   408 902 

Brown  v.  Farmers  &  Merch.  Nat'l  Bank,   (Kan.)   147  P.  537 705 

Brown  v.  Fowler,  65  Ohio  St.  507,  63  N.  E.  76 326 

Brown  v.  Hall,  5  Lans.   (N.  Y.)   117 403 

Brown  v.  Honiss,  70  N.  J.  L.  260,  58  Atl.  86,  s.  c.  74  N.  J.  L.  501, 

68  Atl.  150 1118 

Brown  v.  Larry,  153  Ala.  452,  44  So.  841 715,  717,  931,  932,  1123 

Brown  v.  Mason,  155  Cal.  155,  99  P.  867,  12  L.  R.  A.  (N.  S.)  328.  .    205 

Brown  v.  Norcross,  59  N.  J.  Eq.  427,  45  Atl.  605 1236 

Brown  v.  Rasin  Monumental  Co.,  98  Md.  1,  55  Atl.  391 117 

Brown  v.  Reichling,  86  Kan.  640,  121  P.  1127 1005,  1244,  1248 

Brown  v.  Sanborn,  21  Minn.  402 410 

Brown  v.  San  Francisco  Sav.  Union,  134  Cal.  448,  66  P.  592 

301,  703,  704 

Brown  V.  Slee,  103  U.  S.  828,  26  L.  Ed.  618 839,  871,  1003 

Browning  v.  Cover,  108  Pa.  595 206 

Brueu  v.  Astor,  Anth.  N.  P.  (N.  Y.)   133 418 

Bruschi  v.  Mining  Co.,  147  Cal.  120,  81  P.  404 1102,  1123 

Brush  V.  Beecher,  110  Mich.  597,  68  N.  W.  420,  64  A.  S.  R.  373 223 

Bryant  Timber  Co.  v.  Wilson,  151  N.  C.  154,  65  S.  E.  932 

301,  515,  703,  871,  1209,  1210,  1232,  1242,  1247,  1248 

Buck  V.  Walker,  115  Minn.  239,  132  N.  W.  205,  Ann.  Cas.  1912D,882 

215,   220,   221,   223 

Buckland  v.  Papillon,  L.  R.   2  Ch.   App.   67,  12  Jur.    (N.   S.)    992, 

36  L.  J.  Ch.  81,  15  L.  T.  Rep.  (N.  S.)  378,  15  Wkly.  Rep.  92. . .   607 

Buckmaster  v.  Thompson,  36  N.  Y.  558 209 

Buckwalter  v.  Klein,  5  Ohio  Dec.  55 517,  709,  812 

Buhl  V.  Stephens,  84  Fed.  922 404,  823 

Bullock  V.  Cutting,  140  N.  Y.  S.  686 321,  869,  924 

Bullock  V.  Grinstead,  95  Ky.  261,  24  S.  W.  867 831,  836 

Bundy  v.  Dare,  62  Iowa  295,  17  N.  W.  534 814,  907 

Burks  V.  Davies,  85  Cal.  110,  24  P.  613,  20  A.  S.  R.  213 

215,  712,  1005,  1109,  1112 

Burner  v.  Burner,  115  Va.  484,  79  S.  E.  1050 824,  871 


TABLE  OF   CASES  721 

Sectiovn 

Burnet  ▼.  Blackmar,  43  Ga.  569 418 

Burnet  v.  Bisco,  4  Johns.    (N.  Y.)    235 301,  1215,  1222 

Burnham  v.  Roberts,  70  HI.  19 1117 

Burns  v.  Fox,  113  Ind.  205,  14  N.  E.  541 1244 

Burrell  v.  Root,  40  N.  Y.  496 402 

Burrill  v.  Garst,  19  R.  I.  38,  31  Atl.  436 1240 

Burt  V.  Henry,  10  Ala.  874 810,  814,  903 

Burt  V.  Stringfellow,  (Utah)   143  P.  234 114,  122 

Burton  v.  Shotwell,  76  Ky.   (13  Bush.)   271 703,  805,  871 

Bush  V.  Merriman,  87  Mich.  260,  49  N.  W.  567 123,  217 

Bushman  v.  Faltis,    (Mich.)    150  N.  W.  848 209 

Butler  V.  Thompson,  92  U.  S.  412,  23  L.  Ed.  684 105,  215 

Butler  V.  Threlkeld,  117  Iowa  116,  90  N.  W.  584 123,  217,  926,  1245 

Butler  V.  Wright,  186  N.  Y.  259,  78  N.  E.  1002 1210 

Butman  v.  Butman,  213  111.  104,  72  N.  E.  821 1242 

Butt  V.  Bondurant,  23  Ky.  (7  T.  B.  Mon.)  421 115,  1221 

Buttner  v.  Smith,  (Cal.)  36  P.  652 825,  909 

Byers  v.  Denver  C.  R.  Co.,  13  Colo.  552,  22  P.  951 

305,  827,  868,  914,  921,  922,  940,  1003,  1244,  12.50 

Byrne  v.  Van  Tienhoven,  L.  R.  5  C.  P.  Div.  344,  49  L.  R.  C.  P.  316, 

42  L.  T.   (N.  S.)   371 704,  818 

Byrne  Mill  Co.  v.  Robertson,  149  Ala.  273,  42  So.  1008 404,  417 


C 


Cahaba  Coal  Co.  v.  Veitch,  186  Ala.  220,  65  So.  75 301 

Caine  v.  Hagenbarth,  37  Utah  69,  106  P.  945 105,  122,  123,  610 

Calanchini  v,  Branstetter,  84  Cal.  249,  24  P.  149 

418,  941,  1008,  1226,  1250,  1252 

Caldwell  v.  Frazier,  65  Kan.  24,  68  P.  1076 101,  512,  517 

Cal.  Hirsch  &  Sons  I.  &  R.  Co.  v.  Paragould  &  M.  B.  Co.,  48  Mo. 

App.  173,  127  S.  W.  623 1214 

California  Sav.  &  L.  Co.  v.  Culver,  127  Cal.  107,  59  P.  292 120 

Callaghan  v,   Hawkes,   121   Mass.   298 702 

Callahan  Co.  v.  Michael,  45  Ind.  App.  215,  90  N.  E.  642 

122,  210,  211,  834,  8Zr, 

Callan   v.   McDaniel,   72   Ala.   96 607,  810 

Calla^n-ay  v.  Hubner,  99  Md.  529,  58  Atl.  362 116 

Callaway  v.  Wilson,   141  Cal.  421,  74  P.   1035 20-5 

Calloway  v.  Henderson,  130  Mo.  77,  32  S.  W.  34 123 

Cambria  Iron  Co.  v.  Leidy,  226  Pa.   122,  75  Atl.  186 

516,   710,   816,   1124 

Cameron  v.  Shumway,  149  Mich.  634,  113  N.  W.  287 

501,  502,  602,  609,  849,  871 

Camp  V.  Barber,  87  Vt.  235,  88  Atl.  812 405 

Campbell  v.  Babcock,  13  N,  Y.  S.  843,  26  Abb.  N.  C.  35 1126 

46 — Option  Contracts. 


722  LAW    OF    OPTION    CONTRACTS 

Sections 

Campbell  v.  Burnett.   120  Md.  214,  87  Atl.  894 419 

Campbell  v.  McFadden,  9  Tex.  Civ.  App.  379,  31  S.  W.  436 1242 

Campbell  v.  Timmerman,   139  111.   App.   151 401,  402 

Campbell's  Estate,  In  re,  149  Cal.  712,  87  P.  573 220 

Canary  v.  Russell,  30  N.  Y.  S.  122 1126 

Cautwell  V.  Johnson,  236  Mo.  575,  139  S.  W.  365 IIG 

Cauty  V.  Brown,  11  Cal.  App.  487,  105  P.  428...  703,  707,  814,  815,  820 

Cape  Fear  L.  Co.  v.  Small,  84  S.  C.  434,  66  S.  E.  880 869,  906,  930 

Caplan  v.  Buckner,  123  Md.  590,  91  Atl.  481 1248 

Caplice  v.  Kelley,  27  Kan.  359 324 

Carbondale  Inv.  Co.  v.  Burdick,  58  Kan.  517,  50  P.  442 1118 

Carhart  v.  White  M.  &  T.  Co.,  122  Tenn.  455,   123  S.  W.   747,   19 

Ann.    Cas.    396 832,  834 

Carleton  v.   Hobart,   14  Wkly.  Rep.   772 816 

Carnegie  Natural  Gas  Co.  v.  South  Penn  Oil  Co.,  56  W.  Va.  402,  49 

S.  E.  548 122,  1126,  1209,  1236 

Carney  v.  Pendleton,  139  App.  Div.  152,  123  N.  Y.  S.  738 415 

Carpenter  v.  Thornburn,  76  Ark.  578,  89  S.  W.   1047 

715,  717,  1002,  1244 

Carr  v.  Duyall,  14  Pet.  77   (U.  S.) 815 

Carroll  Co.  Sav.  Bank  v.  Strother,  28  S.  C.  504,  6  S.  E.  313 120 

Carson  v.  Redding,  52  Colo.  178,  120  P.   147 122 

Carter  v.  Hook,  116  Va.  812,  83  S.  E.  386 1234 

Carter  v.  Love,  206  lU.  310,  69  N.  E.  85 114,  217,  703,  871,  1224 

Carter  v.  Phillips,  144  Mass.  100,  10  N.  E.  500 852,  862 

Carter  v.  Reaume,  159  Mich.  160,  123  N.  W.  539 1116,  1117 

Carter  White  Lead  Co.  v.  Kinlin,  47  Neb.  409,  66  N.  W.  536 117,  404 

Carton  v.  Wilson,  13  Ont.  L.  Rep.  412 301,  703,  809 

Cassville  Roller  Mill  Co.  v.  Aetna  Ins.  Co.,  105  Mo.  App.   146,  79 

S.  W.  720 903 

Castle  Creek  W.  Co.  v.  City  of  Aspen,  146  Fed.  8,  76  C.  C.  A.  516, 

8  Ann.  Cas.  660 871,  1209,  1212 

Castner  v.  Walrod,  83  HI.  171,  25  Am.  Rep.  369 1252 

Castor  V.  Muramoto,  69  Wash.  145,  125  P.  153 120 

Cates  V.  McNeil,  169  Cal.  967,  147  P.  944 

321,  844,  847,  850,  869,  912,  918,  921,  1204,  1244 

Cathcart  v.  Robinson,  30  U.  S.  (5  Pet.)   264,  8  L.  Ed.  120 1247 

Catholic  F.  M.  Soc.  v.  Oussani,  215  N.  Y.  1,  109  N.  E.  80 117,  1236 

Cavagnaro  v.  Johnson,  77  N.  J.  Eq.  272,  79  Atl.  686,  affg.  70  Atl. 

995,  74  N.  J.  Eq.  589 1214 

Cavanaugh  v.  Casselman,  88  Cal.  543,  26  P.  515 417 

Cedar  Rapids  &  I.  C.  Ry.  &  L.  Co.  v.  Chicago  R.  I.  &  P.  Ry.  Co., 

145  Iowa  528,  124  N.  W.  323 117 

Cella  V.  Brown,  144  Fed.  742,  75  C.  C.  A.  608 1239 

Center  v.  Center,  38  N.  H.  318 854 

Central  Fruit  Co.  v.  Worscester  Cycle  Mfg.  Co.,  110  Fed.  491 119 


TABLE  OF   CASES  723 

Sections 
Central  Land  Co.  v.  Johnson,  95  Va.  223,  28  S.  E.  175 

407,  1223,  1236,  1237,  1249 

Chadbourne  v.  Stockton,  etc.,  Soc,  88  Cal.  636,  26  P.  529 

715,  716,  1244 

Chadsey  v.  Condley,  62  Kan.  853,  62  P.  663 871,  1004,  1228,  1236 

Chahoon  v.  Hollenbeck,  16  Serg.  &  E.  (Pa.)  425,  16  Am.  Dec.  587.  .   903 

Chamberlain  v.  Dunlop,  126  N.  Y.  45,  26  N.  E.  966 835 

Chamberlain  v.  Jones,  52  N.  Y.  S.  998,  32  App.  Div.  237 403 

Chambers  v.  Prewitt,  172  111.  615,  50  N.  E.  145 123 

Champion  v.  Plummet,  5  Esp.  N.  P.  240 1222 

Champion  Gold  M.  Co.  v.  Champion  Mines,  164  Cal.  205,  128  P.  315 

513,  827,  716,  908,  920,  929,  940,  1102,  1123 

Chandler  &  Co.  v.  McDonald-Weber  Co.,  215  Mass.  365,  102  N.  E.  319 

124,  502,  855 

Chandler  Grain  &  Milling  Co.  v.  Shea,  213  Mass.  398,  100  N.  E.  663.  .1119 

Chapin  v.  Whitsett,  3  Colo.  315 119 

Chap;  .;in  v.  Propp,   (Minn.)    147  N.  W.  442 108,  1118 

Chas.  J.  Smith  Co.  v.  Anderson,  (N.  J.  Eq.)  95  Atl.  358 

514,  607,  703,  812,  1211 

Cheek  v.  Nicholson,  (Tex.  Civ.  App.)  133  S.  W.  707 108 

CheUis  V.  Grimes,  72  N.  H.  337,  56  Atl.  742 406 

Cheney  v.  Cook,  7  Wis.  413 407,  871,  1206,  1234,  1246 

Cheney  v.  Wagner,  33  Neb.  310,  50  N.  W.  13 942 

Chenoweth  v.  Butterfield,  11  Ariz.  315,  94  P.  1131 108 

Chenoweth  v.  Pacific  Expo.  Co.,  93  Mo.  App.  185 418 

Cherry  v.  Smith,  22  Tenn.  19,  39  Ajn.  Dec.  150 215,  311,  1233 

Cherryvale  Water  Co.  v.  Cherryvale,  65  Kan.  219,  69  P.  176 

116,  712,  871,  1212 

Chesbrough  v.  Vizard  Inv.  Co.,  156  Ky.  149,  160  S.  W.  725 

114,  217,  506,  515,  602,  928,  1244,  1254 

Chesterman  v.  Mann,  (1851),  9  Hare  206 1237 

Chezum  v.  Kreighbaum,  4  Wash.  680,  30  P.  1098,  32  P.  109 114 

Chicago  Auditorium  Ass'n  v.  Corporation  Fine  Arts  Bldg.,  244  111. 

532,  18  Ann.  Cas.  253,  aflfd.  91  N.  E.  665 122,  123,  1212 

Chicago  &  A.  R.  Co.  v.  Schoeneman,  90  HI.  258 1204 

Chicago  etc.  R.  Co.  v.  Fosdick,   106  U.   S.  47,  21  L.  Ed.  47,  1   S. 

Ct.  10 121 

Chicago  &  G.  E.  R.  Co.  v.  Dane,  43  N.  Y.  240 821 

Childs  V.  Fischer,  52  111.  205 118 

Chiles  V.  Nelson,  7  Dana  281   (Ky.) 818 

Chipman  v.  Thompson,  Walk.  Ch.   (Mich.)   405 913 

Chisholm  v.  Toplitz,  178  N.  Y.  599,  70  N.  E.  1096,  affg.  82  N.  Y.  S. 

1081,  82  App.  Div.  346 203 

Chittenden  v.  W.  U.  T.  Co.,  154  Mich.  1,  117  N.  W.  548 S33,  835 

Choice  V.  Moseley,  1  Bailey  (S.  C.)   136,  19  Am.  Dec.  661 854 

Chretien  v.  Doney,  1  N.  Y.  419 836 


724  LAW   OF    OPTION    CONTRACTS 

Sections 
Christian  Feigenspan  v.  Popowska,  75  N.  J.  Eq.  342,  72  Atl.  1003.  . 

122,  825,  831 

Christian  &  Craft  Grocery  Co.  v.   Bienville  etc.  Co.,   106  Ala.   124, 

17  So.  352 210,  821 

Christiansen  v.  Aldrich,  30  Mont.  446,  76  P.  1007 419,  1209,  1244 

Christie's  Appeal,  In  re,  85  Pa.  463 509 

Church  V.  Standard  etc.  Co.,  65  N.  Y.  S.  116,  52  App.  Div.  407.  .  .113,  519 

Cifelli  V.  Santamaria,  79  N.  J.  L.  354,  75  Atl.  434 607,  802 

Cincinnati  Equipment  Co.  v.  Strang,  215  Pa.  475,  64  Atl.  678 112 

Cincinnati  Ex,  Co.  v.  Marsans,  216  Fed.  269 117 

Citizens  Bank  v.  Brigham,  61  Kan.  727,  60  P.  754 123 

City  Bank  of  Baltimore  v.  Smith,  3  Gill  &  J.   (Md.)  265 913 

City  of  Birmingham  v.  Forney,  173  Ala.  1,  55  So.  618.  .515,  1209,  1242 
City  of  Colorado  Springs  v.  Pikes  Peak  Hydro-Electric  Co.,  67  Colo. 

169,  140  P.  921 319 

City  of  Fayetteville  v.  Fayetteville  Water  L.  &  P.  Co.,   135  Fed. 

400    1212 

City  of  Indianapolis  v.  Gas  Co.,  144  Fed.  640,  75  C.  C.  A.  442.  .116,  215 

City  of  Los  Angeles  v.  Water  Co.,  124  Cal.  368,  57  P.  210 

113,  116,  513,  520 

City  of  Louisville  v.  Bank  of  U.  S.,  42  Ky.  (13  B.  Mon.)  138 1102 

City  of  Providence  v.  St.  John's  Lodge,  2  R.  I.  46 1212 

City  and  County  of  Denver  v.  New  York  Trust  Co.,  229  U.  S.  123, 
57  L.  Ed.  1101,  33  S.  Ct.  657,  reversing  187  Fed.  890,  11  C,  C. 

A.  224 116,  826 

Clark  V.  American  Developing  &  M.  Co.,  28  Mont.  468,  72  P.  978.  . 

712,  920,   1112 

Clark  V.  Baker,  6  Mont.  153,  9  P.  911 119 

Clark  V.  Burr,  85  Wis.  649,  55  N.  W.  401 512,  838,  841,  1005 

Clark  V.  Cagle,  141  Ga.  703,  82  S.  E.  21 105 

Clark  V.  East  Lake  Lumber  Co.,  158  N.  C.  139,  73  S.  E.  793 

107,  837,  838,  841,  1110 

Clark  V.  Fey,  121  N.  Y.  470,  24  N.  E.  703 408 

Clark  V.  Gordon,  35  W.  Va.  735,  14  S.  E.  255 515,  710,  1003 

Clark  V.  Guest,  54  Ohio  St.  298,  43  N.  E.  862 410 

Clark  V.  Harmer,  5  App.  D.  C.  114 704,  805,  806,  814 

Clark  V.  Kelley,  (Iowa)  109  N.  W.  292 117 

Clark  V.  Paddock,  24  Idaho  142,  132  P.  795,  46  L.  R.  A.  (N.  S.) 

475  121 

Clark  V.  Rosario  M.  &  M.  Co.,  176  Fed.  180,  99  C.  C.  A.  534 1204 

Clark  V.  Sears,  3   Iowa   104 933 

Clarke  v.  Merrill,  51  N.  H.  415 833,  834 

Clarno  v.  Grayson,  30  Ore.  Ill,  46  P.  426 

113,  308,  312,  321,  501,  502,  861,  862,  910,  920,  927,  1204,  1244 

Clason's  Ex'rs  v.  Bailey,  14  Johns.  (N.  Y.)  484 406,  1211,  1222 

Clay  V.  Rufford,  5  DeG.  &  Sm.  768,  64  Eng.  Reprint  1337 203 

Cleaves  t.  Walsh,  125  Mich.  638,  84  N.  W.  1108 713,  838,  859 


TABLE   OF    CASES  "^25 

Sectio7in 
ClewB  V.  Jamieson,  182  U.  S.  461,  45  L.  Ed.  1183,  21  S.  Ct.  845.  ..  .   216 

Clifford  V.  Gressinger,  96  Ga.  789,  22  S.  E.  399 715,  1123,  1125 

Clifford  V.  Meyer,  6  Ind.  App.  633,  34  N.  E.  23 805 

Clinchfield  Coal  Co.  v.  Powers,  107  Va.  393,  59  S.  E.  370 

217,  1204,  1248 

Clough  V.  Cook,  (Del.  Ch.)  87  Atl.  1017 

^   ; '_ : 223,  515,  1203,  1204,  1242,  1248 

Coad  V.   Home  Cattle  Co.,  32  Neb.  761,  49  N.  W.  757,  29  A.  S.  B. 

465  ^^^ 

Cocanaugher  v.  Green,  93  Ky.  519,  20  S.  W.  542,  14  Ky.  L.  Rep. 

507    216 

Cockrell  v.  Thompson,  85  Mo.  510 •  •  •  •  • 

Codding  V.  Wamsley,  1  Hun.  585,  4  N.  Y.  Sup.  Ct.   (4  Thorn.  &  C.) 

^Q     870,  913,  1215,  1237 

Cohen  V.  Pool,'  (N.  J.)  94  Atl.  37 •  •  •  •  •••■  ■  ]f^ 

Colbert  V.  Shepherd,  89  Va.  401,  16  S.  E.  246 205,  217,  1110 

Cole  V.  Killam,  187  Mass.  213,  72  N.  E.  947 91- 

Cole  V.  Shaw,  103  Mich.  505,  61  N.  W.  869 H^ 

Coleman  v.  Applegarth,  68  Md.  21,  11  Atl.  284,  6  A.  S.  E.  417. 

334,  703,  705,  709,  859 

Coleman  v.  Dunton,  99  Me.   121,  58  Atl.  430 1242 

Coleman  v.  Easterling,  93  Ga.  29,  18  S.  E.  819 1^4* 

Coles  V.  Peck,  96  Ind.  333,  49  Am.  Kep.  161 •  •  •  •  •  •  •  •  ^-^ 

Collier  V.  Kobinson,  (Tex.  Civ.  App.),  129  S.  W.  389.  .105,  123,  217,  1245 

Collier  v.  Trow '8  etc.  Co.,  1  N.  Y.  S.  844,  49  Hun.  147 311 

CoUingwood  V.  Row,  3  Jur.  (N.  S.)   785,  5  Wkly.  Rep.  484 517 

CoUins  etc.  Co.  v.  Elk  City  Mercantile  Co.,  (Okl.)   150  P.  457 404 

Collins  V.  Whigham,  58  Ala.  438 118,  515,  871 

Collison  V.  Lettsom,   6   Taunt.   224,   2   Marsh   1,   128   Eng.   Reprint  ^^^ 

1020  ;;;  _„^ 

Colton  V.  Wise,  7  HI.  App.  395 HI'  ^"» 

Colwell  V.  Fulton,  117  Fed.  931 1"° 

Coman  v.  Peters,  52  Wash.  574,  100  P.  1002 1^1 

Commercial  Bank  v.  Weldon,  148  Cal.  601,  84  P.  171 •• 

202,  516,  707,  862,  872 

Comstock  V.  Lager,  78  Mo.  App.  390 '''"'^of,l 

Comstock  Bros.  v.  North,  88  Miss.  754,  41  So.  374 104,  122,  313 

Condon  V.  Maynard,  71  Md.  601,  18  Atl.  957 ..^...•-    121 

Cone  V.  Cone,  118  Iowa  458,  92  N.  W.  665 108,  331,  333 

Congregation  v.  Church,  10  Abb.  Pr.  (N.  S.)  484,  (N.  Y.) 1116 

Congregation  etc.  v.  Gerbert,  57  N.  J.  L.  395,  31  Atl.  383 852 

Conn  V.  Tonner,  86  Iowa  577,  53  N.  W.  320 510 

Connecticut  Mut.  Life  Ins.  Co.  v.  Westerhoff,  58  Neb.  379,  78  N.  W. 

724,  79  N.  W.  731,  76  A.  S.  R.  101 120 

Connely  t.  Haggarty,  68  N.  J.  Eq.  794,  64  Atl.  1133 933 

Conner  v.  Clapp,  37  Wash.  299,  79  P.  929 123,  710 

Conner  v.  Clapp,  42  Wash.  642,  85  P.  342 115,  1-34 


726  LAW   OF    OPTION    CONTRACTS 

Sections 
Connersville  Wagon  Co.  v.   McFarlan  Carriage  Co.,   166   Ind.   123, 

76  N.  E.  294 403,  1119 

Connolly  v.  Keenan,  87  N.  Y.  S.  630,  42  Misc.  Eep.  589.  .  .869,  931,  1002 

Connor  v.  City  of  Marshfield,  128  Wis.  280,  107  N.  W.  639 102,  116 

Connor  v.  Reimeker,  25  S.  C.  514 301,  703,  705,  871 

Connor  v.  Withers,  20  Ky.  L.  Rep.   1326,  49  S.  W.  309 

602,  605,  607,  804 

Consolidated  Coal  Co.  v.  Findley,  128  Iowa  696,  105  N.  W.  206 

847,  909,  1002,  1004,  1008 

Continental  Gin  Co.  v.  Sullivan,   (Okl.)    150  P.  209 828 

Conway  v.  Hart,  129  Cal.  480,  62  P.  44 107,  115,  122,  1123 

Cook  V.  Jones,  96  Ky.  283,  28  S.  W.  960,  16  Ky.  L.  Rep.  469 

607,  804,  869 

Cooke  V.  Oxley,  3  T.  R.  653,  100  Eng.  Reprint  785 704,  1219 

Cooley  V.  Lobdell,  153  N.  Y.  596,  47  N.  E.  783 406 

Cooper  V.  Bay  State  Gas  Co.,  127  Fed.  482 108 

Cooper  V.  Colson,  66  N.  J.  Eq.  328,  58  Atl.  337,  105  A.  S.  R.  660.  .  .1207 

Cooper  V.  Joy,  105  Mich.  374,  63  N.  W.  414 835 

Cooper  V.  Lansing  Wheel  Co.,  94  Mich.  272,  54  N.  W.  39,  34  A.  S.  R. 

341 306,  307,  311,  704,  871,  1219 

Cooper  V.  Pena,  21  Cal.  404 1218,  1226 

Cooper's  Estate,  In  re,  150  Pa.  576,  24  Atl.  1057,  30  A.  S.  R.  829. .  .   222 

Copp  V.  Longstreet,  5  Colo.  App.  282,  38  P.  601 801,  806a,  871 

Copple  V.  Aigeltinger,  167  Cal.  706,  140  P.  1073 

301,  322,  323,  407,  415,  501,  515,  703,  1237 

Corbett  v.  Cronkhite,  239  HI.  9,  87  N.  E.  874 

313,  332,  703,  1203,  1205,  1227 

Corcoran  v.  White,  117  HI.  118,  7  N.  E.  525,  57  Am.  Rep.  858 

838,  841,  843 

Corey  v.  Woodin,  195  Mass.  464,  81  N.  E.  260 712 

Corrigan  v.  Sammis,  120  N.  Y.  S.  69 119 

Corson  v.  Mulvany,  49  Pa.  88,  88  Am.  Dee.  485 

801,  871,  1215,  1233,  1236 

Cortelyou  v.  Barnsdall,  236  111.  138,  86  N.  E.  200 105,  113,  309,  703 

Costello  V.  Friedman,  8  Ariz.  215,  71  P.  935 1238,  1241 

Cothran  v.  Witham,  123  Ga.  190,  51  S.  E.  285 315 

Couch  V.  Crane,  142  Ga.  22,  82  S.  E.  459 609 

Couch  V.  McCoy,  138  Fed.  696 

102,  208,  209,  301,  703,  838,  871,  917,  1234 

Couchmans  y.  Boyd,   24  Ky.  395 903 

Cousins,  Re  Alexander  v.  Cross,  L.  R.  30  Ch.  Div.  203 606 

Coxe  V.  Anoka  W.  E.  L.  &  P.  Co.,  87  Minn.  56,  91  N.  W.  265 1119 

Coy  V.  Minn.  &  St.  L.  R.  R.  Co.,  116  Iowa  558,  90  N.  W.  344 912 

Coy  V.  Title  G.  &  T.  Co.,  198  Fed.  275 803 

Coyle  V.  Kierski,  (Del.  Ch.)   89  Atl.  598 862,  913,  920 

Cragin  v.  O 'Coimell,  63  N.  Y.  S.  1071,  50  App.  Div.  339,  affd.  169 

N.  Y.  573,  61  N.  E.  1128 108 


TABLE   OF    CASES  12  i 

Sections 

Craig  T.  Harper,  3  Cush.   (Mass.)    158 706 

Cram  v.  Long,  154  Wis.  13,  142  N.  W.  267 703 

Cramer  v.  Mooney,  59  N.  J.  Eq.  164,  44  Atl.  625 

608,  857,  914,   1006,  1208 

Cranclall  v.  Willig,  166  ni.  233,  46  N.  E.  755 

331,  332,  602,  913,  917,  1002,  1205,  1224,  1227 

Crane  v.  Powell,  139  N.  Y.  379,  34  N.  E.  911 419 

Cranston  v.  Smith,  6  R.  I.  231 419 

Crawford  v.  Cathey,   (Ga.)   85  S.  E.  127 113 

Crawford  v.  Toogood,  L.  R.  13  Ch.  Div.  153 862,  870,  920 

Creeey  v.  Grief,  108  Va.  320,  61  S.  E.  769 1214 

Crinkley  v.  Egerton,  113  N.  C.  444,  18  S.  E.  669 113 

Crist  V.  Kleber,  79  Pa.  290 113 

Crocker  v.  Gullifer,  44  Me.  491,  69  Am.  Dec.  118 Ill 

Crofton  V.  Ormsby,  2  Sch.  &  Lef.  583 515 

Crosby  v.  Georgia  Realty  Co.,  138  Ga.  746,  76  S.  E.  38 1251 

Cross  V.  Snakenberg,  126  Iowa  636,  102  N.  W.  508 506 

Crossmore  v.  Page,  73  Cal.  213,  14  P.  787 121 

Crowell  V.  Ewing,  4  Cal.  App.  358,  88  P.  285 205,  402,  506 

Crowl  V.  Goodenberger,  112  Mich.  683,  71  N.  W.  485 854 

Crowley  v.  Byrne,  71  Wash.  444,  129  P.  113 

501,  503,  514,  515,   1124,   1242 

Crystal  Lake  Cemetery  Ass'n  v.  Farnham,  129  Minn.  1,  151  N.  W. 

418 321,  717 

Cuff  V.  Penn,  1  Maule  &  S.  21 409 

Cumberledge  v.  Brooks,  235  111.  249,  85  N.  E.  197 928 

Cummings  v.  Nielson,  42  Utah  157,  129  P.  619 103,  108,  122, 

211,  215,  222,  710,  825,  855,  856,  868,  924,  928,  934,  1209,  1238,  1244 
Cummings  v.  Town  of  Lake  Realty  Co.,  86  Wis.  382,  57  N.  W.  43 .  . 

123,  707,  848,  871,  1115 

Cummins  t.  Beavers,  103  Va.  230,  48  S.  E.  891,  106  A.  S.  R.  881, 

1   Ann.   Cas.  986 

215,  217,  301,  303,  326,  334,  411,  516,   703,  860,   1204,   1223,   1242 

Cunningham  v.  Blanchard,  85  Vt.  494,  83  Atl.  469 419 

Cuppy  v.  Allen,  176  111.  162,  52  N.  E.  61 1253 

Curran  v.  Holyoke  Water  Power  Co.,  116  Mass.  '90 1204 

Curran  v.  Houston,  201  HI.  442,  66  N.  E.  228 120,  913 

Curran  v.  Rogers,  35   Mich.   221 827 

Currier  y.  Howard,  80  Mass.  511 12^0 

Curry  v.  Colburn,  99  Wis.  319,  74  N.  W.  778 123 

Curtin  v.  Ingle,   137  Cal.  95,  69  P.  836 123 

Curtin  v.  Ingle,  143  Cal.  354,  77  P.  74 508 

Curtis  L.  &  L.  Co.  v.  Interior  L.  Co.,  137  Wis.  341,  118  N.  W.  853.  .  847 
Curtis  V.  Sexton,  142  Mo.  App.  179,  125  S.  W.  806.  .  .702,  820,  841,  1002 

Cusack  V.  Gunning  System,  109  HI.  App.  588 820,  868 

Cuthill  T.  Peabody,  19  Cal.  App.  304,  125  P.  926.  .1101,  1105,  1119,  1120 


728  LAW   OF    OPTION    CONTRACTS 

(Sec  (tons 

Cutsinger  v.  Ballard,  115  Ind.  93,  17  N.  E.  206 1253 

Cutting  V,  Dana,  25  N.  J.  Eq.  265 305,  817,  1231 


D 

Dady  v.  Condit,  209  111.  488,  70  N.  E.  1088 1118 

Dailey  Co.  v.  Clark  Can  Co.,  128  Mich.  591,  87  N.  W.  761 311 

DaOy  V.  Litchfield,  10  Mich.  29 1240 

Dal  V.  Fischer,  20  S.  D.  426,  107  N.  W.  534 215,  1118 

Dambmann  \.  Lorentz,  70  Md.  380,  17  Atl.  389,  14  A.  S.  R.  364 

215,  1102,  1214,  1228 

Daniels  v.  Davison,  16  Ves.  Jun.  249 515,  607 

Daniels  v.  Morris,  65  Ore.  289,  132  P.  958 1119 

Daniels  v.  Rogers,  108  App.  Div.  338,  96  N.  Y.  S.  624 412 

Daniels  v.  Straw,   53   Fed.   327 802 

Darling  v.  Hoban,  53  Mich.  599,  19  N.  W.  545 835,  852 

Darr  v.  Mummert,  57  Neb.  378,  77  N.  W.  767 105,  1103 

Darragh  v.  Vicknair,  126  La.  171,  52  So.  264 710,  1102,  1109 

Davenport  v.  Corbett,  98  N.  Y.  S.  403,  112  App.  Div.  382 114 

Davenport  v.  Latimer,  53  S.  C.  563,  31  S.  E.  630 1204 

Davis  V.  Barada-Ghio.  R.  E.  Co.,  115  Mo.  App.  327,  92  S.  W.  113.  .  .    919 

Davis  V.  Eames,  (Cal.)  35  P.  566 716,  1103,  1104 

Davis  V.  Isenstein,  257  Dl.  260,  100  N.  E.  940 109,  1236 

Davis  V.  Petty,  147  Mo.  374,  48  S.  W.  944 301,  710,  1203,  1250 

Davis  V.  Pfeiffer,  213  111.  249,  72  N.  E.  718 805 

Davis  V.  Riddle,  25  Colo.  App.  162,  136  P.  551 113,  311,  703,  1124 

Davis  V.  Robert,  89  Ala.  402,  8  So.  114,  18  A.  S.  R.  126 

108,  407,  931,  932,  1215 

Davis  V.  Shaw,  21   Ont.  L.   Rep.  474,   15  Ont.  Wkly.  Rep.   134,   16 

Ont.  Wkly.  Rep.  273 320,  332,  703,  705 

Davis  V.  Thomas,  1  Russ  &  M.  506,  39  Eng.  Reprint  195 862 

Davis  V.  Watson,  89  Mo.  App.   15 1116 

Davis  V.  Wilson,  55  Ore.  403,  106  P.  795 110 

Dawson  v.  Dawson,  8  Sim.  346,  59  Eng.  Reprint  137 916 

Deakin  v.  Underwood,  37  Minn.  98,  33  N.  W.  318,  5  A.  S.  R.  827 806a 

Deering  v.  Austin,  34  Vt.  330 507 

DeFord  v.  Hyde,  10  S.  D.  386,  73  N.  W.  265 1244 

Degginger  v.  Martin,  48  Wash.  1,  92  P.  674 903 

DeGrasse  v.  Verona  Min.  Co.,  (Mich.)   152  N.  W.  242 1002 

Deitz  V.  Stephenson,  51  Ore.  596,  95  P.  803 901,  906,  1244 

DeJonge  v.  Hunt,  103  Mich.  94,  61  N.  W.  341 904 

DeLano  v.  Sayior,  (Ky.)  113  S.  W.  888 1007,  1109 

Delashman  v.  Berry,  20  Mich.  292,  4  Am.  Rep.  392 834 

Delaware  Trust  Co.  v.  Cahn,  195  N.  Y.  231,  88  N.  E.  53 

1*12,  871,  1003,  1120 

Dengler  v.  Fowler,  94  Neb.  621,  143  N.  W.  944 321,  515,  1254 


TABLE    OF    CASES  729 

Sections 

Dennison  v.  Barney,  40  Colo.  442,  113  P.  519 419 

DeRutte  v.   Muldrow,  16  Cal.  505 204,  211,  215,  1123,  1215,  122(3 

Dctlor  V.  Holland,  57  Ohio  St.  492,  49  N.  E.  690,  40  L.  R.  A.  266.  .  .  811 
Devitt  V.  Kaufman  County,  27  Tex.  Civ.  App.  332,  66  S.  W.  224.  .  . 

123,  124,  708 

Dewey  v.  Spring  Valley  Land  Co.,  98  Wis.  83,  73  N.  W.  565 1253 

Dice  V.  Irvin,  110  Ind.  561,  11  N.  E.  488 119 

Dicken  v.  McKinlay,  163  HI.  318,  45  N.  E.  134,  54  A.  S.  R.  471 419 

Dickey  v.  Coffeyville  etc.  Co.,  69  Kan.  106,  76  P.  398 328 

Diekey  v.  Winston  Cigarette  Mach.  Co.,  117  Ga.  131,  43  S.  E.  493.  . 

830,  858 

Dickinson  v.  Dodds,  L.  R.  2  Ch.  Div.  463,  34  L.  T.  (N.  S.)  607 

104,  415,  517,  703,  705,  709 

Dike  V.  Greene,   4   R.   I.   285 1212 

Dillinger  v.  Ogden,  244  Pa.  20,  90  Atl.  446,  Ann.  Cas.  1915C,  533.  . 

105,  1005,  1242 

Disborough  v.  Neilson,  3  Johns.  Cas.  (N.  Y.)  81 118 

Dittrich  v.  Gobey,  119  Cal.  599,  51  P.  962 118 

Dix  V.  Atkins,  130  Mass.  171 836 

Dixon  V.  Dixon,  92  Md.  432,  48  Atl.  152 1244 

Doar  V.  Gibbes,  1  Bailey  Eq.  (S.  C.)  371 412 

Dockery  v.  Thome,  (Tex.  Civ.  App.)   135  S.  W.  593 417,  835 

Doddridge  etc.  Co.  v.  Smith,  154  Fed.  970 607 

Doepfner  v.  Bowers,  106  N.  Y.  S.  932 867 

Doherty  v.  Dolan,  65  Me.  87,  20  Am.  Rep.  677 1118 

Doll  V.  Noble,  116  N.  Y.  230,  22  N.  E.  406,  5  L.  R.  A.  554,  15  A. 

S.  R.  398 117 

Donahue  v.  Potter  &  George  Co.,  63  Neb.  128,  88  N.  W.  171 

703,   871,   1224,   1230 

Donalson  v.  Thomason,  137  Ga.  848,  74  S.  E.  762 515 

Donnally  v.  Parker,  5  W.  Va.  301 514,  515,  1202,  1234 

Donohue  v.  McNichol,  61  Pa.  73 220 

Donovan  v.  Schoenhofen  Brewing  Co.,  92  Mo.  App.  341 404 

Doolittle  V.  Dininny,  31  N.  Y.  350 405 

Doolittle  V.  Nurnberg,  27  N.  D.  521,  147  N.  W.  400 121 

Dopp  V.  Richards,  43  Utah  332,  135  P.  98 1116 

Doran,  Brouse  &  Price  v.  Bunker  Hill  Oil  Min.  Co.,  23  Cal.  App. 

644,   139   P.   93 1008 

Dore  V.  Southern  Pacific  Co.,  163  Cal.  182,  124  P.  817 1212 

Douglas  V.  Aurora  Daily  News  Co.,  160  HI.  App.  506 215 

Douglas  V.  Hanbury,  56  Wash.  63,   104  P.   1110 931 

Dowd  V.  Clarke,  54  Cal.  48 912.  930 

Dowdney  v.  McCullom,  59  N.  Y.  367 1244 

Dowling  v.  Bergin,  47  Mich.  188,  10  N.  W.  194 1204 

Doying  v.  Chesebrough,  (N.  J.)  36  Atl.  893 115 

Draper  v.  Moore,  2  Cin.  R.   (Ohio)   167 SOfia 

Drown  v.  Ingels,  3  Wash.  424,  28  P.  759 904 


730  LAW   OF   OPTION    CONTRACTS 

Sections 

Dudley  v.  Bachelder,   53    Me.    403 419 

Dudley  A.  Tyng  &  Co.  v.  Woodward,  121  Md.  422,  88  Atl.  243 1119 

Duffy  V.  Kelly,  55  N.  J.  Eq.  627,  37  Atl.  597 1213 

Dugan  V.  Kelly,  75  Ark.  55,  86  S.  W.  831 123 

Dunlop  V.  Mercer,  156  Fed.  545,  86  C.  C.  A.  435 116 

Dunn  V.  Bell,  85  Tenn.  581,  4  S.  W.  41 216 

Dunn  V.  Mills,  70  Kan.  656,  79  P.  146,  502,  3  Ann.  Cas.  363 1116 

Dunnaway  v.  Day,  163  Mo.  415,  63  S.  W.  731 115,  502,  862 

Dunncll  v.  Keteltas,  16  Abb.  Pr.   (N.  Y.)  205 1212 

Dunshee  v.  Geoghegan,  7  Utah  113,  25  P.  731 1118 

Dupuy  V.  Williams,  152  Dl.  102,  37  N.  E.  48 822 

Durant  v.  Comegys,  3  Idaho  204,  28  P.  425 920,  923 

Duvall  V.  Myers,  2  Md.  Ch.  401 1215 

Dwiggins  v.  Clark,  94  Ind.  49,  48  Am.  Eep.  140 1119 

Dwight  V.  Germania  L.  Ins.  Co.,  103  N.  Y.  341,  8  N.  E.  654,  27 

Am.  E«p.  729 122 

Dyer  v.  Duffy,  39  W.  Va.  148,  19  S.  E.  540,  24  L.  R.  A.  339 

103,  204,  602,  610,  707,  862,  1250 


E 

Eagle  V.  Pettus,  109  Ark.  310,  159  S.  W.  1116 412,  710,  1208 

Eastman  v.  Dunn,  34  E.  I.  416,  83  Atl.  1057 

405,  414,  415,  816,  817,  1115,  1122 

Easton  v.  Thatcher,  7  Utah  99,  25  P.  728 123,  214,  406 

Eaton  V.  Whitaker,  18  Conn.  222,  44  Am.  Dec.  586 418 

Eaton  V.  Wilkins,  163  Cal.  742,  127  P.  71 214,  406 

Eaves  v.  Vial,  98  Va.   134,  34  S.  E.  978 123,  419 

Eaves  &  Collins  v.  Iron  Co.,  73  Ga.  459 856,  857 

Ebert  v.  Arends,  190  111.  221,  60  N.  E.  211 933 

Echternach  t.  Moncrief,  94  Kan.  754,  147  P.  860 1119 

Eclipse  Oil  Co.  v.  South  Penn  Oil  Co.,  47  W.  Va.  84,  34  S.  E.  923.  . 

303,  309,  332,  705,  708,  1236 

Edmonds  v.  Millet,  20  Beav.  54,  52  Eng.  Eeprint  522 1212 

Edwards  v.  Capps,  122  Ga.  827,  50  S.  E.  943 108 

Edwards  v.  West,  7  Ch.  Div.  858,  47  L.  J.  Ch.  463,  38  L.  T.  Eep. 

(N.  S.)  481,  26  Wkly.  Eep.  507 512,  517 

Edward  Thompson  Co.  v.  Murphine,  79  Wash.  672,  140  P.  1073 1119 

Egger  v.  Nesbit,  122  Mo.  667,  27  S.  W.  385,  43  A.  S.  E.  596 904 

Eggert  V.  Pratt,  126  Iowa  727,  102  N.  W.  786 1118 

Eggleston  v.  Wagner,  46  Mich.  610,  10  N.  W.  37 

123,  406,  520,  840,  859 

E.  H.  Stanton  Co.  v.  Eochester  etc.  Agency,  206  Fed.  978 122 

Eichbaum  v.  Sample,  213  Pa.  216,  62  Atl.  837 1210 

Eislei  V.  Marshall,  230  Pa.  208,  79  Atl.  496 811 

Eisner  v.  Pringle  Mem.  Home,  115  N.  Y.  S.  58,  130  App.  Div.  559.  .1244 


TABLE  OF   CASES  731 

SectioTis 

Elberton  Hd^r.  Co.  v.  Hawes,  122  Ga.  858,  50  S.  E.  964 213,  1212 

Eliason  t.  Henshaw,  4  Wheat.   (U.  S.)  225 820,  840 

Ellet  V.  Paxson,  2  Watts  &  S.   (Pa.)   418 1117 

Elliott  V.  DeLaney,  217  Mo.  14,  116  S.  W.  494 

102,  107,  215,  224,  301,  321,  609,  856 

Ellis  V.  Bryant,  120  Ga.  890,  48  S.  E.  352 108,  407,  416,  862,  920 

Ellis  V.  Miller,  164  N.  Y.  434,  58  N.  E.  516 1119 

Ellsworth  V.  So.  Min.  R.  Ex.  Co.,  31  Minn.  543,  18  N.  W.  822 

105,  310,  703,  705,  827 

Elmer  v.  Hart,  121  La.  537,  46  So.  619 838,  842 

Elmore  Quillian  &  Co.  v.  Parish  Bros.,  170  Ala.  499,  54  So.  203 210 

Elston  V.  SchiUing,  42  N.  Y.  79 124,  708,  855 

Ely  V.  Beaumont,  5  S.  &  R.   (Pa.)   124 501,  509,  862 

Emerson  v.  Fleming,  246  HI.  353,  92  N.  E.  890 908,  933 

Emerson  v.  Slater,   (U.  S.)   22  How.  28,  16  L.  Ed.  360 410 

Emery  v.  HiU,  67  N.  H.  330,  39  Atl.  266 802 

Emuss  V.  Smith,  2  DeG.  &  Sm.  722,  64  Eng.  Reprint  323 517 

Engell  V.  Fitch,  L.  R.  4  Q.  B.  659,  38  N.  J.  Q.  B.  304,  17  Wkly. 

R€p.    894 1118 

English  V.  Murtland,  214  Pa.  325,  63  Atl.  882,  112  A.  S.  R.  747,  6 

Ann.  Cas.  339 831,  835 

Ensworth  v.  Griffiths,  5  Bro.  P.  C.  184,  2  Eng.  Reprint  615 115 

Eskridge  v.  Glover,  (Ala.)  5  Stew.  &  P.  264,  26  Am.  Dec.  344 703 

Esslinger  v.  Pascoe,  129  Iowa  86,  105  N.  W.  362,  3  L.  R.  A.  (N.  S.) 

147 401,  402 

Estes  V.  Furlong,  59  HI.  298 213,  322,  862,  1213,  1227,  1237 

Evans  v.  Graham,  50  Wis.  450,  7  N.  W.  380 119 

Evans  v.  Napier,  111  Ga.  102,  36  S.  E.  426 113,  408 

Eveleth  v.  Sawyer,  96  Me.  227,  52  Atl.  639 805,  811 

Evrit  V.  Bancroft,  22  Ohio  St.  172 1117 

Ewing  V.  Miles,  12  Tex.  Civ.  App.  19,  33  S.  W.  235 708,  831,  833 

Ewing  V.  Stanley,  24  Ky.  L.  Rep.  633,  69  S.  W.  724 408 

Ewing  T.  Wightman,  167  N.  Y,  107,  60  K  E,  322 1116 

F 

FairehUd  v.  City  &  County  Contract  Co.,  138  N.  Y.  S.  133,  153  App. 

Div.    277 404 

Pales  V.  McKeon,  2  Hilt.   (N.  Y.)   53 123 

Falley  v,  Giles,  29  Ind.  114 834 

Faraday  Coal  Co.  v.  Owens,  26  Ky.  L.  Rep.  243,  80  S.  W.  1171 

114,  207,  516,  1243 

Farmers'  &  M.  Bank  v.  Daiker,  153  Iowa  484,  133  N.  W.  705 121 

Farmers'   Produce   Co.   v.    McAlester   Storage   &   Com.   Co.,    (Okl.) 

150  P.  483 818 


732  LAW   OF    OPTION    CONTRACTS 

Sections 
Farmington  Village  Corp.  v.  Farmington   W.   Co.,   93   Me.   192,  44 

Atl.  609 116,  851,  1212 

Farnsworth  v.  Hoover,  66  Ark.  367,  50  S.  W.  865 121 

Farwell  v.  Lowther,  18  HI.  252 415 

Faucett  v.  Northern  Clay  Co.,  84  Wash.  382,  146  P.  857 213 

Faulkner  v.  Hebard,  26  Vt.  452 301 

Favorite  Carriage  Co.  v.  Walsh,  71  Minn.  292,  74  N.  W.  137.  ..823,  824 

Fay  v.  Wheeler,  44  Vt.  292 403,  418 

Federal  Oil  Co.  v.  Western  Oil  Co.,   112  Fed.   373,  affd.   121   Fed. 

674,  57  C.  C.  A.  428 309,  321,  326,  330,  1204,  1211,  1236 

Feeney   v.   Howard,   79   Cal.   525,   21   P.   984,   4   L.   R.   A.   826,   12 

A.   S.  R.   162 419 

Feldmeyer  v.  Werntz,  119  Md.  285,  86  Atl.  986 836 

Felton  v.  Chellis,  81  Vt.  10,  69  Atl.  149 861 

Ferguson  V.  Jackson,   180  Mass.  557,  62  N.  E.  965 832 

Ferguson  v.  MeCowan,  124  Ga.  669,  52  S.  E.  886 214 

Ferguson  v.  West  Coast  Shingle  Co.,  96  Ark.  27,  130  S.  W.  527...   849 

Fessler  's  Appeal,   In  re,  75  Pa.  483 871 

Feudtner  v.  Ross,  74  N.  J.  Eq.  214,  69  Atl.  190 115,  321 

Field  V.  Small,  17  Colo.  386,  30  P.  1034 205 

Finch  V.  Underwood,  L.  R.  2  Ch.  Div.  310,  16  Eng.  Rul.  Cas.  15.  .716,  806 

Findley's  Ex'rs  v.  Findley,  11  Grat.  (Va.)  434 122 

Fink  V.  Hough,   (Tex.  Civ.  App.)   153  S.  W.  676 822,  908 

Finlen  v.  Heinze,  28  Mont.  548,  73  P.  123 1244,  1253 

Finlen  v.  Heinze,   32   Mont.   354,   80   P.   918 

909,  930,  1207,  1208,  1237,  1244 

Finlon  v.  National  Union  Fire  Ins.  Co.,  65  Ore.  493,  132  P.  712 511 

Finn  v.  Bowden,  66  Fla.  41,  63  So.  139 849,  1204 

Finnerty  v.   Fritz,  5  Colo.   174 205 

First  M.  E.  Church  v.  North,  92  Kan.  381,  140  P.  888 1122 

First  National  Bank  v.  Agnew,  45  Wis.  131 1116 

First  National  Bank  v.  Bynum,  84  N.  C.  24,  37  Am.  Rep.  604 120 

First  National  Bank  v.  Corporation   See.   Co.,   128   Minn.   341,    150 

N.  W.  1084 1210,  1230,  1237 

First  National  Bank  v.  Oskaloosa    Packing    Co.,    66    Iowa    41,    23 

N.  W.  255 216 

First  National  Bank  v.  Park,  37  Colo.  303,  86  P.  106 120 

First  National  Bank  v.  Peck,    8    Kan.    660 120 

First  National  Bank  v.  Watkins,  154  Mass.  385,  28  N.  E.  275 814 

Fisher  v.  WUson,   18   Ind.    133 405 

Fitch  V.  Willard,  73  111.  92 1250 

Fitz  Gerald  v.  City  of  Big  Rapids,  123  Mich.  281,  82  N.  W.  56 222 

Fitzpatrick  v.  Woodruff,  96  N.  Y.  561 403,  856,  858 

Fitzsimmons  v.  Lindsay,  205  Pa.  79,  54  Atl.  488 21.5,  224,  1212 

Flagg  v.  Baldwin,  38  N.  J.  Eq.  219,  48  Am.  Rep.  308 216 

Flagg  V.  Gilpin,  17  R.  I.  10,  19  Atl.  1084 216 

Fleet  V.  Hertz,  201  HI.  594,  66  N.  E.  858,  94  A.  S.  R.  192 508 


TABLE  OF   CASES  733 

Sections 

Fletcher  ▼.  Dangherty,  13  Neb.  224,  13  N.  W.  207 120 

Fletcher  v.  Dennison,  101  Cal.  292,  35  P.  868 121 

Fletcher  v.  Painter,  81  Kan.  195,   105  P.  500 123,  207,  602,  869 

Florida  Yacht  Club  v.  Renfroe,  67  Fla.  154,  64  So.  742 1005,  1212 

Floyd  V.  Storrs,  144  Mass.  56,  10  N.  E.  743 116,  807 

Flyun  V.  Bachner,  168  Mich.  424,  134  N.  W.  451,  Ann.  Cas.  1913C, 

641    834 

Flynn  v.  McKeon,  6  Duer.  203 410 

Flynn  t.  White  Breast  Coal  Co.,  72  Iowa  738,  32  N.  W.  471 

514,  520,  1003 

Fogg  V.  Price,  145  Mass.  513,  14  N.  E.  741 210,  212,  406 

Folsom  V.  Harr,  218  El.  369,  75  N.  E.  987,  109  A.  S.  R.  297 212 

Forbes  v.  Connolly,  5  Grant.  Ch.   (U.  C.)   657 716,  1248 

Ford  V.  Lawson,  133  Ga.  237,  65  S.  E.  444 1251 

Forgey  v.  Gilbirds,  262  Mo.  44,  170  S.  W.  1135 1204,  1238 

Forthman  v.  Deters,  206  HI.  159,  69  N.  E.  97,  99  A.  S.  R.  145 1253 

Foster  v.  City  of  Boston,  22  Pick.  33    (Mass.) 838 

Foster  v.  New  York   T.   L.   Co.,   2   Tex.   Civ.   App.   505,   22   S.   W. 

260 415,  416 

Four  Oil  Co.  v.  United  Oil  Producers,  145  Cal.  623,  79  P.  366,  68 

L.  R.  A.  226 838,  841 

Fowle  V.  Freeman,  9  Ves.  351 1222 

Fowler  v.  Fowler,  204  Dl.  82,  68  N.  E.  414 419 

Fowler  Utilities  Co.  v.  Gray,  168  Ind.  1,  79  N.  E.  897 1228 

Fox  V.  Denargo  Land  Co.,  37  Colo.  203,  86  P.  344 205 

Fox  V.  Hawkins,    135   N.   Y.    S.   245 415 

Frank  v.  Schnuettgen,   187  Fed.  515,  109  C.  C.  A.  281 

217,   301,   1234.   1244 

Frank  v.  Stratford-Handcock,  13  Wyo.  37,  77  P.  134,  110  A.  S.  R.  963, 

67  L.  R.  A.  571...  102,  103,  124,  301,  321,  513,  515,  703,  704, 

705,  716,  810,  868,  871,  872,  903,  1124,  1224,  1234,  1237,  1242,  1254 

FrankUn  etc.  Co.  v.  Card,  84  Me.  528,  24  Atl.  960 860,  1125 

Fred  Gorder  &  Son  v.  Pankonin,  83  Neb.  204,  119  N.  W.  449 

214,  807,  1210,  1241 

Freeman  v.  Stokes,   12  Phila.    (Pa.)    219 1237 

Fremont  Carriage   Mfg.   Co.  v.   Thomsen,   65   Neb.   370,   91   N.   W. 

376 215,  411,  418 

French  v.  Poole,  83  Kan.  281,  111  P.  488 120 

Prey  v.  Camp,  131  Iowa  109,  107  N.  W.  1106 849,  862 

Frey-Sheckler  Co.  v.  Iowa  Brick  Co.,  104  Iowa  494,  73  N.  W.  1051.  .  830 
Friary,   Holyrod  etc.  Breweries  v.   Singleton,   2   Ch.   261,   28  L.  J. 

Ch.  622,  81  L.  T.   (N.  S.)    101,  47  Wkly.  Rep.  662 802 

Prick's   Appeal,    101   Pa.   485 503 

Friend  v.  Pentingill,   116   Mass.  515 402 

Friendly  v.  Elwert,  57  Ore.  599,  105  P.  404,  112  P.  1085,  Ann.  Cas. 

1913A,   357 109,  323,  415,  841,  847,  871,  1005,  1007,  1109 

Fritz  V.  Mills,    (Cal.)    150  P.   375 406 


734  I-AW   OF    OPTION    CONTRACTS 

Sectionn 

Frue  V.  Houghton,  6  Colo.  318 1236,  1237 

Frye-Bruhn  Co.  v.  McGowan,  38  Wash.  536,  80  P.  761 603,  609 

Fulgham  v.  Morris,  75  Ala.  245 119 

Fullenwider  v.  Eowan,  136  Ala.  287,  34  So.  975 108,  861,  1003 

Fuller  V.  Artman,  69  Hun.  546,  2  N.  Y.  S.   13,  53  N.  Y.  St.  Rep. 

339 331,  332,  703 

Fulton  V.  Messenger,  61  W.  Va.  477,  56  S.  E.  830 

102,  103,  334,  602,  605,  837,  841,  849,  860,  871,  1008,  1234 

Furst  Bros.  v.  Com.  Bank  of  Augusta,  117  Ga.  472,  43  S.  E.  728.  ..  508 
F.  W.  Stock  &  Sons  v.  Snell,  213  Mass.  449,  100  N.  E.  830 1119 


G 

Gaar  v.  First  Nat'l  Bank  of  Centralia,  20  HI.  App.  611 119 

Gachet  v.  Morton,  181  Ala.  179,  61  So.  817 419 

Gaines  v.  Chew,   167  Fed.   630 516,  920 

Gale  V.  Harp,  64  Ark.  462,  43  S.  W.  144 419 

Gale  V.  Nixon,  6  Cow.  (N.  Y.)   445 417 

Gallup  V.  Sterling,  22  Misc.  Rep.  672,  49  N.  Y.  S.  942 109 

Gamble  v.  Garloek,  116  Minn.  59,  133  N.  W.  175 1247 

Ganss  v.  Company,  110  N.  Y.  S.  176,  125  App.  Div.  760 313,  703 

Gantt  &  Lee  v.  Mechin,  30   Mo.   App.   532 1003 

Garcia  v.  Callender,  125  N.  Y.  307,  26  N.  E.  283 211 

Garcin  v.  Pennsylvania  Furnace  Co.,  186  Mass.  405,  71  N.  E.  793.  .  .1111 

Gard  v.  Thompson,  21  Idaho  485,  123  P.  497 107,  122,  708 

Garney,  v.  Berkley,  56  Wash.  24,  104  P.  1108 912 

Garrard  v.  Dollar,  49  N.  C.  175,  67  Am.  Dec.  271 1116 

Garsed  v.  Sternberger,  135  N.  C.  501,  47  S.  E.  603 216 

Gathright  v.  H.  M.  Byllesby  &  Co.,  154  Ky.  106,  157  S.  W.  45 

202,  710,  859 

Gavin  v.  Matthews,  152  N.  C.  195,  67  S.  E.  478 119 

Gaylord  v.  McCoy,  158  N.  C.  325,  74  S.  E.  321 123,  214 

Gaylord  v.  McCoy,  161  N.  C.  685,  77  S.  E.  959 

703,  912,  917,  923,  927,  930 

Gehl  V.  Milwaukee  Produce  Co.,  116  Wis.  263,  93  N.  W.  26 1119 

Geiger  v.  Green,  4  Gill.    (Md.)    472 1101,  1103,  1126,  1235 

Gelston  v.  Sigmund,  27  Md.  334 1126,   1235 

Genevetz  v.  Feiering,  121  N.  Y.  S.  392,  136  App.  Div.  736 804 

Gentry  v.  Gentry,  33  Tenn.  87,  60  Am.  Dec.  137 805,  902 

George  Gunther  Jr.  Brew.  Co.  v.  Brywczynski,  107  Md.  696,  69  Atl. 

514 1204,  1253 

George  J.  Birkel  Co.  v.  Howze,  12  Cal.  App.  645,  108  P.  145 216 

George  J.  Cook  Co.  v.  Hell,  175  HI.  App.  532 1119 

George   Wiedemann  Brewing   Co.   v.   Maxwell,   78   Ohio   St.   54,   84 

N.  E.  595 215,  415,  417,  926,  1212,  1215,  1232 

Gerard-Fillio  Co.  v.  McXair,  68  Wash.  321,  123  P.  462 411 


TABLE   OF    CASES  735 

Sections 

Gerhart  Realty  Co.  v.  Brecht,  109  Mo.  App.  25,  84  S.  W.  216 835 

German  S.  &  L.  Soc.  v.  McLellan,  154  Cal.  710,  99  P.  194 1214 

Germer  v.  Gambill,  140  Ky.  469,  131  S.  W.  268 1253 

Gernert  t.  Lembach,  163  Ala.  413,  50  So.  903 119 

Getman  v.  Getman,  1  Barb.  Ch.  (N.  Y.)  499 402 

Gibbins  v.  Asylum  Dist.,  11  Beav.  1,  17  L,  J.  Ch.  5,  50  Eng.  Reprint 

716 841,  845 

Gibbons  v.  Sherwin,  28  Neb.  146,  44  N.  W.  99 108 

Gibbs  V.  Wbitwell,  164  Mo.  387,  64  S.  W.  110 1207,  1253 

Giering  &  Bentley  v.  Hartford  T.  Seminary,  86  Conn.  208,  84  Atl. 

930    113 

Gilbert  v.  Baxter,  71  Iowa  327,  32  N.  W.  364 904 

Gilbert  v.  Port,  28  Ohio  St.  276 122,  512,  519,  1236 

Giles  V.  Bradley,  2  John.  Cas.  (K  Y.)  253 1105 

Giles  V.  Swift,  170  Mass.  461,  49  N.  E.  737 205 

Gilfallan  v.  Gilfallan,  168  Cal.  23,  141  P.  623 1210 

Gillespie  V.  Edmonston,   11   Humph.    (Tenn.)    553 313,  1219 

Gillis  V.  Arringdale,  135  N.  C.  295,  47  S.  E.  429 217,  1102,  1238 

Gilpin  Co.  Min.  Co.  v.  Drake,  8  Colo.  586,  9  P.  787 1116 

Giuther  v.  Townsend,  114  Md.  122,  78  Atl.  908 1248 

Gira  v.  Harris,  14  S.  D.  537,  86  N.  W.  624 

105,  334,  407,  939,  1206,   1246,  1254 

Glascock  V.  HazeU,  109  N.  C.  145,  13  S.  E.  789 507 

Glass  V.  Hulbert,  102  Mass.  24,  3  Am.  Eep.  418 418 

Glass  V.  Rowe,  103  Mo.  513,  15  S.  W.  334 205 

Globe  Brewing  Co.  v.  Simon,  132  HI.  App.  198 321 

Glock  V.  Howard  &  W.  Colony  Co.,  123  Cal.  1,  55  P.  713,  43  L.  R.  A. 

199,  69  A.  S.  R.  17 1101,   1102,  1116 

Godschalck  v.  Fulmer,  176  HI.  64,  51  N.  E.  853 1253 

Goldberg  v.  Drake,  145  Mich.  50,  108  N.  W.  367 801,  825,  868 

Golden  v.  Cornett,  154  Ky.  438,  157  S.  W.  1076 108 

Gold  Spring  Distilling  Co.  v.  Stitzel  D.  Co.,  150  Ky.  457,  150  S.  W. 

516   107 

Gomez  v.  Gomez,  31  N.  Y.  S.  206,  81  Hun.  566 223 

Goodale  v.  West,  5  Cal.  339 1244 

Goodman  v.  Spurlin,  131  Ga.  588,  62   S.  E.   1029 

301,  513,  703,  1224,  1227 

Goodpaster  v.  Porter,  11  Iowa  161 871,  1116,  1228 

Goodrich  v.  Rogers,  75  Wash.  212,  134  P.  947 419 

Goodson  V.  Vivian  Oil  Co.,  129  La.  955,  57  So.  281 309 

Goodspeed  v.  Wiard  Plow  Co.,  45  Mich.  322,  7  N.  W.  902 415 

Goodwine  v.  Kelley,  33  Ind.  App.  57,  70  N.  E.  832 1116 

Gordon  v.  Darnell,  5  Colo.  302 312,  313,  314,  703,  827,  924,  1226 

Gordon  v.  Swan,  43  Cal,  564 105,  109,  1101,  1102 

Gore  V.  Davis,  124  N.  C.  234,  32  S.  E.  554 120 

Goss  V.  Nugent,  5  B.   &  Aid.  58 409 


736  LAW    OF    OPTION    CONTRACTS 

Sections 
Gottlieb  V.  Rinaldo,  78  Ark.  123,  93  S.  W.  750,  6  L.  R.  A.  (N.  S.) 

273 Ill,   112,   507,  508,   818,  830 

Gould  V.  McCormick,  75  Wash.  61,  134  P.  676,  48  L.  E.  A.  (N.  S.) 

765,  Ann.  Cas.  1915A,  710 117 

Grabenhorst  v.   Nicodemus,   42   Md.   236 107,  303,  322,  703 

Gradle  v.  Warner,   140  111.   123,  29  N.  E.   1118 

415,   706,   715,   847,  912,   1004 

Graham  v,  Herlong,  50  Fla.  521,  39  So.  Ill 1210 

Grand  Kapids  G.  H.  &  M.  Ry.  Co.  v.  Stevens,  143  Mich.  646,   107 

N.   W.   436 1248 

Granger  v.  Riggs,  118  Ga.  164,  44  S.  E.  983 519 

Granger  Real  Estate  Ex.  v.  Anderson,   (Tex.  Civ.  App.)   145  S.  W. 

262    402 

Grant  v.  Collins,  357  Ky.  36,  162  S.  W.  539 831,  834 

Grant  County  Board  of  Control  v.  Allphin,  152  Ky.  280,  153  S.  W. 

417    109 

Graves  v.  Dill,  159  Mass.  74,  34  N.  E.  336 610 

Graves  v.  Graves,  45  N.  H.  323 402 

Graves  v.  Graves,  15  Ir.  Ch.  357 517 

Gray  v.  Davis,   26   Ky.   381 1244 

Gray  v.  Howell,  205  Pa.  211,  54  Atl.  774 1118 

Gray  v.  Maier  &  Zobelein  Brewery,  2  Cal.  App.  653,  84  P.  280 852 

Gray  v.  Meek,  199  Dl.  136,  64  N.  E.  1020 1116 

Gray  v.  Pelton,  67  Ore.  239,  135  P.  755 609 

Graybill  v.  Braugh,  89  Va.  895,  17  S.  E.  558,  37  A.  S.  R.  894,  21 

L.  R.  A.  133 207,  331,  332,  515,  1223,  1243 

Great  Northern  Ry.  Co.  v.  Sheyenne  T.  Co.,  27  N.  D.  256,  145  N.  W, 

1062    117 

Great  Western  Oil  Co.  v.  Carpenter,  43  Tex.  Civ.  App.  229,  95  S.  W. 

57 314,  319 

Green  v.  Hammock,  13  Ky.  L.  Rep.  145,  16  S.  W.  357 402 

Green  v.  Low,  22  Beav.  625,  2  Jur.   (N.  S.)   848,  4  Wkly.  Rep.  669, 

52  Eng.  Reprint   1249 717 

Green  River  Coal  Min.  Co.  v.  BrowH,  140  Ky.  332,  131  S.  W.  13 

871,  1001,  1101,  1204,  1253 

Greenawalt  v.  Este,  40  Kan.  418,  19  P.  803 904 

Greenleaf  v.  Gallagher,  93  Me.  549,  45  Atl.  829,  74  A.  S.  R.  371.  .  .1119 

Greenleaf  v.  Hamilton,  94  Me.   118,  46  Atl.   798 1119 

Gregory  v.  Village  of  Lake  Linden,  130  Mich.  368,  90  N.  W.  29.  .  .    123 

Gregory  v.  Wendell,  39  Mich.  337,  33  Am.  Rep.  390 216 

Grier  v.  Stewart,  (Tex.  Civ.  App.)   136  S.  W.  1176 862,  1244 

Griffin  v.  Barton,  22  Misc.  R.  228,  49  N.  Y.  S.  1021 802 

Griffith  V.  Stewart,  (D.  C.)   31  App.  Cas.  29 517 

Grizwold  v.  Sabin,  51  N.  H.  167,  12  Am.  Rep.  76 1117 

Grizzle  v.  Gaddis,  75  Ga.  350 1253 

Grobe  v.  Doyle,  12  Brit.  Col.  191 506 

Gross  T.  Arnold,  177  HI.  575,  52  N.  E.  867 706,  809 


TABLE   OF    CASES  737 

Sections 
Grover  v.  Buck,  34  Mich.  519 401 

Gruminer  v.  Price,  101  Ark.  611,  143  S.  W.  95..  113,  519,  861,  909,  910 

Guffey  V.  Clever,  146  Pa.  548,  23  Atl.  161 211,  804,  1110 

Guild  V.  Atchison  etc.  E.  Co.,  57  Kan.  70,  45  P.  82,  57  A.  S.  R.  312, 

33  L.  E.  A.  77 213,  1212 

Guilford  t.  Mason,  22  E.  I.  422,  48  Atl.  386 

869,  906,  921,  933,  1003,  1104,  1244 

Guilford  v.  Mason,  24  R.  I.  386,  53  Atl.  284 1104,  1110 

Gummer  v.  Mairs,  140  Cal.  535,  74  P.  26 811 

Gummer  v.  Trustees,   45   Wis.   384 415 

Gunby  v.  Ingram,  57  Wash.  97,  106  P.  495 121 

Gurwell  v.  Morris,  2  Cal.  App.  451,  S3  P.  578 403,  404 

Guss  V.  Nelson,  200  U.  S.  298,  50  L.  Ed.  489,  26  S.  Ct.  260,  aflfd. 

s.  c.  14  Okl.  296,  78  P.  170 112,  507,  829,  849,  871 

Gustin  V.  Union  School  Dist.,  94  Mich.  502,  54  N.  W.  156,  34  A.  S.  R. 

361 ." 301,  321,  502,  514,  517,  606,  802,  871,  1230,  1241 

Gutierrez  del  Arroyo  y.  Graham,  227  U.  S.  181,  57  L.  Ed.  472,  33 

S.    Ct.    248 114 

Guyer  v.  Warren,  175  HI.  328,  51  N.  E.  580.  ..214,  326,  332,  851,  1227 


H 


Habeler  v.  Rogers,  131  Fed.  43,  65  C.  C.  A.  281 1119 

Hablich  v.  University  Park  Bldg.  Co.,  117  Ind.  193,  97  N.  E.  539. .  .   832 

Hahl  V.  McPherson,  (Tex.  Civ.  App.)   133  S.  W.  515 114 

Hale  V.  Patton,  60  N.  Y.  233,  19  Am.  Rep.  168 904 

Hale  V.  Triest,  134  N.  Y.  S.  673,  150  App.  Div.  166 116 

Hall  V.  Abraham,  44  Ore.  477,  75  P.  882 308,  506,  513,  520,  703 

HaU  V.  Center,  40  Cal.   63 602,  1211,  1226 

Hall  V.  Hyle,   136  N.  Y.  S.  887 1253 

HaU  V.  Spaulding,   42    N.    H.    259 834 

Hallet  V.  Taylor,  177  Mass.  6,  58  N.  E.  154 1118 

HalseU  v.  Eenfrow,  202  U.  S.  287,  50  L.  Ed.  1032,  26  S.  Ct.  610.  . 

1207,    1242 

Halsted's  Ex'rs  v.  Colvin,  51  N.  J.  Eq.  387,  26  Atl.  928 510,  804 

Hambleton  v.  Jameson,   (Iowa)   143  N.  W.  1010 805 

Hamburger  &  Dreyling  v.  Thomas,   (Tex.  Civ.  App.)   118  S.  W.  770 

101,  108,  109,  501 

Hamby  &  Toomer  v.  Georgia   I.   &  C.   Co.,   127   Ga.  792,  56   S.   E. 

1033    834 

Hamilton  v.  Finnegan,  117  Iowa  623,  91  N.  W.  1039 829,  1119 

Hamilton  v.  Hamilton,  162  Ind.  430,  70  N.  E.  535 301,  324.  1228 

Hamilton  v.  Ingram,  13  Tex.  Civ.  App.  604,  35  S.  E.  748' 515 

Hamilton  v.  Thirston,  93  Md.  213,  48  Atl.  709 418,  419 

Hammond  v.  Haskell,  14  Cal.  App.  522,  112  P.  575 122 

Hammond  v.  Hannin,  21  Mich.  374,  4  Am.  Rep.  490 1118 

47 — Option   Contracts. 


738  LAW   OP    OPTION    CONTRACTS 

Sections 

Handy  v.  Rice,  98  Me.  504,  57  Atl.  847 908 

Hanes  v.  Newport,  134  111.  App.  453 412,  1207,  1244 

Hankwitz  v.  Barrett,  143  Wis.  639,  128  N.  W.  430 403 

Hanley  v.  Kansas  &  T.  Coal  Co.,  110  Fed.  62 220 

Hanly  v.  Watterson,  39  W.  Va.  214,  19  S.  E.  536 332,  516,  856 

Hanna  v.  Ingram,  93  Ala.  482,  9  So.  621 215,  318,  610,  703 

Hansen  v.  Beebe,  111  Iowa  534,  82  N.  W.  942 830 

Hanson  v.  Fox,  155  Cal.  106,  99  P.  489,  29  L.  E.  A.  (N.  S.)  338.  . .   907 

Hardin  v.  Case,  134  Ga.  813,  68  S.  E.  648 316 

Harding  v.  Gibbs,  125  111.  85,  17  N.  E.  60,  8  A.  S.  R.  345 708 

Harding  v.  Seeley,  148  Pa.  20,  23  Atl.   1118 834 

Hardinge  v.  Empire  Zinc  Co.,   (Ariz.)    148  P.  306 609 

Hardy  v.  Ward,  150  N.  C.  385,  64  S.  E.  171 

101,  102,  122,  123,  839,  862,  864,  914,  922^  1002,  1003,  1232 

Hargis  v.  Ederington,  (Ark.)   168  S.  W.  1095 1250 

Hargis  v.  Sewell's  Adm'rs,  87  Ky.  63,  7  S.  W.  557,  9  Ky.  L.  Rep. 

920    1252 

Harle  v.  Haggin,  116  N.  Y.  S.  51,  131  App.  Div.  742 702,  1120 

Harless  v.  Petty,  98  Ind.  53 108 

Harlow  v.  Oregonian  Pub.  Co.,  45  Ore.  520,  78  P.  737 117 

Harmon  v.  Thompson,  119  Ky.  528,  84  S.  W.  569,  27  Ky.  L.  Rep. 

181    1117 

Harp  V.  Hamilton,   (Tex.  Civ.  App.)   177  S.  W.  565 302 

Harper  v.  Independence  Development  Co.,  13  Ariz.  176,  108  P.  701 

107,   509,   871,   920 

Harper  v.  Kellar,  111  Ga.  420,  35  S.  E.  667 1244 

Harper  V.  Runner,   85   Neb.   343,   123   N.   W.   313 

211,  317,  321,  515,  703,  810,  838,  847,  926,  930,  1242 

Harrington  v.  Barnes,  64  Mass.   (10  Cush.)   106 810,  902,  903 

Harris  v.  Frank,  81  Cal.  280,  22  P.  856 419 

Harris  v.  Staples,   (Tex.  Civ.  App.)   89  S.  W.  801 903 

Harrison  v.  Woodward,  11  Cal.  App.  15,  103  P.  933 501 

Hart   V.   Carpenter,    24   Conn.   427 507 

Hartman   v.   McAlister,   5   N.   C.   207 859,  922 

Hartwell  v.   Black,  48   111.  301 113,  1207,  1253 

ITartzell  v.  Crumb,  90  Mo.  629,  3  S.  W.  59 1118 

Hasbrouck  v.   Tappen,   15  Johns.    (N.   Y.)    200 410,  412 

Haskins  v.  Dern,   19  Utah  89,  56  P.   953 

109,  111,  118,  123,  508,  829,  854,  871 

Haskins  v.  Ryan,  75  N.  J,  Eq.  330,  78  Atl.  566 501,  1104,  1115 

Hathaway  v.  Stone,  215  Mass.  212,  102  N.  E.  461 122 

Hawes  v.  Favor,  161  111.  440,  43  N.  E.  1076 717,  1237 

Hawkins  v.  Graham,  149  Mass.  284,  21  N.  E.  312,  14  A.  S.  R.  422.  .    117 

Hawkins  v.  Studdard,   132  Ga.  265,  63  S.  E.   852 123 

Hawkinson  v.  Banaghan,   203   Mass.   591,   89   N.   E.   1054 120 

Hawks  v.  Bright,   51    La.    Ann.    79,    24    So.    615 518 


TABLE   OP    CASES  739 

Sections 

Hawraltj  v.  Warren,   18  N.  J.  Eq.   124,   90  Am.  Dec.  613 

321,  1203,  1218,   1231,  1248 

Hay  V.  Mason,  141  Cal.  722,  75  P.  300 706,  707,  1106,  1122 

Hayes  v.  Goldman,   71   Ark.   251,   72   S.   W.  563 710,  809 

Hayes  v,  O'Brien,  149  HI.  403,  37  N.  E.  73,  23  L.  R.  A.  555 

123,  124,  211,  212,  214.  321,  332,  1218,  1227 

Hayward  v.  Leeson,  176  Mass.  310,  57  N.  E.  656,  49  L.  R.  A.  725.  .    217 

Hayward  v.  Munger,    14    Iowa    516 903 

Hazelton  v.  LeDuc,  19  App.  Cas.  (D.  C.)  379 108,  109,  123,  217 

Hazzard  v.  Morrison,    (Tex.   Civ.   App.)    130   S.   W.   244 1252 

Head  v.  Diggon,  3  M.  &  Ry.  97,  7  L.  J.  (O.  S.)  K.  B.  36.  .703,  704,  1244 

Heard  &  Lee  v.  Heard,    (Ala.)    61  So.  343 1119 

Hecker  V.  Boylan,   126  Iowa   162,   101  N.  W.  755 121 

Hedgecock  v.  Tate,    (N.  C.)    85   S.   E.  34 203,  1248 

Hedrick  v.  Pirke,  169  Mich.  549,  135  N.  W.  319 109 

Heflin  v.  Milton,    69    Ala.    354 417 

Heine  v.  Treadwell,   72   Cal.   217,   13   P.   503 906,  921,  930,  1244 

Heman  v.  Wade,   140  Mo.  340,  41  S.  W.   740 109,  407 

Hemmings  v.  Doss,  125  N.  C.  400,   34  S.  E.  511 419 

Henderson  v.  Henrie,   68  W.  Va.   562,   71   S.   E.   172,   34  L.  R.   A. 

(N.   S.)    628,  Ann.   Cas.   1912B,   318 412 

Henion  v.  Bacon,  91  N.   Y.   S.  399,   100  App.  Div.   99 859,  928 

Hennessey  v.  Woolworth,  128  U.  S.  438,  32  L.  Ed.  500,  9  Sup.  Ct. 

109    1203 

Henry  v.  Black,  213  Pa.  620,  63  Atl.  250.. 205,  609,  802,  837,  838,  840 

Henry  v.  Black,  210  Pa.  245,  59  Atl.  1070,  105  A.  S.  R.  802 1242 

Henry  v.  Perry,  110  Ga.  630,  36  S.  E.  87 113,  513,  1125 

Henry  H.   Schott  Co.  v.   Stone,   Fisher  &  Lane,   35  Wash.   252,   77 

P.    192 1119 

Henry  Jennings  &  Sons  v.  Miller,  48  Ore.  201,  85  P.  517 1207 

Herberger  v.  Husman,  90  Cal.  583,  27  P.  428 853 

Herman  V.  Babcock,   103    Ind.   461,   3   N.   E.    142 

301,  703,  1211,  1212,  1228 

Herman  v.  Winter,  20   S.  D.   196,   105   N.   W.   457 

820,   849,  852,  904,  905,   1244 

Hersey  v.  Giblett,   18   Beav.   174,   23   L.   J.   Ch.   818,   2  Wkly.  Rep. 

206,   52   Eng.   Reprint   69 852 

Hessell  v.  Neal,  25  Colo.  App.  300,   137  P.   72 109,  870,  1008,  1248 

Heth  V.  Smith,  175  Mich.  328,   141  N.  W.  583 1214,  1218 

Hetzel  V.  Lyon,   87   Neb.   261,   126   N.  W.   997 411 

Hewitt  V.  Lehigh  &  H.  Ry.  Co.,  57  N.  J.  Eq.  511,  42  Atl.  325...   419 
Heydrick  v.  Dickey,  154  Ky.  475,  157  S.  W.  915,  159  S.  W.  666.  . 

105,   856,   1250,   1252 

Heyward  v.  Bradley,   179   Fed.   325,   102  C.  C.  A.   509 214,  324 

Heyward  v.  Willmarth,  84  N.  Y.   S.   75,   87  App.  Div.   125 

123,   210,   317,   321 


740  LAW    OF    OPTION    CONTRACTS 

Sections 
Hickey  v.  O'Brien,  123  Mich.  611,  82  N.  W.  241,  49  L.  E.  A.  594, 

81  A.  S.  R.  227 311 

Hickman  v.  Haynes,  L.  R.   10  C.  P.  598 409 

Hicks  V.  Post,  154  Cal.  22,  96  P.  878 410 

High  Wheel  Auto  Parts  Co.  v.  Journal  Co.,   (Ind.  App.)   98  N.  E. 

442    102 

Hilberg  v.  Greer,   172  Mich.   505,   138   N.  W.   201 209,  401,  406 

Hildreth  v.  Shelton,    46    Cal.    382 1242 

Hill  V.  Mathews,   78   Mich.  377,  44  N.  W.   286 716,  817,  848 

Himrod  F.  Co.  v.  Cleveland  &  M.  R.  Co.,  22  Ohio  St.  451 415 

Hines  V.  Cureton-Cole  Co.,  9  Ga.  App.  778,  72  S.  E.   191 403 

Hinish  v.  Oliver,   66   Kan.   282,    71   P.   520 904 

Hinton  v.  Jones,   136   N.  C.  53,  48   S.  E.   546 120 

Hissam  v.  Parrish,  41  W.  Va.  686,  24  S.  E.  600,  56  A.  S.  R.  892.  . 

1210,   1215,   1217 

Hitchcock  V.  Page,    14    Cal.    440 822,  1005 

Hoadley  V.  Beardsley,    (Conn.)    93   Atl.   535 221 

Hobart  v.  Frederiksen,  20   S.  D.   248,   105  N.  W,   168 108 

Hobbs  V.  Brush  Elec.  Light  Co.,  75  Mich.  550,  42  N.  W.  965 332 

Hochester  v.  De  La  Tour,  2  El.  &  Bl.  678,  6  Eng.  Rul.  Cas.  576.. 

702,    711 

Hochster  v.  Baruch,   5   Daly    (N.    Y.)    440 703,  1102,  1104 

Hockett  V.  Burns,   90   Neb.   1,   132   N.   W.   718 120 

Hodges  V.  Rowing,  58  Conn.   12,   18  Atl.  979,  7  L.  R.   A.  87 

407,  1116,   1209 

Hodnett  v.  Mann,  10  Ga.  App.  666,  73  S.  E.  1082 113 

HoflFman  v.  Maffioli,  104  Wis.  630,  80  N.  W.  1032,  47  L.  R.  A.  427.  .   311 

Hoffman  v.  Van  Dieman,  62  Wis.  362,  21   N.  W.  542 906 

Hogan  V.  Kyle,  7  Wash.  595,  35  P.  399,  38  A.  S.  R.  910 1116,  1117 

Hogg  V.  McGuffin,  67  W.  Va.  456,  68  S.  E.  41,  31  L.  R.  A.  (N.  S.) 

491    1210 

Hollander  v.  Central  Metal  etc.  Co.,  109  Md.  131,  71  Atl.  442,  23 

L.   R.   A.    (N.   S.)    1135 223,  605,  607,  909,  1239,  1241,  1244 

Holley  V.  Young,  66  Me.   520 834 

HoUis  v.  Libby,   101   Me.   802,   64  Atl.   621 

101,  812,  853,  857,  858,   1242 

Hollmann  v.  Conlon,   143   Mo.   369,   45    S.   W.    275 

851,  862,  871,  917,  1007,  1203 

Holmes  v.  Myles,  141  Ala.  401,  37  So.  588 819,  820,  850,  905,  933 

Holmes  v.  Walter,  118  Wis.  409,  95  N.  W.  380,  62  L.  R  A.  986.  .  .  222 
Holroyd  etc.  Breweries  v.  Singleton,  2  Ch.  261,  60  L.  J.  Ch.   622, 

81  L.  T.  Rep.   (U.  S.)    101,  47  Wkly.  Rep.  662 801 

Holt  V.  Moore,   37    Ark.    145 402 

Holt  y.  Silver,  169  Mass.   435,  48  N.  E.  837 805 

Holton  V.  Andrews,  151  N.  C.  340,  66  S.  E.  212 833,  835 

Home  Ins.  Co.  v.  Hamilton,  143  Mo.  App.  237,  128  S.  W.  273 117 

Homf ray  v.  Fothergill,  L.  R.   1   Eq.   576 ill 


TABLE   OF    CASES  741 

Sections 

Hoogendorn  v.  Daniel,   178  Fed.  765,   102  C.  C.  A.  213 331,  1234 

Hooker  Steam  Pump  Co.  v.  Buss,  240  Mo.  465,  144  S.  W.  419.  .107,  830 

Hooks  V.  Forst,   165   Pa.   238,   30   Atl.   846 710,  805 

Hooper  v.  Nuckles,    (Ala.)    39  So.   711 216 

Hoover  v.  Wolfe,   167  Cal.   337,   139  P.   794 811,  912,  935 

Hope  V.  Glouchester,   7  DeG.   M.   &   G.   647,   25   L.  J.   Ch.    145,   44 

Eng.   Reprint   252 223 

Hopkins  v.  Baremore,  99  Minn.  413,  109  N.  W.  831 1240 

Hopwood  V.  McCausland,    120   Iowa   218,   94   N.   W.   469 

101,  217,  710,  861,  1204,  1245 

Horgan  v.  Russell,  24  N.  D.  490,  140  N.  W.  99,  43  L.  R.  A.  (N.  S.) 

1150 501,  515,  810,  841,  845,  903,  908,  914,  920,  1242 

Horn  V.  Hansen,  56  Minn.  43,  57  N.  W.  315,  22  L.  R.  A.  617 123 

Home  V.  Niver,  168  Mass.  4,  46  N.  E.  393 849 

Horner  v.  Beasley,  105  Md.  193,  65  Atl.  820 1118 

Horner  v.  Clark,  27  Ind.   App.  6,  60   N.   E.   732 1244 

Horner  V.  McConnell,   158   Ind.   280,   63   N.   E.   472 419 

Horton  v.  Immen,  145  Mich.  438,  108  N.  W.  746 205 

Horvitz  V.  Fredson,   178   HI.   App.   303 122 

Houghwout  y.  Boisaubin,   18   N.  J.   Eq.   315 

301,  703,  817,  850,  930,  1003,  1231,  1250 

Houghwout  V.  Murphy,  23   N.  J.  Eq.  531 515 

House  V.  Burr,  24  Barb.    (N.  Y.)    525 824 

House  V.  Jackson,   24  Ore.   89,  32  P.   1027 

214,  321,  .503,  602,  607,  804,  1211,  1232,  1237,  1241,  1249 

House  V.  Security  Fire  Ins.  Co.,  145  Iowa  462,  121  N.  W.  509 511 

Houston  V.  Curran,   101  HI.  App.  203,  affd.  201   HI.  442,  66  N.  E. 

228 913 

Houston  etc.  Co.  v.  Wright,  15  Tex.  Civ.  App.  151,  38  S.  W.  836. .  .1118 

Houtz  V.  Hellman,  228  Mo.  655,  128  S.  W.  1001 1204 

Howard  v.  Galbraith,   13  Cal.   App.   373,   109  P.  889 702 

Howell  v.  Behler,  41  W.  Va.  610,  24  S.  E.  646 806 

Howell  V.  City  of  Hamburg  Co.,  165  Cal.  172,  131  P.  130 831,  8.34 

Hoyt  V.  Hall,   16  N.  Y.   Super.   Ct.  42 903 

Hoyt  V.  Tuxbury,   70   HI.   331 ' 1250 

Hubbard  v.  Coolidge,  42  Mass.  84 324 

Hubbel  Trust,  In  re,  135   Iowa  637,   113  N.  W.   512,   13  L.  R.   A. 

(N.  S.)   496,  14  Ann.  Cas.  640 221 

Hubert  V.  Sistrunk,    (Ala.)    53   So.    819 916 

Huddleston  v.  Briscoe,    11    Ves.    592 1222 

Hudgins  v.  Bowes,   (Tex.  Civ.   App.)    110  S.  W.   178 223 

Hudson  V.  Seeley  etc.  Co.,  19  Cal.  App.  213,  124  P.  1051.  .112,  508,  712 

Huebner  v.  Koebke,  42  Wis.  319 119 

Huggins  y.  Daley,  99  Fed.  606,  40  C.  C.  A.  12,  48  L.  R.  A.  320.  .  . 

309,  1211 

Huggins  V.  Saflford,   67   Mo.   App.   469 110,  1103,  1113 

Huggins  V.  Southeastern  L.  &  C.  Co.,  121  Ga.  311,  48  S.  E.  933 817 


742  LAW   OF   OPTION    CONTRACTS 

Sections 

Hughes  V.  Antill,  23  Pa.  Super.  Ct.  290 215,  401,  1243 

Hull  V.  Angus,  60  Ore.  95,  118  P.  284 1124,  1244 

HuU  V.  Peer,   27   111.   312 1244 

Humpfner  v.  D.  M.  Osborne  Co.,  2  S.  D.  310,  50  N.  W.  88 119 

Humphries  v.  Carvalho,   16   East.   45 1219 

Hungerford  v.  Gushing.    8   Wis.    332 811 

Hunt  V.  Wyman,  100  Mass.   198 Ill,  508,  830 

Hunter  v.  Clarke,  184  HI.  158,  56  N.  E.  297,  75  A.  S.  E.  160....    120 
Hunter's  Petition,  In  re,  1  Edw.  Ch.  (N.  Y.)  1...321,  1211,  1218,  1222 

Hurd  V.  Dunsmore,   63   N.   H.   171 1117 

Hurlburt  v.  Fitzpa trick,   176  Mass.   287,   57   N.  E.   464 412 

Hurley-Tobin  Co.  v.  White,   (N.  J.)   94  Atl.  52 607,  610,  834 

Hurst  V.  Jenkins,   161   Iowa  414,   143   N.  W.   401 418 

Hurst  V.  Thompson,    73    Ala.    158 1241 

Hurt  V.  Ford,  142  Mo.  283,  44  S.  W.  228,  41  L.  R.  A.  823 419 


Ide  V.  Brody,   156   HI.   App.   479 204,  205,  824,  830,  858 

Ide  V.  Leiser,  10  Mont.  5,  24  P.  695,  24  A.  S.  E.  17 

101,  103,  301,  321,  322, 

334,  407,  414,  703,  704,  859,  871,  1215,  1217,  1219,  1220,  1230,  1244 

Hlinois  Glass  Co.  v.  Three  States  L.  Co.,  90  111.  App.  599 118 

Illinois  Kaolin  Co.  v.  Goodman,  252  HI.  99,  96  N.  E.  867 309,  313 

Indiana  etc.  Lumber  Co.  v.  Pharr,  82  Ark.  573,  102  S.  W.  686 

105,  825,  862,  871,  1109 

Industrial  L.  Dev.  Co.  v.  Post,  55  N.  J.  Eq.  559,  37  Atl.  892 121 

Insurance  &  L.  Bldg.  Co.  v.  Nat'l  Bank,  71  Mo.  58 833,  834 

Insurance  Co.  of  North  Am.  v.  Martin,  151  Ind.  209,  51  N.  E.  361.  .  120 
International  Filter  Co.  v.  Cox  Bottling  Co.,  89  Kan.  645,  132  P. 

180    830 

Irvin  V.  Gregory,   79  Mass.    (13  Gray)    215 908 

Irvin  V.  Simonds,   11   N.  Bruns.   190 607 

Isaacs  V.  Silverberg  etc.  Co.,  87  Miss.  185,  39  So.  420 216 

Ives  V.  Hazard,  4  E.  I.  14,  67  Am.  Dec.  500 1218,  1233,  1237 

I.  X.  L.  etc.  House  v.  Berets,  32  Utah  454,  91  P.  279 

849,  852,  862,  865 


Jackson  Brewing  Co.  v.  Wagner,  117  La.  875,  42  So.  356 835,  S50 

Jackson  v.  Jackson,   175   Fed.   710,   99   C.   C.   A.   286 502 

Jackson  v.  Moore,  87  N.  Y.  S.  1101,  94  App.  Div.  504 208 

Jackson  v.  O'Hara,   183  Pa.   233,   38   Atl.   624 3(J9 


TABLE   OF    CASES  743 

Sections 
Jackson   ex  dem.  Lewis  v.   Schutz,   18  Johns.    (N.  T.)    174,   9  Am. 

Dec.    195 215 

Jackson  ex  dem.  Livingston  v.  Groat,  7  Cow.  (N.  Y.)  285 

211,  602,  605,  607 

James  v.  Darby,  100  Fed.  224,  40  C.  C.  A.  341.  .206,  811,  838,  841,  860 

James  v.  Pope,  19  N.  Y.  324 807 

James  E.  Mitchell  &  Co.  v.  Wallace,  27  Ky.  L.  Eep.  967,  87  S.  W. 

303    856 

James  Smith  Woolen  Machine  Co.  v.  Holden,  73  Vt.  396,  51  Atl.  2.  .   508 

Jarboe  v.  Severin,  85  Ind.  496 405 

Jarman  v.  Westbrook,  134  Ga.  19,  67  S.  E.  403 410,  414,  415 

Jarvis  v.  Sutton,   3    Ind.    289 113,  712 

Jasper  County  El.  Ry.  Co.  v.  Curtis,  154  Mo.  10,  55  S.  W.  222 1248 

Jeffreys  v.  Charlton,  72  N.  J.  Eq.  340,  65  Atl.  711.  .107,  115,  862,  871 

Jeffries  v.  Charlton,  74   N.   J.   Eq.   430,   70   Atl.   145 i>20 

Jenkins  v.  Locke,   3   App.   D.   C.   485 205,  1235 

Jennings  V.  Morris,   211  Pa.   600,   61  Atl.   115 216 

Jennings  etc.  Syndicate  v.  Houssiere-Latreille  Oil  Co.,  119  La.  793, 

44   So.   481 305,  329,  712,  716,  849,  864,  871 

Jersey  City  v.  Flinn,   (N.  J.  Eq.)   78  Atl.  391 1254 

Jersey  City  v.  Flynn,  74  N.  J.  Eq.  104,  70  Atl.  497.  .116,  513,  872,  908 

Jersey  Island  Dredging  Co.  v.  Whitney,  149  Cal.  269,  86  P.  691 123 

J.  J.  Moore  &  Co.  v.  United  States,  196  U.  S.  157,  49  L.  Ed.  428, 

25    S.   Ct.    202 123 

J.  L.  Gates  Land  Co.  v.  Ostrander,  124  Wis.  287,  102  N.  W.  558.  . 

1207,    1208 

Joffrion  v.  Gumbel,  123  La.  391,  48  So.  1007 1248,  1249,  1250 

John  V.  Elkins,  63  W.  Va.  158,  59  S.  E.  961 107,  122,  1101,  1103 

.John  Deere  Plow  Co.  v.  Gorman,  9  Kan.  App.  675,  59  P.  177 1119 

Johnson  v.  Eklund,   72  Minn.   195,  75  N.  W.   14 1241 

Johnson  v.  Hubbell,   10   N.   J.   Eq.   332,   66  Am.   Dec.   773 1204 

Johnson  v.  Lumber  Co.,  163  Fed.  249,  89  C.  C.  A.  632 301 

Johnston  v.  Gray,  16  Serg.  &  R.   (Pa.)   361,  16  Am.  Dee.  577 902 

Johnston  v.  Trask,  116  N.  Y.  136,  22  N.  E.  377,  15  A.  S.  R.  394, 

5   L.   R.    A.    630 \   403 

Johnston  v.  Trippe,  33  Fed.  530.. 301,  326,  801,  871,  1101,  1234,  1237 
.lohnston  V.  Wadsworth,   24   Ore.    494,   34   P.    13 

332,  406,  1116,  121.5,  1232 

.Tolliflfe  V.  Steele,  9  Cal.  App.   212,  98  P.  544 114,  320,  1124 

Jones  V.  Barnes,   94  N.   Y.   S.  695,   105  App.  Div.   287 

207,  331,  1222,  1243 

Jones  V.  Brown,   171  Mass.  318,  50  N.   E.   648 21.5,  716,  717,  1210 

Jones  V.  Gardiner,  1  Ch.  191,  71  L.  J.  Ch.  93,  86  L.  T.  Rep.  (N.  S.) 

74,  50  Wkly.  Rep.  265 1118 

Jones  V.  Hert,    (Ala.)    68   So.   259 109 

Jones  V.  Lewis,   89   Ark.   368,   117   S.   W.   561 110,  703 


744  LAW   OF   OPTION    CONTRACTS 

Sections 
Jones  V.  Moncrief-Cook  Co.,  25  Okl.   856,   108  P.   403 

211,  830,  838,  858,  862,  918 

Jones  V.  Noble,  66  Ky.    (3  Bush.)    695 862,  1221 

Jones  V.  Norton,  136  Ga.  835,  72  S.  E.  337 119 

Jones  V.  Portsmouth  &  C.  R.  K.,  32  N.  H.  544 829 

Jones  V.  Robinson,   17   L.   J.   Exch.   36 1244 

Jones  V.  Sowers,  204  Pa.  329,  54  Atl.   169 869 

Jorgensen  v.  Tuolumne  Co.,  205  Fed.  612,  123  C.  C.  A.  628 122 

Josey  V.  Perlstein,    (Tex.  Civ.  App.)    107   S.  W.  558 1126 

Journe  v.  Hewes,  124  Cal.  244,  56  P.  1032 519,  1125 

Joy  V.  Birch,  4  CI.  &  Fin.  57,  7  Eng.  Reprint  22 837 

Joyce  V.  Tomasini,   168   Cal.   234,   142   P.   67 123,  214,  1003,  1244 

Judd  V.  Ensign,  6  Barb.    (N.  Y.)    258 905 

Judge  V.  Cash,   5   Ky.   L.  Rep.   514 417 

Julien  V.  Model  Bldg.  L.  &  Inv.  Ass'n,  116  Wis.  79,  92  N.  W.  561, 

61  L.  R.  A.  668 121 

Justice  V.  Lang,  42  N.  Y.  493,  1  Am.  Rep.  576 1222 


K 

Kadish  v.  Lyon,  229  JW.  35,  82  N.  E.  194 502,  607 

Kahn  v.  Klabunde,   50  Wis.  235,   6   N.  W.   888 507 

Kahn  V.  Walton,  46  Ohio  St.   195,   20  N.  E.   203 216 

Kaiser  V.  Barron,   153   Cal.   788,   96   P.   806 1244 

Kaufman  v.  All  Persons,  16  Cal.  App.  388,  117  P.  586 

512,   610,  817,   918 

Kaufmann  v.  Liggett,  209  Pa.  87,  58  Atl.  129,  67  L.  R.  A.  353, 

103   A.   S.  R.   988 213,  1212 

Kean  v.  Landrum,  72  S.  C.  556,  52  S.  E.  421 1118 

Kean  v.  Story  &  Clark  Piano  Co.,  121  Minn.  198,  140  N.  W.  1031 

832,  835,  869 

Kee  V.  Davis,  137  Cal.  456,  70  P.  294,  671 123 

Keene  etc.  Bank  v.  Reid,  123  Fed.  221,  59  C.  G.  A.  225 120 

Keene  v.  Zindorf,   81   Wash.    152,   142   P.   484 715,  802,  912 

Keep  V.  Miller,  42  N.  J.  Eq.   100,  6  Atl.  495 517 

Keith  V.  Kellerman,    169    Fed.    196 1126 

.  Kelleher  v.  Fong,  108  Me.  181,  79  Atl.  466 832 

Keller  v.  Fitzgerrell,  158  HI.  App.  534,  affd.  249  111.  451,  94  N.  E. 

926 402,  405,  419 

Keller  v.  Fisher,   7   Ind.   718 912 

Kelley  v.  Ohio  Oil  Co.,  57  Ohio  St.  317,  49  N.  E.  399,  39  L.  R.  A. 

765,  63  A.  S.  R.  721 1211 

Kellow  V.  Jory,  141  Pa.  144,  21  Atl.  522 114,  857,  1249,  1250 

Kelly  V.  Bogardus,  51  Mich.  522,  16  N.  W.  885 119 

Kelly  V.  Chicago  M.  &  St.  P.  Ry.  Co.,  93  Iowa  436,  61  N.  W.  957 .  . 

123.    1103 


TABLE   OF    CASES  745 

Sections 

Kelly  V.  Thuey,  143  Mo.  422,  45  S.  W.  300 802,  1238 

Kelsey  v.  Crowther,  162  U.  S.  404,  40  L.  Ed.  1017,  16  Sup.  Ct.  808 

868,  870,  924,  929 

Kemp  V.  Humphreys,   13   111.   573 920 

Kempner  v.  Cohn,  47  Ark.  519,  1  S.  W.  869,  58  Am.  Rep.  775 

704,  818,  1118 

Kennedy  v.  City  of  New  York,  196  N.  Y.  19,  89  N.  E.  360 831 

Kennedy  v.  Davis '   Devisees,   23   Ky.   372 1240 

Kennedy  v.  Gibson,  68  Kan.  612,  75  P.  1044 120 

Kennedy  v.  Shaw,  43  Mich.  359,  5  N.  W.  396 324 

Kennicott  v.  Leavitt,  37  HI.  App.  435 1218 

Kenny  v.  Knight,  119  Fed.  475 117 

Kent  V.  Costin,   (Minn.)   153  N.  W.  874 403,  1208 

Kentucky  Chair  Co.  v.  Commonwealth,  105  Ky.  455,  49  S.  W.  197, 

20  Ky.  L.  Rep.  1279 912 

Kentucky  Distilleries  Co.  v.  Warwick  Co.,  109  Fed.  280,  48  C.  C.  A. 

363 862,  929,  1008 

Kentucky  D.  &  W.  Co.  v.  Blanton,  149  Fed.  31,  80  C.  C.  A.  343 1218 

Kentucky  Iron  etc.  Co.  v.  Adams,  32  Ky.  L.  Rep.  823,  106  S.  W. 

1198 710,  1249,  1250 

Kentucky  Lumber  Co,  v.   Newell,  32  Ky.  L.  Rep.   396,   105   S.  W. 

972 831,  833,  834,  912 

Kerr  v.  Day,  14  Pa.  112,  53  Am.  Dec.  526 

215,  503,  515,  517,  601,  602,  607,  1233,  1241,  1242 

Kerr  v.  Hammond,  97  Ga,  567,  25  S.  E.  337 942 

Kerr  v.  Purdy,  50  Barb.   24,  51  N.  Y.  629 935,  936 

Kerting  v.  Hatcher,   216   HI.  232,   74  N.  E.   783 520 

Kessler  v.  Pruitt,  14  Idaho  175,  93  P.  965 105,  712,  907,  1003,  1008 

Ketchum  v.  Alexander,   153  N.  Y.  S.   864 112 

Keyport  Brick  etc.  Co.  v.  Lorillard,   (N.  J.)   19  Atl.  381 865,  939 

Keystone  L.  etc.  Co.  v.  Jenkinson,  69  Mich.  220,  37  N.  W.  198 902 

Kibler  v.  Caplis,  140  Mich.  28,  103  N.  W.  531,  112  A.  S.  R.  388.. 

123,  814,  819,  1003 

Kicks  V.  State  Bank,  12  N.  D.  576,  98  N.  W.  408 1118 

Kidder  v.  Hunt,  18  Mass.   (1  Pick.)   328,  11  Am.  Dec.  183 1207 

Killough  V.  Lee,  2  Tex.  Civ.  App.  260,  21  S.  W.  970 839,  848,  916 

Kilpatrick  v.  Germania   Life    Ins.    Co.,    183    N.   Y.    163,   75   N,   E. 

1124,  2  L.  R.  A.  (N.  S.)   574,  111  A.  S.  R.  722 121 

Kimball  v.  Cross,  136  Mass.  300 834 

Kimmins  v.  Oldham,  27  W.  Va.  258 418 

Kinkaid  v.  Levy,  151  Mo.  App.  352,  131  S.  W.  757 123,  1111 

King  v.  Finch,    60    Lad.   420 903 

King  v.  Gildersleeve,  79  Cal.  504,  21  P.  961 1218 

King  V.  Hamilton,  29  U.  S.  311,  7  L.  Ed.  869 1204 

King  V.  Maxey,   (Tex.  Civ.  App.)   28  S.  W.  401 828,  1123 

King  V.  Prospect  Point  Fishing  Club,    (Md.)    94  Atl.   780 515,  1211 


746  LAW   OF   OPTION    CONTRACTS 

Sectionx 

King  V.  Raab,   123   Iowa  632,   99   N.  W.   306 

520,  871,  909,  1006,  1249,  1254 

King  V.  Smith,   33   Vt.    22 1116 

Kingsbury  v.  Kirwan,    77    N.    Y.    612 216 

Kingsley  v.  Kressly,    60   Ore.    167,    118   P.    678,   Ann.    Cas.    1913E, 

746 106,  110,  322,  323,  412,  513,  849,  872,  939,  940,  1005,  1124 

Kingston  v.  Waters,  16  N.  M.  59,  113  P.  594 412,  939 

Kinney  v.  Eckenberger,    (Ore.)    145  P.  665 205 

Kinsell  v.  Ballou,  151  Cal.   754,   91   P.  620 121 

Kinsey  Co.  v.  Board  of  Trade,  198  U.  S.  236,  49  L.  Ed.  1031,  25 

S.  Ct.  637 216 

Kirby  Carpenter  Co.  v.  Burnett,  144  Fed.  635,  75  C.  C.  A.  437 

101,   122,   301,    1104 

Kirk  V.  Van  Petten,  38  Fla.  335,  21  So.  286 120 

Kirk  V.  Williams,  24  Fed.   437 417 

Kissack  v.  Bourke,   132   111.   App.   360 513,  1125 

Kissack  v.  Bourke,   224  111.   352,   79   N.   E.  619,  s.  c.   242   111.  233, 

89    N.   E.    990 412,  413,  1244 

Kleeb  v.  Mclnturflf,   71  Wash.  419,   128  P.   1076 903 

Kleinclaus  v.  Dutard,  147  Cal.  245,  81  P.  516 1252 

Kline  v.  Vogel,  90  Mo.  239,  1  S.  W.  733,  2  S.  W.  408 1252 

Kling  V.  Bordner,  65  Ohio  St.  86,  61  N.  E.  148 418 

Knapp  V.  Keed,    88   Neb.   754,    130    N.   W.    430,   Ann.   Cas.    1912B, 

1095    807 

Knerr  v.  Bradley,  105  Pa.  190 519,  1003 

Knisely  V.  Leathe,    (Mo.)    178  S.   W.   453 823 

Knowles  v.  Hull,   97   Mass.   206 708,  855 

Knox  V.  McMurray,  159  Iowa  171,  140  N.  W.  652 841,  912,  1008 

Kochv.  Streuter,  218  HI.  546,  75  N.  E.   1049,  2  L.  R.  A.   (N.  S.) 

210    1236 

Kolachny  v.  Galbreath,  26  Okl.  272,   110  P.  902 117 

Kolasky  v.  Michels,  120  N.  Y.  635,  24  N.  E.  278 607,  808 

Kolb  V.  Bennett  Land  Co.,  74  Miss.  567,  21  So.  233 320 

KoUoek  V.  Kaiser,  98  Wis.  104,  73  N.  W.  776 .831,  833 

Korrer  v.  Madden,  152  Wis.  646,   140  N.  W.  325 403 

K.  P.  Min.  Co.  V.  Jacobson,  30  Utah   115,  83  P.  728,  4  L.  R.  A. 

(N.  S.)    755 710,  nil,  1122 

'  Krah  v.  Radcliffe,  78  N.  J.  Eq.  305,  81  Atl.  1133 207,  1005,  1253 

Krah  v.  Wassmer,  75  N.  J.  Eq.  109,  71  Atl.  404 

217,  407,  415,  416,  419,  1005,  1204,  1243,  1244,  1248,  1253 

Kramer  v.  Cook,  7  Gray    (Mass.)    550 832,  834 

Kramer  v.  Ewing,  10  Okl.  357,  61  P.  1064 118 

Kreutzer  v.  Lynch,   122   Wis.  474,   100   N.  W.   887 

206,  407,  602,  603,  806a,  811,  844,  912,  926,  930 

Krhut  V.  Phares,  80  Kan.  515,  103  P.  117 205,  502,  602 

Kroll  V.  Diamond  Match  Co.,  106  Mich.  127,  63  N.  W.  983.  .  .419,  1244 


TABLE   OF    CASES  747 

Sections 

Krouse  v.  Woodward,  110  Cal.  638,  42  P.  1084 1219 

Kruegel  v.  Berry,  75  Tex.  230,  9  S.  W.  863 710,  863,  871 


Ladd  V.  King,  1  E.  I.  224,  51  Am.  Dec.  624 410,  412 

Laflfan  v.  Naglee,  9  Cal.  663,  70  Am.  Dec.  678 607,  810 

Lambert  Hoisting  Engine  Co.  v.   Cannody,  79  Conn.  419,   65   Atl. 

141    112 

Landon  v.  Morehead,  34   Okl.   701,   126  P.   1027 402,  605,  1121 

Lane  T.  Shackf ord,  5  N.   H.   130 418 

Lane  v.  Ziemer,   (Ind.  App.)   98  N.  E.  741 811 

Langellier  v.  Schaefer,  36  Minn.  361,  31  N.  W.  690 841 

Langert  v.  Eoss,   1  Wash.  250,  24  P.  443 108,  123,  919 

Laning  v.  Cole,  4  N.  J.  Eq.  229 305,  1236 

Lansing  v.  Rogers,    (Mich.)    149   N.   W.   1000 107 

Lanz  V.  McLaughlin,   14  Minn.   72 415,  417,  903 

I^armon  v.  Jordan,    56    111.    204 703,  704,  705,  856,  857,  1124 

Lamed  v,  Wentworth,   114  Ga.   208,   39   S.   E.   855 

301,   703,  838,  841,  849,  862,  871,  1126 

Larsh  v.  Boyle,  36  Colo.   18,  86  P.  1000 402 

La  Rue  v.  Groezinger,  84  Cal.  281,  24  P.  42,  18  A.  S.  R.  179 604 

Lasher  v.  Loeffler,   190  111.   150,   60  N.  E.   85 1248 

Latimer  v.  Capay  Val.  L.  Co.,  137  Cal.  286,  70  P.  82 906,  921 

Laughlin  v.  U.  S.  Rolling  Stock  Co.,  64  Fed.  25 829 

Laughner  v.  Smith,  232  111.  534,  83  N.  E.  1052 106,  861 

Lauterjung  v.  Chicago  T.  &  T.  Co.,  156  111.  App.  621 121 

Lawes  v.  Bennett,  1  Cox  167,  29  Eng.  Reprint  1111 512,  517,  607 

Lawrence  v.  McCalmont,  43  U.  S.  426,   11  L.  Ed.  326 324 

Lawrence  v.  Pederson,  34  Wash.   1,   74  P.   1011 109,  114,  122,  205 

Lawrenson  v.  Butler,  1  Sch.  &  Lef.  13 407,  827,  1219,  1222 

Lawyer  v.  Post,  109  Fed.  512,  47  C.  C.  A.  491 410,  802,  1238 

Lazarus  V.  Heilmau,  11  Abb.  N.  C.    (N.  Y.)    93 515 

Lazier  v.  Cady,  44  Wash.  339,  87  P.  344 610 

Leadville  M.  Co.  v.  Hemphill,   (Ariz.)    149  P.  384 205 

Leaird  v.  Smith,   44   N.   Y.   618 921 

Leavitt  v.  Maykell,   203  Mass.  506,  89  N.   E.   1056 831,  S33 

Lechner  v.  Strauss,  50  Ind.  App.  414,  98  N.  E.  444 122,  929,  1008 

Ledwith  v.  Reichard,  203  Pa.  277,  52  Atl.  251 903 

Lee  V.  Carter,  52  La.  Ann.  1453,  27  So.  739 123 

Lee  V.  Cochran,   157  Ala.  311,  47   So.  581 122,  519,  852,  910 

Lee  V.  Security  Bank  &  Trust  Co.,  124  Tenn.  582,  139  S.  W.  690.  .    121 

Leeman  v.  Edison  El.  Co.,  53  N.  Y.  S.  302 1111 

L'Engle  v.  Overstreet,  61  Fla.  653,  55  So.  381 122,  827,  869,  913 

Lenman  v.  Jones,  222  U.  S.  51,  56  L.  Ed.  89,  32  S.  Ct.  18 217,  1248 

Lenman  v.  Jones,  33  App.  D.  C.  7 802,  803 


748  LAW  OF   OPTION    CONTRACTS 

Sectiom 
Leopold  V.  Furber,  84  Ky.  214,  1  S.  W.  404,  8  Ky.  L.  Eep.  198...  1116 

Leppla  V.  Mackey,  31  Minn.  75,  16  N.  W.  470 607 

LeBoy  t.  Jacobosky,  136  N.  C.  443,  48  S.  E.  796,  67  L.  R.  A.  977. .   203 

Lester  v.  Hutson,    (Tex.  Civ.  App.)    167  S.  W.  321 869 

Lester  Agricultural  Chem.  Wks.  v.  Selby,  68  N.  J.  Eq.  271,  59  Atl. 

247 113,  710,   1213 

Leuschner  v.  Duff,  7  Cal.  App.  721,  95  P.  914 322,  323,  703,  1206 

Levin  V.  Dietz,  194  N.  Y.  376,  87  N.  E.  454,  20  L.  R.  A.  (N.  S.) 

251 415,  416,  417,  820,  849,  1222 

Levy  V.  Kottman,  11  Misc.  Rep.  372,  32  N.  Y.  S.  241,  65  N.  Y.  St. 

Rep.   422 107 

Levy  V.  Lyon,  153  Cal.  213,  94  P.  881 913,  917,  1124,  1244 

Lewis  V.  Agoure,  8  Cal.  App.  146,  96  P.  327 708,  802,  1250 

Lewris  v.  Johnson,  123  Minn.  409,  143  N.  W.  1127 415,  838 

Lewis  v.  North,  62  Neb.  552,  87  N.  W.  312 1253 

Lewis  V.  Tipton,  10  Ohio  St.  88,  75  Am.  Dec.  498 122 

Libbey  v.  Packwood,  11  Wash.   176,  39  P.  444,  647 854 

Libby  v.  Parry,  98  Minn.  366,  108  N.  W.  299 109,  1244 

Licking  Rolling  Mills  Co.  v.  W.  P.  Snyder  &  Co.,  28  Ky.  L.  Rep. 

357,  89  S.  W.   249 123 

Liggett  V.  Kaufman,  231  Pa.  398,  80   Atl.  871 807 

Lilford  V.  Keck,  30  Beav.  295,  54  Eng.  Reprint  902 848 

Lillard  v.  Kentucky  Distilleries  Co.,  134  Fed.  168,  67  C.  C.  A.  74.  .    123 

Lindley  v.  Blumberg,  7  Cal.  App.  140,  93  P.  894 514,  1109 

Lindley  v.  Groff,  37  Minn.  338,  34  N.  W.  26 122 

Lindsay's  Estate,  210  Pa.  224,  59  Atl.  1074 215,  218 

Linn  V.  McLean,  80  Ala.  360 703,  704,  818,  838,  871,  1225 

Linn  v.  McLean,  85  Ala.  250,  4  So.  777 414 

Linn  Boyd  Co.  v.  Terrill,  76  Ky.   (13  Bush.)   463 419 

Lippert  V.  Garrick  Theater  Co.,  144  Wis.  413,  129  N.  W.  409 122 

Lisenby  v.  Newton,  120  Cal.  571,  52  P.  813,  65  A.  S.  R.  203 610 

Litchfield  v.  Irvin,  51   N.  Y.  51 829 

Little  V.  Cardwell,    (Ky.)    122  S.  W.  799 502,  1008 

Litz  V.  Goosling,   93   Ky.   185,   19   S.   W.   527,   14  Ky.  L.  Rep.   91, 
■21  L.  R.  A.   127...  110,  301,  302,  303,  330,  1218,  1221,  1224,  1236 

Livesley  v.  Muckle,  46  Ore.  420,  80  P.  901 1204 

Livingston  v.  Stickles,   8  Paige    (N.   Y.)    398 1209 

Lockman  v.  Anderson,  116   Iowa   236,   89   N.  W.   1072 862,  917,  925 

Loeb  V.  Stem,  198  El.  371,  64  N.  E.  1043 216,  856 

Loeffler  v.  Wright,  13  Cal.  App.  224,  109  P.  269 1106,  1120,  1244 

Loewi  V.  Long,  76  Wash.  480,  136  P.  673 1119 

London  etc.  R.  Co.  v.  Gomm,  20  Ch.  Div.  562,  51  L,  J.  Ch.   530, 

46  L.  T.  Rep.   (N.  S.)  449,  30  Wkly.  Rep.  620 219 

Lonergan  v.  Goodman,  241  111.  200,  89  N.  E.  349 913,  1204 

Long  V.  Needham,  37  Mont.  408,  96  P.  731 818,  847 

Long  V.  Stafford,  103  N.  Y.  274,  8  N.  E.  522 832,  835 

Longfellow  v.  Huffman,  57   Ore.   338,   112  P.   8 118 


TABLE  OF   CASES  749 

Sections 

Longfellow  ▼.  Moore,    102    HI.    289 869,  907,  939 

Longworth  v.  Mitchell,   26   Ohio   St.   334 849,  856,  862 

Lord  V.  Miller,    (Wash.)    150  P.  631 823,  827 

Lorillard  v.  Company,  48  N.  J.  Eq.  295,  22  Atl.  203 850 

Loughridge  v.  Allen,  18  K7.  L.  Rep.  894,  38  S.  W.  698 112 

Louisville  &  N.  R.  Co.  v.  Coyle,  123  Ky.  854,  97  S.  W.  772,  99  S.  W. 

237,  30  Ky.  L.  Rep.  201,  8  L.  R.  A.   (N.  S.)   433,  124  A.  S.  R. 

384    307 

Louisville  &  N.  R.  Co.  v.  Gulf  of  Mexico  Land  etc.  Co.,  82  Miss. 

180,  33  So.  845,   100  A.  S.  R.  627 106 

Louisville  R.  Co.  v.  Williams,  33  Ky.  L.  Rep.  168,  109  S.  W.  874.  . .   903 

Louis  Werner  Sawmill  Co.  v.  O'Shee,  111  La.  817,  35  So.  919 213 

Lounsbery  v.  Locander,  25  N.  J.  Eq.  554 1005 

Levering  v.  Fogg,   35   Mass.    540 1238 

Low  v.  Young,  158  Iowa  15,  138  N.  W.  828.. 109,  123,  870,  1101,  1103 

Lowenstein  v.  Phelan,   17   Neb.   429,   22   N.  W.   561 121 

Lowry  Realty  Co.  v.  Wiles,  123  Minn.  297,  143  N.  W.  738 834,  836 

Lowther  Oil  Co.  v.  Guffey,  52  W.  Va.  88,  43  S.  E.  101 

223,  324,  325,  326,  328 

Loyd  V.  Loyd'B  Ex'rs,  102  Va.  519,  46  S.  E.  687 220 

Lucy  v.  Davis,   163  Cal.  611,   126  P.  490 912 

Ludden  &  Bates  So.  Music  House  v.  Dusenberry,  27  S.  C.  464,  4 

S.   E.   60 113 

Lulgart  V.  Lexington  Turf  Club,  130  Ky.  473,  113  S.  W.  814.  .502,  509 

Luke  V.  Livingston,  9  Ga.  App.  116,  70  S.  E.  596 107,  122,  331 

Lumaghi  V.  Abt,  126  Mo.  App.  221,  103  S.  W.  104 

905,  1002,  1003,  1111,  1116 

Lusky  V.  Keiser,  128  Tenn.  705,  164  S.  W.  777 417 

Lydig  V.  Braman,  177  Mass.   212,  58  N.  E.   696 415 

Lynch  v,  Willford,  57  Minn.  377,  59  N.  W.  311 828 

Lynch  v.  Wright,    94    Fed.    703 1118 

Lyons  v.  Stills,  97  Tenn.  514,  37  S.  W.  280 123,  712 


Mc 

McBrier  v.  Marshall,  126  Pa.  390,  17  Atl.  647 833 

McCall  Co.  V.  Icks,  107  Wis.  232,  83  N.  W.  300 702 

McCampbell  v.  Obear,   (Cal.  App.)    148  P.  942 1251 

McCarthy  v.  Benedict,  89  Neb.  293,  131  N.  W.  598 120 

McCarthy  v.  Couch,  37  Minn.   124,  33   N.  W.  777 1238 

McCarty  v.  Helbling,   (Ore.)   144  P.  499... 411,  801,  868,  869,  906,  909 
McCauley  t.  Coe,  150  111.  311,  37  N.  E.  232... 510,  704,  705,  862,  1124 

McCaw  Mfg.  Co.  v.  Felder,  115  Ga.  408,  41  S.  E.  664 311 

McClandish  v.  Newman,  22  Pa.  460 214 

McClelland  v.  McLemore,  (Tex,  Civ.  App.)  70  S.  W.  224 117 

McClelland  v.  Rush,  150  Pa.  57,  24  Atl.  354 411,  413,  816,  835 


750  LAW    OF    OPTION    CONTRACTS 

Sections 

McClellanf]  v.  Scroggin,  35  Neb.  536,  53  N.  W.  469 5U9 

McClintock  v.  Joyner,  77  Miss.  678,  27  So.  837,  78  A.  S.  R.  541 

607,  804,   1102 

McCliig  V.  McPherson,  47  Ore.  73,  81  P.  567 810 

McCiung  T.  Paradise  G.  M.  Co.,  164  Cal.  517,  129  P.  774 509 

McCor.athy  v.  Lanham,  116  Ky.  735,  25  Ky.  L.  Rep.  971,  76  S.  W. 

535 110,   404,  409 

McConkey  v.  Peach  etc.  Co.,  68  Fed.  830,  16  C.  C.  A.  8,  affd.  161 

U.  S.  500,  40  L.  Ed.  786,  16  S.  Ct.  640 848,  871 

McCormick  v.  Hickey,  56  N.  J.  Eq.  848,  42  Atl.  1019 930 

McCormick  v.  Stephany,  57  N.  J.  Eq.  257,  41  Atl.  840 

332,   517,   606,    1211,    1218,    1238,   1248 

McCormick  v.  Stephany,  61  N.  J.  Eq.  208,  48  Atl.  25 

103,  124,  207,  211,  832,  710,  838,  846,  862.  912,  1005,  1243 

McCormick  H.  Mach.  Co.  v.  Balfauy,  78  Minn.  370,  81  N.  W.   10, 

79  A.  S.  R.  393 1119 

McCoiirt  V.  Singers-Bigger,  145  Fed.  103,  76  C.  C.  A.  73,  7  Ann.  Cas. 

287 515,  802 

McCowen  v.  Pew,  147  Cal.  299,  81  P.  958 520,  908,  910,  1254 

McCowen  v.  Pew,  153  Cal.  735,  96  P.  893,  21  L.  R.  A.  (N.  S.)  800, 

15  Ann.  Cas.  630 215 

McCowen  v.  Pew,  18  Cal.  App.  302,  123  P.  191.  .847,  868,  869,  871,  1224 

McCracken  v.  Harned,  66  N.  J.  L.  37,  48  Atl.  513 850,  857 

McCrea  v.  Ford,  24  Colo.  App.  506,  135  P.  465 1119 

McCrea  v.  Hinkson,  65  Ore.  132,  131  P.  1025 217,  712 

McCrea  v.  Purraort,  16  Wend.  (N.  Y.)  460,  30  Am.  Dec.  103 1222 

McCullough-Dalzell  C.  Co.  v.  Philadelphia  Co.,  223  Pa.  336,  72  Atl. 

633    117 

McDongald  v.  Dougherty,  11  Ga.  570 902 

McElroy  v.  Ludlum,  32  N.  J.  Eq.  828 418 

McFadden  v.  McCann,  25  Iowa  252 716 

McFarland  t.  McCormick,  114  Iowa  368,  86  N.  W.  369 101,  107,  871 

McGonigal  v.  Ranghley,  6  Pennewill  (Del.)  61,  63  Atl.  801 205 

McGough  V.  Hopkins,  172  Mich.  580,  138  N.  W.  210 217 

McGraw  v.  Hanway,   120   Md.   197,   87   Atl.   666,   Ann.  Cas.   1915A, 

601    122 

McGregor  v.  Ireland,  86  Kan.  426,   121  P.  358 110,  501,  506 

McGuire  v.  Bradley,  118  111.  App.  59 -903 

McHenry  y.  Mitchell,  219  Pa.  297,  68  Atl.  729 123,  922,  1003,  1111 

Mclntyre  L.  &  E.  Co.  v.  Jackson  L.  Co.,  165  Ala.  268,  51  So.  767.  . .    118 

McKay  v.  Carrington,  Fed.  Cas.  No.  8,841,  1  McLean  50 517 

McKeen  v.  Harwood,  15  Ala.  792 318 

McKell  V.  Chesapeake  etc.  R.  Co.,   186  Fed.  39,   108  C.  C.   A.   141, 

affd.  175  Fed.  321,  99  C.  C.  A.  109 222.  857 

McKenzie  v.  Murphy,  31  Colo.  274,  72  P.  1075 865.  917,  938 

MeKenzie  y.  Roper  Wholesale  Grocery  Co.,  9  Ga.  App.  185,  70  S.  E. 

981    508 


TABLE  OF  CASES  751 

Sectio7is 

McKnJght  T.  Broadway  Inv.  Co.,  147  Ky.  535,  145  S.  W.  377 209 

McLaughlin  v.  Leonhardt,  113  Md.  261,  77  Atl.  647 1204 

McLaughlin  v.  Royce,  108  Iowa  254,  78  N.  W.  1105 810,  903,  910 

McLaurin  v.  Cuba  Co.,  84  N.  Y.  S.  526,  87  App.  Div.  558 102,  103 

McManus  v.  City  of  Boston,  171  Mass.  152,  50  N.  E.  607.  .406,  809,  826 
McMillan  v.  Ames,  33  Minn.  257,  22  N.  W.  612.... 331,  332,  333,  703 

McMillan  v.  Phil.  Co.,  159  Pa.  142,  28  Atl.  220 122,  124,  309,  328 

McNaughton  v.  Smith,  136  Mich.  368,  99  N.  W.  382 419 

McNitt  V.  Clark,  7  Johns.   (N.  Y.)   465 854 

McPheters  v.  Kimball,  99  Me.  505,  59  Atl.  853 906 

McQueen  v.  Chouteau's  Heirs,  20  Mo.  222,  64  Am.  Dec.  178 604 

McSwain  V.  Davis,  96  S.  C.  165,  80  S.  E.  87 1233 


M 

Mack  V.  Dailey,  67  Vt.  90,  30  Atl.  686 124,  717,  931,  1123 

Mackenzie  v.  Childers,  L.  R.  43  Ch.  Div.  265 219 

Mackintosh  v.  Gibbs,  81  N.  J.  L.  577,  80  Atl.  554,  Ann.  Cas.  1912D, 

163   120 

Maclay  v.  Harvey,  90  HI.  525,  32  Am.  Rep.  35 704,  849 

Macon  Auto  Co.  v.  Heard,  142  Ga.  264,  82  S.  E.  658 604 

Mactier  v.  Frith,  6  Wend.  (N.  Y.)  103,  21  Am.  Dec.  262.  .814,  817,  848 

Madden  v.  City  of  Boston,  177  Mass.  350,  58  N.  E.  1024 822,  826 

Maddox  v.  Bramlett,  84  Ga.  84,  11  S.  E.  128 811 

Maddox  v.  Wyman,  92  Cal.  674,  28  P.  838 119 

Madison  Athletic  Ass'n  v.  Brittin,  60  N.  J.  Eq.  160,  46  Atl.  652..    113 

Magee  v.  Catching,   33   Miss.   672 858 

Magin  v.  Niner,  110  Md.  299,  73  Atl.  12 1212 

Magoffin  v.  Holt,  62  Ky.    (1  Duv.)   95 829,  852,  862 

Magruder  v.  Hornot,  110  La.  585,  34  So.  696 203 

Maguire  v.  Halstead,  45  N.  Y.  S.  783,  18  App.  Div.  228 851 

Mahler  v.  Newbaur,  32  Cal.  168,  91  Am.  Dec.  571 902 

Main  St.  &  A.  P.  E.  Co.  v.  Los  Angeles  Traction  Co.,  129  Cal.  301, 

61  P.   937 711 

Maine  v.  Howell,  7  Ga.  App.  311,  66  S.  E.  804 41.5,  417 

Malsby  v.  Young,   104  Ga.  205,  30  S.   E.  854 829,  830 

Malzer  v.  Schisler,  67  Ore.  356,   136  P.   14 405 

Manchester  S.  C.  Co.  v.  Manchester  R.  Co.,  2  Ch.  Div.  37,  70  L.  J. 

Ch.  468,  84  L.  T.  Rep.   (N.  S.)   436,  17  T.  L.  R.  410,  49  Wkly. 

Rep.  418 211,  515,  908 

Manning  v.  Ayera,  77  Fed.  690,  23  C.  C.  A.   405 1122 

Mansfield  V.  Hodgdon,   147   Mass.   304,   17   N.   E.   .544 

207,  214,  332,  868,  924,  926,  928,  1229,  1242 

Manton  v.  Ray,  18  R.  L  672,  29  Atl.  998,  49  A.  S.  R.   811 1244 

Marble  Co.  v.  Ripley,   10  Wall.   339,   19  L.  Ed.  955 330 

Margraf  v.  Muir,  57  N.  Y.   155 1118 


752  LAW  OF   OPTION   CONTRACTS 

Sections 

Marie  v.  Garrison,  83  N.  Y.  14 1215 

Marino  v.  Williams,  30  Nev.   360,  96  P.   1073 802,  835,  1212 

Marks  v.  Gates,  154  Fed.  481,  83  C.  C.  A.  321,  12  Ann.  Cas.  120..  1248 

Marsh  t,  Cavanaugh,  15  Wash.  282,  46  P.   239 1118 

Marsh  v.  Lott,  8  Cal.  App.  384,  97  P.  163.  .326,  703,  868,  924,  1204,  1248 

Marsh  v.  Lott,   156   Cal.   643,   105   P.   968 1247,  1250,  1252 

Marshall  v.  Ferguson,  23  Cal.  65 854 

Marshall  v.  Lynn,  6  Mees.  &  W.  109 409 

Marske  v.  Willard,  169  HI.  276,  48  N.  E.  290..  123,  211,  214,  402,  908 
Marthinson  v.  King,  150  Fed.  48,  82  C.  C.  A.  360.  .301,  515,  1209,  1234 
Martin  v.  Morgan,  87  Cal.  203,  25  P.  350,  22  A.  S.  R.  240 

109,   862,  920,   940 

Martin  v.  Stone,  15  Cal.  App.  174,  113  P.  706 1252 

Martin  v.  Wilson,  24  Idaho  353,   134  P.  532 106,  110,  205 

Martyn  v.  Hitchings,  192  Mass.  71,  78  N.  E.  380 124 

Marx  V.  Oliver,  246  Dl.  316,  92  N.  E.  864 939 

Maryott  v.  Swaine,  28  N.  J.  Eq.  589 215 

Mason  v.  Caldwell,  10  HI.  196,  48  Am.  Dee.  330 109 

Mason  v.  Decker,  72  N.  Y.  595,  28  Am.  Eep.  190.. 215,  217,  1105,  1119 

Mason  v.  Luce,  116  Cal.  232,  48  P.  72 121 

Mason  v.  Payne,  47   Mo.   517 812,  852,  868,  1244 

Master  v.  Roberts,  224  Pa.  342,  90  Atl.  735 1250 

Master  v.  Willoughby,  2  Bro.  P.  C.  244,  1  Eng.  Reprint  919 849 

Matheny  v.  Stewart,  108  Mo.  73,  17  S.  W.  1014 1118 

Mathews  Slate  Co.  v.  New  Empire  Slate  Co.,  122  Fed.  972 

113,  321,  332,  703,  717,  932,  1123,  1209,  1234,  1237 

Matson  v.  Scofield,  27   Wis.  675 847 

Matthes  v.  Wier,   (Del.  Ch.)   84  Atl.  878 

419,   1203,   1204,   1207,   1209,  1237 

Matthews  v.  Matthews,  154  N.  Y.  288,  48  N.  E.  531 419 

Matzger  v.  Page,  62  Wash.  170,  113  P.  254 121 

Maughlin  v.  Perry,   35   Md.   352 812,  937,  1228,  1244,  1248 

May  V.  Getty,  140  N.  C.  310,  53  S.  E.  75 710,  1248 

Mayer  v.  Child,  47  Cal.  142 403 

Mayger  v.  Cruse,  5  Mont.  485,  6  P.  333 419 

Maynard  v.  Brown,  41  Mich.  298,  2  N.  W.  30 407,  414,  1235 

Mayo  V.  Dover  etc.  Fire  Co.,  96  Me.  539,  53  Atl.  62 116 

Mayo  V.  Wahlgreen,  9  Colo.  App.  506,  50  P.  40 609 

Mayo  H.  &  Co.  v.  Phil.  T.  M.  Co.,  105  Va.  486,  53  S.  E.  967 117 

Meaney  v.  Way,  95  N.  Y.  S.  745,  108  App.  Div.  290 1242 

Meek  v.  Hurst,  223  Mo.  688,   122   S.  W.   1022 114,  217,  1245 

Meidling  v.  Trefz,  48  N.  J.  Eq.  638,  23  Atl.  824 

710,   862,   1204,  1248,  1249,   1250 

Menger  v.  Ward,  87  Tex.  622,  30  S.  W.   853 510,  604 

Menzel  v.  Primm,  6  Cal.  App.  204,  91  P.   754 108,  1002 

Mercer  El.  Mfg.  Co.  v.  Conn.  El.  Mfg.  Co.,  87  Conn.  691,  89  Atl. 

909 815,  818,  819 


TABLE  OF  CASES  753 

Sections 

Merchants     Coal  Co.  v.  Billmeyer,  54  W.  Va.  1,  46  S.  E.  120 417 

Merk  v.  Boweiy  Mining  Co.,  31  Mont.  298,  78  P.  519 860,  920,  1124 

Merrill  v.  Hurley,  6  S.  D.  592,  62  N.  W.  958 120 

Merritt  v.  Joyce,  117  Minn.  235,  135  N.  W.  820 202,  860,  868,  828 

Mers  V.  Franklin   Ins.   Co.,   68   Mo.   127 315,  511,  513,  1224,  1230 

Mershon  v.  Williams,  62  N.  J.  L.  779,  42  Atl.  778 822,  834,  837 

Metropolitan  Exhibition  Co.  v.  Ewing,  42  Fed.  198,  7  L.  R.  A.  381 .  .    117 

Meyer  v.  Jenkins,  80  Ark.  209,  96  S.  W.  991 211,  1225 

MeyneU  v.  Surtees,  3  Sm.  &  Giff.  101,  65  Eng.  Reprint  581,  1  Jur. 

(N.  S.)   737,  25  L.  J.  Ch.  257,  3  Wkly.  Rep.  535 602 

Michigan  Cent.  R.  Co.  v.  Ferguson,  162  Mich.  220,  127  N.  W.  320 .  .   502 

Midland  Nat'l  Bank  v.  Schoen,  123  Mo.  650,  27  S.  W.  547 806a 

MUes  V.  Edsall,  7  Mont.  185,  14  P.  701 508 

Millard  v.  Martin,  28  R.  I.  494,  68  Atl.  420 515,  607,  838,  1006 

MiUer  v.  Cameron,  45  N.  J.  Eq.  95,   15  Atl.  842,  1  L.  R.  A.  554 

407,  417,  1002,  1231,  1237,  1244 

Miller  v.  Citizens  etc.  Ass'n,  50  Ind.  App.   132,  98  N.  E.  70 113 

Miller  v.  Gray,  29  Tex.  Civ.  App.  183,  68  S.  W.  517 207,  1243 

Miller  v.  Jones,  68  W.  Va.  526,  71  S.  E.  248,  36  L.  R.  A.  (N.  S.) 

408 1251 

Miller  v.  Louisville  etc.  R.  Co.,  83  Ala.  274,  4  So.  842,  3  A.  S.  R. 

722   114 

Miller  v.  St.  Paul  F.  &  M.  Ins.  Co.,  26  S.  D.  454,  128  N.  W.  609. .   122 

Miller  &  Brown,  In  re,  135  Fed.  868 508,  709 

Mills  V.  Haywood,  L.  R.  6  Ch.  Div.  196 827,  914 

Milmoe  v.  Murphy,  65  N.  J.  Eq.  767,  56  Atl.  292 710,  1247,  1254 

Milnes  v.  Gery,  14  Ves.  400 1212,  1213 

Milwaukee  Gold  Min.  Co.  v.  Tomkins-Cristy  Hardware  Co.,  26  Colo. 

App.  155,  141  P.  527 113,  509 

Milwaukee  Mech.  Ins.  Co.  v.  Rhea,  123  Fed.  9,  60  C,  C.  A.  103..   511 

Mineral  Dev.  Co.  v.  Hall,  (Ky.)  115  S.  W.  230 207,  1243 

Minneapolis  &  St.  L.  Ry.  Co.  v.  Columbus  Rolling  Mill  Co.,  119  U.  S. 

149,  30  L.  Ed.  376,  7  Sup.  Ct.  168.. 704,  707,  838,  856,  871.  1103 
Minn.  L.  Co.  v.  White  Breast  Coal  Co.,  160  HI.  85,  43  N.  E.  774, 

31  L.  R.  A.  529 311 

Mitchel  V.  Gray,  8  Cal.  App.  423,  97  P.  160 114,  703 

MitcheU  v.  Henderson,  37  Mont.  515,  97  P.  942 419 

Mitchell  V.  Taylor,  27  Ore.  377,  41  P.  119 601 

Mix  V.  Balduc,  78  HI.  215 312,  913,  932 

Mobley  v.  Lott,  127  Ga.  572,  56  S.  E.  637 419,  1118 

Moench  v.  Hower,  137  Iowa  621,   115   N.  W.   229 302,  853 

Moffat  Coal  Co.  v.  Miller,  173   HI.  App.  408 330 

Mohn  V.  Mohn,  148  Iowa  288,  126  N.  W.   1127 108,  606 

Mohr  V.  Mies6n,  47   Minn.   228,   49   N.   W.   862 216 

Moise  V.  Rock  Springs  Distilling  Company,  79  Neb.  124,  112  N.  W. 

372 107,  322,  703,  909 

48 — Option  Contracts. 


754  LAW   OP   OPTION    CONTRACTS 

Sections 
Moline  Plow  Co.  v.  Webb,  141  U.  S.  61G,  33  L.  Ed.  879,  12  S.  Ct. 

100   120 

Monahan  v.  Allen,  47   Mont.   75,  130  P.   768 209,  210,  215,  837 

Monarcli  P.  C.  Co.  v.  Washburn,  89  Kan.  874,  133  P.   156 1244 

Monihon  v.  Wakelin,  6  Ariz.  225,  56  P.  735.. 321,  864,  938,  1211,  1253 
Monmouth  Co.  El.  Co.  v.  Consolidated  Gas  Co.  of  N.  J.,  83  N.  J.  L. 

53,  83  Atl.  900 852 

Monongah  Coal  etc.  Co.  v.  Fleming,  42  W.  Va.  538,  26  S.  E.  201 

108,   407,  417 

Montgomery  v.  De  Picot,  153  Cal.  509,  96  P.  305 912 

Montgomery  v.  Hamilton,  76  Ind.  362,  40  Am.  Kep.  250 834 

Montgomery  v.  Hundley,  205   Mo.   138,   103   S.  W.   527 

101,  103,  205,  502 

Montgomery  v.  Marshall  Co.,  152  Iowa  161,  129  N.  W.  329 506 

Montgomery  v.  Waldeck,  2  Alaska  581 101,  417,  704,  1101,  1103 

Montgomery  Gaslight  Co.  v.  City,  87  Ala.  245,  6  So.  113,  4  L.  R.  A. 

616 116,  710,  851,  1212 

Moore  v.  Allen,  109  Minn.  139,  123  N.  W.  292 107,  707 

Moore  v.  Beiseker,  147  Fed.  367,  77  C.  C.  A.  545 

712,  909,  929,  932,  1008 

Moore  v.  Bevier,  60  Minn.  240,  62  N.  W.  281 903 

Moore  v.  Detroit  L.  Wks.,  14  Mich.  266 319 

Moore  v.  Foley,  6  Ves.  Jun.  232,  31  Eng.  Reprint  1027 124 

Moore  v.  Pierson,  6  Iowa  279,  71  Am.  Dec.  409 818 

Moore  v.  Vosburgh,  72  N.  Y.  S.  696,  66  App.  Div.  223 404 

Moorefield  v.  Fidelity  Mut.  L.  Ins.  Co.,  135  Ga.  186,  69  S.  E.  119.  . .    122 

Morgan  v.  Bouse,  53  Mo.  219 1241 

Morgan  v.  Eaton,  59  Fla.  562,  52  So.  305 1218 

Morgan  v.  Edwards,  53  Wis.  599,  11  N.  W.  21,  40  Am.  Rep.  781. . .   120 
Morgan  v.  Wickliffe,   110   Ky.   215,   61   S.   W.   13,   22   Ky.  L.   Rep. 

1648    419 

Morgan  County  Coal  Co.  v.  Halderman,  254  Mo.  596,  163  S.  W.  828.  .    712 
Morrell  v.  Studd,   83  L.  J.  Ch.   114,    (1913)    2  Ch.   648,   109  L.   T. 

628 419,  869 

Morris  v.  Hoyt,  11  Mich.  9 1240 

Morris  v.  Lagerfelt,  103  Ala.  608,  15  So.  895 109,  319 

Morrisey  v.  Strom,  57  Wash.  487,  107  P.  191 1244 

Morrison  v.  Rossignol,  5  Cal.   65 210,  223 

Morrissey  v.  Broomal,  37  Neb.  766,  56  N.  W.  383 117,  216 

Morse  v.  Bellows,  7  N.  H.  549,  28  Am.  Dec.  372 856 

Morse  v.  Douglass,  99  N.  Y.  S.  392,  112  App.  Div.  798 403 

Morton  v.  Nichols,  12  Brit.  Col.  9 862 

Moses  V.  McClain,   82   Ala.   370,   2   So.   741 

207,  407,  416,  1206,  1225,  1243 

Moses  V.  Scott,  84  Ala.  608,  4  So.  742 215 

Moss  &  Raley  v.  Wren,   (Tex.  Civ.  App.)   120  S.  W.  847,  reversing 

113  S.  W.  739 109 


TABLE  OF  CASES  '^^^ 

Sections 

Mossie  V.  Cyrus,  61  Ore.  17,  119  P.  485 

107   202,  301,  303,  323,  333,  401,  406,  703.  704,  707,  856,  857,  904 

Moulton  V.  Warren  Mfg.  Co.,  81  Minn.  259,  83  N.  W.  1082 1210 

Mound  Mines  Co.  v.  Hawthorne,  173  Fed.  882,  97  C.  C.  A.  394.  . .  .   109 

Moxley  's  Adm  'rs  v.  Moxley,  59  Ky.  309 •  •  •   856 

Moyses  v.  Hewitt,  20  Idaho  311,  118  P.  839 515,  609 

Mueller  y.  Nortmann,  116  Wis.  468,  93  N.  W.  538,  96  A.  S.  R.  997 

326    703,  709,  801,  812,  814,  815,  817,  820,  903,  904,  905 
Mueller  v.  Pels,  94  HI.  App.  353,  affd.  192  HI.  76,  61  N.  E.  472...   849 

Mullaly  V.  Holden,   123   Mass.   583 '*1^ 

Mullen  V.  Cook,  69  W.  Va.  456,  71  S.  E.  566 1118 

Mullen  V.  Gooding  I.  &  H.  Co.,  20  Idaho  348,  118  P.  666 121,  1118 

Mundy's  Ex'rs  v.  Garland,  116  Va.  922,  83  S.  E.  491 1002 

Municipality  No.  1  v.  New  Orleans,  5  La.  Ann.  761 113 

Murphy  V.  Anderson,  128  Minn.  106,  150  N.  W.  387.... 210,  321,  1253 

Murphy  v.  Hussey,   117  La.   390,   41   So.   692 

^      217,  321,  908,  909,  924,  1253 

Murphy  T.  &  Co.  v.  Reid,  125  Ky.  585,  101  S.  W.  964,  31  Ky.  L. 

Rep.  176,  10  L.  R.  A.    (N.  S.)    195 

. 324,  327,  331,  703,  871,  1211,  1218,  1221,  1224 

Murray  v.  Barnhart,   117  La.   1023,  42  So.  489 329 

Murray  v.  Ellis,   112  Pa.  485,  3   Atl.   845 1116 

Mutual  Life  Ins.  Co.  v.  Stephens,  214  N.  Y.  488,  108  N.  E.  856.  . 

1212, 1222 

Myers  v.  Metzger,  61  N.  J.  Eq.  522,  48   Atl.   1113 

102,  103,  122,  211,  301,  315,  317,  703,  846,  855,  1104 

Myers  v.  J.  J.   Stone  &   Son,    128   Iowa    10,    102   N.  W.   507,   111 

A.  S.  B.  180,  5  Ann.  Cas.  912 601,  604,  608,  802,  827 


N 

Nagel  V.  Cohen,  112  N.  Y.  S.   1066 107,  322,  403 

Nance  v.  Polk,   (Ark.)   171  S.  W.  1195 ^O-* 

Napier  v.  Dariington,   70   Pa.   64 101,  601,  602,  607,  804 

Nash  V.  Larson,  80  Minn.  458,  83  N.  W.  451,  81  A.  S.  R.  272.  .  .  .    119 
National  Life  Ins.  Co.  v.  Butler,  61   Neb.   449,   85  N.  W.  437,   87 

A.  S.  R.  462 ^^^ 

National  Oil  etc.  Co.  v.  Teel,  95  Tex.  586,  68  S.  W.  979 

301,  314,  331,  502,  609,  610 

National  Refining  Co.'  V.  Miller,  1  S.  D.  548,  47  N.  W.  962 703 

Naylor  v.  Parker,    (Tex.  Civ.   App.)    139   S.   W.   93 

109,  206,  1104,  1117,  1118,  1215,  1218,  1236,  1237,  1238,  1247 

Neal  V    Jefferson,  212  Mass.  517,  99  N.  E.  334,  Ann.  Cas.  1913D, 

2Q5  609,   810,  1118 

Neeson  v.  Smith,"  47  Wash.  386,  92  P.  131 107,  115,  862 

Neff  V.  Elder,  84  Ark.  277,  105  S.  W.  260 805 


756  LAW   OF   OPTION    CONTRACTS 

Sections 
Neff,  In  re,  157  Fed.  57,  84  C.  C.  A.  561,  28  L.  R.  A.  (N.  8.)  349.  . 

702,  709 

Neill  V.  Hitchman,  201  Pa.  207,  50  Atl.  987 712,  870,  1253 

Neldon  v.  Smith,  36  N.  J.  L.  148 410 

Nelson  v.  Hirschberg,   70   Ark.   39,   66   S.   W.   347 1119 

Nelson  T.  Stephens,   107   Wis.   136,   82   N.   W.   163 

108,  502,  703,  707,  849,  862,  932,  1112 

Neppach  v.  Oregon  &  C.  R.  Co.,  46  Ore.  374,  80  P.  482,  7  Ann.  Cas. 

1035 412,  1118 

Neves  v.  Scott,  50  U.  S.  196,  13  L.  Ed.  102,  s.  c.  54  U.  S.  268,  14 

L.   Ed.   140 1238 

Nevitt  V.  McMurray,  14  Ont.  App.  126 510,  862 

Newbern  Banking  Co.  v.  Duffy,  153  N.  C.  62,  68  S.  E.  915 122 

Newberger  v.  Adams,   92   Ky.   26,   17   S.   W.   162,   13   Ky.   L.   Rep. 

339 415,  417 

Newby  v.  Rogers,   40   Ind.   9 417 

Newell  V.  Lamping,  45  Wash.  304,  88  P.  195 108,  123 

Newell's  Appeal,  In  re,  100  Pa.  513 871,  1211 

New  England  Box  Co.  v.  Prentiss,  75  N.  H.  246,  72  Atl.  826 

301,  703,  856,  1204,  1209,  1210,  1244 

New  England  Trust  Co.  v.  Abbott,  162  Mass.  148,  38  N.  E.  432, 

27  L.  R.  A.  271 1210 

New  Haven  Trust  Co.  v.  Gaff ney,  73  Conn.  480,  47  Atl.  760 830 

Newlean  v.  Olson,  22  Neb.  717,  36  N.  W.  155,  3  A.  S.  R.  286 119 

Newlin  v.  Hoyt,  91  Minn.  409,  98  N.  W.  323 407,  414 

Newport  Waterworks  v.  Sisson,  18  R.  I.  411,  28  Atl.  336 517 

Newton  v.  Dickson,  53  Tex.  Civ.  App.  429,  116  S.  W.  143 109 

Newton  v.  Newton,  11  R.  I.  390,  23  Am.  Rep.  476... 502,  606,  709,  808 

Nicholas,  In  re,  122  Fed.  299 709 

Noble  V.  Mann,  32  Ky.  L.  Rep.  30,  105  S.  W.  152... 331,  703,  704,  705 

Nobles  V.  L'Engle,  61  Fla.  696,  55  So.  839 1248 

Noe  V.  Saylor,  143  Ky.  254,  136  S.  W.  209 107,  857,  871 

Noland  v.  Cincinnati  C.  Co.,  26  Ky.  L.  Rep.  837,  82  S.  W.  627 417 

Nonantum  Worsted  Co.  v.  North  Adams  Mfg.  Co.,  156  Mass.  331, 

31  N.  E.  293 123 

Norris  v.  Fox,  45  Fed.  406 1218 

North  V.  Forest,   15   Conn.   400 403 

North  Ave.  I.  Co.  v.  City  of  Baltimore,  102  Md.  475,  63  Atl.  115.  .  .1005 

Northern  Assur.  Co.  v.  Stout,  16  Cal.  App.  548,  117  P.  617 931 

Northern  Cent.  R.  Co.  v.  Walworth,  193  Pa.  207,  44  AtL  253,  74 

A.  S.  R.  683 1242 

North  Stockton  etc.  Co.  v.  Fischer,  138  Cal.   100,  70  P.  1082,  71 

P.   438 1116 

Northwestern  National   Bank   v.   Ramsey,   96   Wis.   544,   71   N.   W, 

939    1116 

Northwestern  W.  &  F.  Co.  v.  Milwaukee  El.  St.  Ry.  Co.,  94  Wis. 

603,  69  N.  W.  371 107 


TABLE  OF  CASES  757 

Sections 

Nott  V.  Owen,  86  Me.  98,  29  Atl.  943,  41  A.  S.  R.  525 805,  811 

Noyes  v.  Clark,  7  Paige  (N.  Y.)  179,  32  Am.  Dec.  620 810,  903 

Noyes  v.  Marsh,   123   Mass.   286 1210 

Noyes  v.  Phillips,  60  N.  Y.  408 1111 

Noyes  v.  ScWegel,  9  Cal.  App.  516,  99  P.  726 928,  931,  932 

Nunez  v.  Morgan,  77  Cal.  427,  19  P.  753 419 

Nutmeg  etc.  Corp,  v.  Fiske,  81  Conn.  463,  71  Atl.  499 871 


o 

Oatman  v.  Walker,  33  Me.  67 1116 

Obdert  v.  Marquet,  163  Fed.  892 1254 

Ober  V.  Brooks,  162  Mass.  102,  38  N.  E.  429 708,  715 

Obery  v.  Lander,    179    Mass.    125,   60   N,   E.   378 

822,  823,  872,  1101,  1119 

O'Brien  v.   Boland,   166   Mass.  481,  44  N.  E.   602 

324,  332,  703,  1229,  1237 

Oceanic  G.  M.  Co.  v.  Steinfeld,  16  Ariz.  571,  147  P.  717 509 

Oceanic  Steam  Nav.  Co.  v.  Sutherberry,  L.  R.  16  Ch.  Div.  236,  15 

L.  J.  Ch.  308,  43  L.  T.  743,  29  W.  R.  813 203 

O'Connor  v.  Harrison,   132   HI.   App.   264 122,  321,  703,  941 

O'Donnell  v.  Wing  &  Son,  121  Ga.  717,  49  S.  E.  720 507,  830 

Ogle  V.  Hubbel,  1  Cal.  App.  357,  82  P.  217 709,  908 

Oland  V.  McNeil,  32  Can.  Sup.  Ct.  23 515 

Olcese  V.  Mobile  Fruit  etc.  Co.,  211  El.  539,  71  N.  E.  1084 1119 

Old  Colony  R.  Corp.  v.  Evans,  72  Mass.   (6  Gray)   25,  66  Am.  Dec. 

394    1117 

Olds  V.  Little  Horse  Creek  Cattle  Co.,  22  Wyo.  336,  140  P.  1004.. 

502,  506 

Oliver  v.  Oregon  Sugar  Co.,  42  Ore.  276,  70  P.  902 123 

OlUnger  v.  Bruce  Dry  Dock  Co.,  158  Ala.  173,  48  So.  482 1108 

Olsen  y.  Northern  S.  S.  Co.,  70  Wash.  493,  127  P.  112 

814,  815,  829,   830,  849,  928 

Olston  V.  Oregon  Water  Power  &  Ry.  Co.,  52  Ore.  343,  96  P.  1095.  .   333 

Omer  v.  Farlow,   46   HI.   App.   122 814,  820 

O'Neill  v.  Risinger,  77  Kan.  63,  93  P.  340 105,  109,  871 

Orby  V.  Trigg,  9  Mod.  2,  88  Eng.  Reprint  276 1204 

Oregon  &  W.  R.  Co.  v.  Elliott  B.  M.  &  L.  Co.,  70  Wash.  148,  126 

P.   406 408 

Orton  V.  Noonan,   27   Wis.   272 834 

Orvis  V.  Waite,  58   111.  App.  504 829 

Osgood  V.  Skinner,  211   111.   229,  71  N.  E.  869,  affg.  s.  c.   Ill   HI. 

App.  606 216,  404,  921,  926,  935 

Ouderkirk  v.  Bayless  Pulp  &  Paper  Co.,  199  N.  Y.  366,  92  N.  E. 

798,  affg.  112  N.  Y.  S.  1139,  128  App.  Div.  914 515 


758  LAW   OF    OPTION    CONTRACTS 

Sections 
Over  T.  Byram  Foundry  Co.,  37  Ind.  App.  452,  77  N.  E,  302,  117 

A.   S.   R.   327 117 

Overall  v.  Madisonville,   125  Ky.  684,   102   S.   W.   278,  31   Ky.  L. 

Eep.  278,  12  L.  R.  A.   (N.  S.)   433 102,  116,  215,  321,  501 

Owens  T.  Corsican  Pet.   Co.,    (Tex.   Civ.   App.)    169  S.  W.   192.... 

113,   223,  717 

Owens  V.  Williams,  130  N.  C.  165,  41  S.  E.  93 115 

Owensboro   Wagon   Co.   v.    H.   L.    Riggins    &    Co.,    151    N.   C.    303, 

66  S.  E.  126 101,  830 

O.  W.  Kerr  r.  Nygren,  114  Minn.  268,  130  N.  W.  1112 1106,  1116 


Pace  V.  CUne,    (Colo.)    147  P.  672 205,  1204 

Packer  v.  Steward,   34   Vt.   27 411,  412 

Paddell  v.  Janes,   145  N.  Y.  S.  868 715,  930 

Paddock  v.  Davenport,  107  N.  C.  710,  12  S.  E.  464 

823,  871,  1209,  1210 

Page  V.  Hughes,  41  Ky.   (2  B.  Mon.)   439 812,  864 

Page  V.  Martin,  46   N.  J.   Eq.   585,   20   Atl.  46 

101,   814,   1203,   1211,   1231,  1248 

Page  V.  Shainwald,   169  N.   Y.   246,   62   N.   E.  356 

829,  850,  859,  871,  872 

Paine  v.  Copper  etc.  Co.,  13  Ariz.  406,   114  P.   964 122 

Palmer  v.  Clark,  52  Wash.  345,  100  P.   749 924,  928,  1120 

Palmer  v.  Gould,  144  N.  Y.  671,  39  N.  E.  378,  381 1222 

Paper  Co.,  In  re,  147  Fed.  858 709 

Park  V.  Whitney,  148  Mass.  278,  19  N.  E.   161 101,  857,  858 

Parker  v.  Gortatowsky,  127  Ga.  560,  56  S.  E.  846 515,  825,  1123 

Parker  v.  Lincoln,   12   Mass.    16 903 

Parker  v.  McAllister,   14  Ind.   12 850 

Parker  v.  Seeley,  56  N.  J.  Eq.  110,  38  Atl.  280 709,  823 

Parkhurst  v.  Van  Cortlandt,   1  Johns.  Ch.   282,   reversed  14  Johns. 

15,  7  Am.  Dec.  427 1211,  1222 

Parks  V.  Griffith,  123  Md.  233,  91  Atl.  581 311 

Parkside  Realty  Co.  v.  MacDonald,  166  Cal.  426,  137  P.  21 810,  903 

Parmalee  v.  Kregelo,  143  Ind.  2,  42  N.  E.  460 1253 

Patchin  v.  Swift,   21   Vt.   292 118 

Paterson  v.  Houghton,  49  Manitoba   168 707,  849 

Paton  V.  Baker,  62  Iowa  704,  15  N.  W.  586 806a 

Patrick  v.  Bowman,  149  U.  S.  411,  37  L.  Ed.  790,  13  Sup.  Ct.  811 704 

Patterson  v.  Cunningham,   12   Me.   506 402 

Patterson  v.  Farmington  St.  Ry.  Co.,  76  Conn.  628,  57  Atl.  853.. 

101,  102,  215,  334,  501,  502,  517,  849,  856,  859,  862,  1244 

Patterson  v.  Plummer,  10  N.  D.  95,  86  N.  W.  Ill 1119 

Pattillo  V.  .Jones,  113  Ga.  330,  38  S.  E.  745 318 


TABLE  OP  CASES  759 

Sections 
Pause  V.  City  of  Atlanta,  98  Ga.  92,  26  S.  E.  489,  58  A.  S.  R.  290.  .   209 

Payne  v.  Melton,  67  S.  C.  233,  45  S.  E.   154 702 

Peabody  v.  Fellows,   177  Mass.   290,   58   N.  E.  1019 405 

Peacock  v.  Deweese,   73   Ga.   570 313,  1103,  1126,   1235 

Pearce  v.  Dill,  149  Ind.  136,  48  N.  E.  788 216 

Pearce  v.  Rice,  142  U.  S.  28,  35  L.  Ed.  925,  12  S.  Ct.  130 216 

Pearce  v.  Turner,   150   HI.   116,  36   N.   E.   962 101,  859,  1103 

Pearis  v.  Covillaud,  6  Cal.  617,  65  Am.  Dec.  543 805,  811 

Pearmain  v.  Mass.  H.  L.  Ins.  Co.,  206  Mass.  377,  92  N.  E.  497 120 

Pearson  V.  Home,    139   Ga.   453,   77   S.   E.   387 

204,  211,  214,  222,  406,  802,  934,  1104 

Pearson  v.  Millard,  150  N.  C.  303,  63  S.  E.   1053 

321,  604,  607,  703,  805,  806a,  824,  838,  1203 

Peck  V.  Freese,   101   Mich.   321,   59   N.   W.   600 703 

Peckham  v.  Balch,  49  Mich.  179,  13  N.  W.  506 419,  1207 

Peehl  V.  Bambalek,  99  Wis.   62,  74  N.  W.   545 834 

Peevey  v.  Haughton,    72    Miss.    918,    17    So.    378,    18    So.    357,    48 

A.  S.  R.  592 407,  416,  417,  1206,  1237 

Pegg  V.  Wisden,  16  Beav.  239,  16  Jur.  1105,  51  Eng.  Reprint  770 .  . 

862,  868,  920,  932 

Peirson  v.  Corporation,  11  Brit.  Col.  139 849 

Penn  Match  Co.  v.  Hapgood,  141  Mass.  145,  7  N.  E.  22 313,  332 

Penn  Min.  Co.  v.  Martin,   210  Pa.   53,  59   Atl.  436 

514,  871,  915,  916,  1250 

Penn  Min.  Co.  v.  Smith,  207    Pa.    210,    56    Atl.    426 

839,  915,  1002,  1006 

Penn  Min.  Co.  v.  Smith,  210  Pa.  49,  59  Atl.  316 

514,  712,  871,  915,  1002 

Penn  Min.  Co.  v.  Thomas,  204  Pa.  325,  54  Atl.  101 912 

People  V.  Commercial  Life  Ins.  Co.,  247  111.  92,  93   N.  E.  90 215 

People  V.  Marshall,  8   Cal.  51 206 

People's  Fur.  &  C.  Co.  v.  Crosby,  57  Neb.  282,  77  N.  W.  658,  73 

A.  S.  R.  504 912 

People's  St.  Ry.  Co.  v.  Spencer,  156  Pa.  85,  27  Atl.  113,  36  A.  S.  R. 

22 503,  512 

Percifield  v.  Black,  132  Ind.  384,  31  N.  E.  955 419 

Perkins  v.  Hadsell,  50   HI.  216 

305,  407,  602,  603,  804,  827,  871,  1227.  1237 

Perrigo  v.  City  of  Milwaukee,  92  Wis.  236,  65  N.  W.  1025 

102,  .501,  502,  506 

Perry  v.  Fisher,  30  Ind.  App.  261,  65  N.  E.  935 120 

Perry  v.  Paschal,   103   Ga.   134,   29   S.   E.   703 

407,  416,  519,  602,  603,  604,  802,  1206,  1227,  1235,  1237.  1241 

Pershing  Y.  Feinberg,   203   Pa.   144,  52   Atl.   22 912 

Peters  v.  Cooper,   95   Mich.   191,  54  N.  W.  694 1119 

Peters  v.  Delapaine,   49   N.   Y.   362 1252 


760  LAW   OF   OPTION    CONTRACTS 

Sections 
Peterson  T,  Chase,   115  Wis.   239,   91   N.  W.  687 

101,  215,  315,   1218,  1234,  1249,  1254 

Peterson  v.  Eankin,  161  Iowa  431,  143  N.  W.  418... 413,  849,  859,  861 

Pettibone  v.  Moore,  27  N.  Y.  S.  455,  75  Hun.  461 415,  417 

PettingiU,  In  re,  137  Fed.  147 709 

Pettit  V.  Hamlyn,    43    Wis.    314 419 

Pflum  V.  Spencer,  108  N.  Y.  S.  344,  123  App.  Div.  742 113 

Plieby  V.  Mining  Co.,  10  Ariz.  88,  85  P.  952 515 

Phelan  v.  Neary,  22  S.  D.  265,  117  N.  W.  142 1214 

Phelps  V.  Davenport,  151  N.  C.  22,  65  S.  E.  459... 921,  930,  1002,  1003 
Phenix  Ins.  Co.  v.  Kerr,  129  Fed.  723,  64  C.  C.  A.  251,  66  L.  E.  A, 

569    511 

Philadelphia   Ball   Club   v.    Lajoie,   202    Pa.    210,   51    Atl.    973,    90 

A.  S.  K.  627,  58  L.  R.  A.  227 117 

Philadelphia  Sav.  Fund  Co.  v.  Lasher,  144  lU.  App.  653 121 

Phillips  V.  Cornelius,    (Miss.)    28    So.   871 118 

Phillips  V.  Herndon,  78  Tex.  378,  14  S.  W.  857,  22  A.  S.  B.  59 1118 

Phillips  V.  Holland,  149  Wis.  524,  136  N.  W.   191 411 

Pickering  v.  Cease,   79  HI.  328 216 

Pickett  V.  Green,  120  Ind.  584,  22  N.  E.  737 331 

Pierson  v.  Donham,   (Ind.  App.)   104  N.  E.  606 402 

Piggot  V.  Mason,  1  Paige   (N.  Y.)   412 213,  810,  1212 

Pittsburgh  Steel  Co.  v.  Wood,  109  Ark.  537,  160  S.  W.  519 122 

Pittsburgh  V.  P.  &  Bldg.  Brick  Co.  v.  Bailey,  76  Kan.  42,  90  P. 

803 101,  102,  110,  113,  122,  215,  326,  328 

Piatt  V.  Butcher,  112  Cal.  634,  44  P.  1060 410 

Poe  V.  Ulrey,  233  HI.  56,  84  N.  E,  46 328,  331 

Poehler  v.  Reese,  78  Minn.  71,  80  N.  W.  847 805,  902 

Pollard  V.  Sayre,  45  Colo.   195,  98  P.  816 113,  122,  123,  610 

Pollock  V.  Brookover,  60  W.  Va.  75,  53  S.  E.  795,  6  L.  R.  A.  (N.  S.) 

403 101, 

102,  215,  301,  703,  839,  848,  849,  871,  917,  1008,  1215,  1234,  1236 

Pollock  V.  Riddick,  161  Fed.  280 916,  917 

Pomeroy  v.  Newell,  102  N.  Y.  S.  1098,  117  App.  Div.  800 107 

Ponsford  v.  Hankey,  2  Giff.  604,  66  Eng.  Reprint  253 1244 

Pope  V.  Ansley  Realty  Co.,   (Tex.  Civ.  App.)    135  S.  W.  1103 106 

Pope  V.  Hoopes,  90  Fed.  451,  33  C.  C.  A.  595 217,  861,  1237,  1245 

Popp  V.  Swanke,  68  Wis.  364,  31  N.  W.  916 418,  419,  1207 

Porter  v.  Plymouth   Gold    Mining   Co.,   29   Mont.    347,    74   P.    938, 

101  A.  S.  R.  569 215,  853 

Porter  v.  Travis,  40   Ind.  556 1117 

Postal  Tel.  Cable  Co.  v.  Louisville  C.  S.  Oil  Co.,  140  Ky.  506,  131 

S.  W.  277 818 

Potomac  Mfg.  Co.  v.  Evans,  84  Va.  717,  6  S.  E.  2 121 

Potts  V.  Whitehead,  21  N.  J.  Eq.  55,  affd.  23  N.  J.  Eq.  512 

106,   122,   210,  819,   843,  848 

Powder  River  etc.  Co.  v.  Lamb,  38  Neb.  339,  56  N.  W.  1019 419 


TABLE  OF  CASES  761 

Sections 

Powell  V.  Eckler,  96  Mich.  538,  56  N.  W.  1 113,  502,  513,  823 

Powell  V.  Lovegrove,  8  DeG.  M.  &  G.  357,  2  Jur.   (N.  S.)   791,  44 

Eng.  Reprint  427 210,  1207 

Powell  V.  Plank,  141  Mo.  App.  406,  125  S.  W.  836 113 

Powers  V.  Myers,  25  Okl.  165,  105  P.  674 113,  1125 

Pratt  V.  Prouty,  104  Iowa  419,  73  N.  W.  1035,  65  A.  S.  R.  472 .  . 

122,   123,  806 

Pratt  V.  S.  Freman  &  Sons  Mfg.  Co.,  115  Wis.  648,  92  N.  W.  368. .  .1119 

Pray  v.  Mitchell,  60  Me.  430 403 

Preble  v.  Baldwin,   60   Mass.    (6  Gush.)   549 1117 

Preston  v.  Walsh,  10  Fed.  315 1242 

Price  V.  Atkinson,  117  Mo.  App,  52,  94  S.  W.  816 214,  819 

Price  V.  Jones,  105  Ind.  543,  5  N.  E.  683,  55  Am.  Rep.  230 324 

Price  V.  Lloyd,  31  Utah  86,  86  P.  767,  8  L.  R.  A.   (N.  S.)   870 1207 

Prichard  v.  MulhaU,   127   Iowa  545,   103  N.  W.   774,   4  Ann.   Cas. 

789 1116,   1117 

Primm  v.  Wise,  126  Iowa  528,  102  N.  W.  427 712,  912 

Prince  v.  Robinson's  Adm'rs,   14  Fed.   631 709,  812,  905 

Pringle  v.  Des  Moines  Ins.  Co.,  107  Iowa  742,  77  N.  W.  521.  .  .109,  511 
Prior  V.  Hilton  &  D.  Lumber  Co.,  141  Ga.  117,  80  S.  E.  559 

102,  103,  209,  301,  703,  705 

Pritchard  v.  McLeod,  205  Fed.  24,  123  C.  C.  A.  332 856 

Probst  V.  Rochester  S.  L.  Co.,  171  N.  Y.  584,  64  N.  E.  504 

804,   816,  835 

Prout  V.  Roby,  15  Wall.  (U.  S.)  471,  21  L.  Ed.  58 852 

Provident  G.  M.  Co.  v.  Manhattan  Securities  Co.,  168  Cal.  304,  142 

P.   884 108 

Provident  Life  etc.  Co.  v.  Mills,  91  Fed.  435 509 

Provident  Sav.  Life  Assur.  Soc.  v.  Georgia  Industrial  Co.,  124  Ga. 

399,  52  S.  E.  289 121 

Puffer  V.  Welch,  144  Wis.  506,  129  N.  W.  525,  Ann.  Cas.   1912A, 

1120    601 

Pumpelly  v.  Phelps,  40  N.  T.  59,  100  Am.  Dec.  463 1118 

Pursley  v.  Good,  94  Mo.  App.  382,  68  S.  W.  218..  101,  112,  1116,  1120 
Pyke  V.  Northwood,  1  Beav.  152,  48  Eng.  Reprint  897 1126 


Q 


Quick  V.  Wheeler,   78   N.   Y.   300 703 

Quigley  v.  King,   182   Mo.   App.    196,   168   S.   W.   285 

1101,  1103,  1121,  1122 

Quinby  v.  Gas   Co.,   140   Fed.    362 116 

Quinn  v.  Valiquette,   80  Vt.  434,  68  Atl.  515 834,  869 

Quinton  v.  Mulvane,  71  Kan.  687,  81  P.  486 1228 


762  LAW  OF   OPTION    CONTRACTS 

R 

Sections 

Race  V.  Groves,  43  N.  J.  Eq.  284,  7  Atl.  667 710 

Raddatz  v.  Florence  Inv.  Co.,  147  Wis.  636,  133  N.  W.  1100 

717,  817,  868,  869,  940 

Raddle  v.  Lindemann,    151    HI.   App.   441 101,  114 

Radell  v.  Sharlan,  66  Wis.  138,  28  N.  W.  136 122 

Raffety  v.  Schofield,  L.  R.   1   Ch.   937,  66  L.  J.  Ch.  448,   76  L.   T. 

Rep.    (N.  S.)   648,  45  Wkly.  Rep.  460 717,  847 

Raiche  v.  Morrison,  47  Mont.  127,  130  P.  1074 101,  315,  871 

Rampton  v.  Dobson,  156  Iowa  315,  136  N.  W.  682..  102,  502,  506,  871 

Ramsey  T.  Hessig  etc.  Co.,  32  Okl.  457,  122  P.  662 112 

Ramsey  v.  Walthan,   1  Mo.  395 118,  854 

Ramsey  v.  West,  31   Mo.   App.  676 110,  205,  716 

Randolph  V.  Wheeler,   182   Mo.   145,  81   S.  W.   419 1238 

Ranelagh  v.  Melton,  34  L.  J.  Ch.   227,   11  L.  T.  Rep.  409,  5  New 

Rep.  101,  13  Wkly.  Rep.  150,  62  Eng.  Reprint  627 849,  871,  914 

Rankin  v.  Rankin,  216  El.  132,  74  N.  E.  763 847,  909,  912 

Ranking  v.  Grupe,  36  Hun.   (N.  Y.)    481 403 

Ranlet  v.  Cook,  44  N.  H.  512,  84  Am.  Dee.  92 833 

Ransdel  v.  Moore,  153  Md.  393,  53  N.  E.  767,  53  L.  R.  A.  753 123 

Rapp  V.  Linebarger  &  Son,  149  Iowa  429,  128  N.  W.  555 122 

Rathbone  v.  Groh,   137  Mich.  373,   100  N.  W.  588 1204,  1209 

Rathbun  v.  Rathbun,    (N.   Y.)    8   Barb.   98 418 

Raymer  v.  Hobbs,  26  Cal.  App.  298,  146  P.  906 204,  702,  849 

Eea  V.  Holland,  48  Mich.  218,  12  N.  W.  167 1119 

Real  Estate  T.  I.  &  T.  Co.,  Appeal  of,  125  Pa.  549,  17  Atl.  450, 

11  A.  S.  R.  920 1236 

Rease  v.  Kittle,  56  W.  Va.  269,  49  S.  E.  150 

102,  317,  321,  324,  326,  502,  602, 
604,  605,  804,  917,  1103,  1202,  1234,  1237 

Rector  Provision  Co.  v.  Sauer,  69  Miss.  235,  13  So.  623 415 

Redhead  Bros.  v.  Wyoming  Cattle  Inv.  Co.,  126  Iowa  410,  102  N.  W. 

144    1119 

Redwine  v.  Hudman,  104  Tex.  21,  133  S.  W.  426.  .  .  .109,  118,  122,  1236 

Reed  v.  Crane,  89  Mo.   App.  670 419 

Reed  v.  Dougherty,  94  Ga.  661,  20  S.  E.  965 1116 

Reed  T.  Hickey,  13  Cal.  App.  136,  109  P.  38... 822,  823,  827,  872,  1111 

Reed  v.  John,   2   Daly    (N.   Y.)    213 820 

Rees  V.  Pellow,  97  Fed.  167,  38  C.  C.  A.  94 707,  857,  872 

Reeves  &  Co.  v.  Cress,  80  Minn.  466,  83  N.  W.  443 1119 

Reherd  's  Adm'r  v.  Clem,  86  Va.  374,  10  S.  E.  504 508 

Rehm-Zeiher  Co.  v.  F.  G.  Walker  Co.,  156  Ky.  6,  160  S.  W.  777.. 

307,  311,  822,  837 

Reich  V.  Dyer,  86  N.  Y.  S.  544,  91  App.  Div.  240 838 

Reld  v.  Alaska  Packing  Ass'n,  43  Ore.  429,  73  P.  337 406 

Reid  V.  Diamond  Plate-Glass  Co.,  85  Fed.  193,  29  C.  C.  A.  110 406 


TABLE  OF  CASES  763 

Sections 
Reigart  v.  Manufacturer's  Coal  &  Coke  Co.,  217  Mo.  142,  117  S.  W. 

61 320,   404,  406 

Reilly  v.  Steinhart,  146  N.  Y.  S.  534 301,  401 

Eemm  v.  Landon,  43  Ind.  App.  91,  86  N.  E.  973 402,  411,  835,  869 

Renoud  v.  Daskam,   34   Conn.    512 831,  833,  852 

Reuss  V.  Picksley,  L.  R.  1  Exch.  342,  12  Jur.  (N.  S.)   628,  35  L.  J. 

Ch.  218,  15  L.  T.  Rep.  25,  14  Wkly.  Rep.  924 415 

Rewrick  v.  Goldstone,  48  Cal.  554 854 

Reynard  v.  Arnold,  L.  R.  10  Ch.  386,  23  Wkly,  Rep,  804 512,  517 

Reynolds  v,  Boland,  202  Pa.  642,  52  Atl.   19 1204 

Reynolds  v.  Hooker,  76  Vt.  184,  56  Atl.  988 123,  822 

Reynolds  v.  O'Neil,  26   N.  J.   Eq.   223 109,  921,  930,  1003,  1231 

Rheinganz  v.  Smith,   161   Cal.   362,   119  P.   494,   Ann.   Cas.   1913B, 

1140    217 

Rice  V.  Gibbs,  33  Neb.  460,  50  N.  W.  436 311,  324,  326,  604,  1205 

Rice  V.  Gibbs,  40  Neb.  264,  58  N.  W.  724 604,  840,  902,  907 

Rice  V.  Lincoln  etc.  R.  Co.,  88  Neb.  307,  129  N.  W.  425 

122,  315,  317,  710,  1209,  1248 

Rich  V.  Milk,  20  Barb.   (N.  Y.)   616 119 

Richards  v.  Creighton,   (Tex.  Civ.  App.)    157  S.  W.  456... 1106 

Richards  v.  Daley,   116  Cal.   336,  48  P.   220 120 

Richards  v.  Edick,  17  Barb.    (N.  Y.)    260 1116 

Richards  v.  Green,  23  N.  J.  Eq.  536 918,  1231 

Richardson  v.  Coffman,  87  Iowa  121,  54  N.  W.  356 119 

Richardson  v.  Hardwick,   106  U.   S.   252,   27  L.   Ed.   145,   1   S.   Ct. 

213 123,  502,  707,  871,  913 

Richardson  v.  Harkness,  59  Wash.  474,  110  P.  9... 321,  827,  1208,  1212 

Richardson  v.  Planter's  Bank,  94  Va.  130,  26  S.  E.  413 123 

Ricker  v.  Moore,    77    Me.    292 1241 

Rider  v.  Gray,  10  Md.  282,  69  Am.  Dec.  135 210,  1248 

Righter  v.  Clark,  78  Conn.  9,  60  Atl.  741,  112  A.  S.  R.  84 1119 

Rindge  v.  Baker,  57  N.  Y.  209,  15  Am.  Rep.  475 1116 

Riner  v.  Husted's  Estate,  13  Colo.  App.  523,  58  P.  793 709 

Ringling  v.  Smith  River  Dev.  Co.,  48  Mont.  467,  138  P.  1098 116 

Ripley  v.  Waterworth,  7  Ves.  Jun.  425,  32  Eng.  Reprint  172 709 

Risch  V.  Burch,   175   Ind.  621,   95   N.  E.   123 328 

Rivers  v.  Oak  Lawn  Sugar  Co.,  52  La.  Ann.  762,  27  So.  118.  .  .101,  123 

Robbins  v.  Deverill,    20    Wis.    142 419 

Roberts  v.  Braffett,  33  Utah  51,  92  P.  789 862,  1203,  1250 

Roberts  v.  Norton,  66  Conn.  1,  33  Atl.  532 115,  913 

Roberts  v.  Wliite  River  Power  Co.,  30  Wash.  430,  70  P.  1104 108 

Robinson  v,  Easton  etc.  Co.,  93  Cal.  80,  28  P.  796,  27  A.  S.  R.  167.  .    114 

Robinson  v.  Gray,  90  Iowa  699,  57  N.  W.  614 119 

Robinson  v.  Perry,  21  Ga.  183,  68  Am.  Dec.  455 603,  607,  1241 

Robinson  v.  Robinson,   116   111.   250,  5   N.   E.   118 1242 

Roche  V.  Osborne,    (N.  J.   Eq.)    69  Atl.   176 904 

Roche  V.  Smith,  176  Mass.  595,  58  N.  E.  152,  51  L.  R.  A.  510 1118 


764  LAW   OF    OPTION    CONTRACTS 

Sections 
Rockland  etc.  Co.  v.  Leary,  203  N.  T.  469,  97  N.  E.  43,  Ann.  Gas. 

1913B,   62 207,  517,  606,  607,  709,  811,  812,  815,  930,  935,  936 

Eockport  Water  Co.  v.  Rockport,  161  Mass.  279,  37  N.  E.  168 

116,  826,  915 

Rockwell  V.  Edgcomb,  72  Wash.  694,  131  P.  191 609,  1101,  1103 

Roehm  v.  Horst,  178  U.  S.  1,  44  L.  Ed.  953,  20  S.  Ct.  780 702,  711 

Rogan  V.  Arnold,  233  111.  19,  84  N.  E.  58 407,  1207 

Rogers  v.  Burr,  105  Ga.  432,  31  S.  E.  438,  70  A.  S.  R.  50 

316,  403,  801,  805,  809,  811,  814,  818,  853 

Rogers  v.  Burr,  97  Ga.  10,  25  S.  E.  339 853 

Rogers  v.  Marriott,  59  Neb.  759,  82  N.  W.  21 216 

Rohling  V.  Thole,  256  111.  425,  100  N.  E.  138 315,  803,  847,  1002 

Roper  V.  Milbourn,  93  Neb.  809,  142  N.  W.  792,  Ann.  Cas.  1914B, 

1225 602,   1104,  1117 

Rose  V.  Monarch,  150  Ky.  129,  150  S.  W.  56 829 

Rose  V.  Swann,  56  111.  37 1240 

Rosenthal  v.  Perkins,  123  Cal.  240,  55  P.  804 118 

Ross  V.  Parks,  93  Ala.  153,  8  So.  368,  30  A.  S.  R.  47,  11  L.  R.  A. 

148 326,  416,  515,  703,  1206,  1225,  1242 

Ross  V.  Savage,  66  Fla.  106,  63  So.   148 122 

Ross  V.  Saylor,  39  Mont.  559,  104  P.  864 1118 

Rothrock  v.  Hunter,  66  Wash.  543,  119  P.  1114 124 

Rouse  V.  Riverton  Coal  &  Dep.  Co.,  71  Ore.  154,  142  P.  343.  .  .214,  1005 
Routledge  v.  Grant,  4  Bing.  653,  13  E.  C.  L.  678,  130  Eng.  Reprint 

920 703,  824 

Rovelsky  v.  Brown,  92  Ala.  522,  9  So.  182,  25  A,  S.  R.  83 806a 

Rowe  V.  Griffiths,  57  Neb.  488,  78  N.  W.  20 120 

Rowe  V.  White,  189  N.  Y.  523,  83  N.  E.  1132 518 

Rowlands  v.  Evans,  8  Jur.   (N.  S.)   88,  30  Beav.  302,  31  L,  J.  Ch. 

265,  54  Eng.  Reprint  905 709 

Royal  Brewing  Co.  v.  St.  Louis  Brewery  Co.,  (Mo.  App.)  176  S.  W. 

553    838 

Rude  V.  Levy,  43  Colo.  482,  96  P.  560,  24  L.  R.  A.    (N.  S.)    91, 

127  A.   S.  R.   123 

307,  327,  331,  333,  842,  908,  920,  1202,  1203,  1204,  1244 

Rudolf  V.  Winters,  7  Neb.   125 216 

Eumpf  V.  Barto,  10  Wash.  382,  38  P.  1129 507,  828 

•Rumsey  v.  Berry,  65   Me.  570 216 

Runck  V.  Dimmick,  51   Tex.  Civ.  App.  214,   111  S.  W.  779 

109,   205,  1103 

Russell  V.  Falls  Mfg.  Co.,  106  Wis.  329,  82  N.  W.  134 838 

Russell  V.  Swift,  5  Ore.   233 419 

Rust  V.  Conrad,  47  Mich.  449,  11  N.  W.  265,  41  Am.  Rep.  720 1236 

Rutland  Marble  Co.  v.  Ripley,  10  Wall.  (U.  S.)  339,  19  L.  Ed.  955.  .1236 
Ryan  v.  McLane,   91   Md.   175,   46   Atl.   340,   50   L.   R.   A.   501,   80 

A.  S.  R.  438 1210 

Ryan  v,  Thomas,  55  S.  Jr.  364 211 


TABLE  OP  CASES  765 

s 

Sections 

Salisbnry  t.  La  Fitte,  21  Colo.  App,  13,  121  P.  952 506,  509,  609 

Sanborn  v.  Flagler,   9   Allen    (Mass.)    474 415 

Sandberg  v.  Light,  55  Wash.  189,  104  P.  205 710 

Sanders  v.  Middleton,  112  Me.  433,  92  Atl.  488 869 

Sandoval  v.  Eandolph,  222  U.  S.  161,  56  L.  Ed.  142,  32  S.  Ct.  48.  .  .    115 
San  Pedro  Salt  Co.  v.  Hauser  Packing  Co.,   13   Cal.  App.   1,   108 

P.   728 852 

Sargent  v.  Gile,  8  N.  H.  325 507 

Saunders  v.  Clark,  29  Cal.  299 122 

Savereux  v.  Tourangeau,   16  Ont.  L.  Eep.  600 332,  515,  1242 

Sawyer  v.  Brossart,  67  Iowa  678,  25  N.  W.  876,  56  Am.  Kep.  371. . 

815,  837,  840,  843,  904 

Saxby  v.  Southern  Land  Co.,  109  Va.  196,  63  S.  E.  423 215,  217 

Sayward  v.  Houghton,  119  Cal.  545,  51  P.  853,  52  P.  44 

107,  116,  808,  1218,  1226 

Schaeffer  v.  Coldren,    237    Pa.    77,    85    Atl.    98,    Ann.    Cas.    1914B, 

175 912,  933 

Schaeffer  v.  Herman,  237  Pa.  86,  85  Atl.  94 

803,  805,  1238,  1239,  1240,  1242 

Schaeffer  v.  Strieder,  203  Mass.  467,  89  N.  B.  618 403 

Schee  v.  McQuilken,  59   Ind.   269 206 

Scheerschmidt  v.  Smith,  74  Minn.  224,  77  N.  W.  34 413,  1118 

Scherck  v.  Moyse,  94  Miss.  259,  48  So.  513 406,  1118 

Schettler  v.  Smith,  41  N.  Y.  328 220 

Schields  V.  Horbach,  28  Neb.  359,  44  N.  W.  465 861,  1250 

Schlee  v.  Guckenheimer,  179  HI.  593,  54  N.  E.  302 216 

Schlieder  v.  Dielman,  44  La.  Ann.  462,  10  So.  934 101,  1119 

Schmidt  v.  Pegg,   172  Mich.  159,   137   N.  W.  524 120 

Schmitt  V.  Weil,  46  Ind.  App.  264,  92  N.  E.  178 817 

Schnell  V.  NeU,   17   Ind.   29,   79   Am.   Dec.   453 324 

Schnuettgen  v.  Frank,  213  Fed.  440,  130  C.  C.  A.  76 1241 

Schoonover  v.  Petcina,  126  Iowa  261,  100  N.  W.  490 506 

Schotte  V.  Puscheck,  79  HI.  App.  31 419 

Schroeder  v.  Gemeinder,   10   Nev.   355 

222,  321,  832,  855,  862,  1004,  1211,  1224,  1230 

Schulte  V.  Boulevard   Gardens   L.   Co.,    164   Cal.    464,    129   P.    582, 

Ann.  Cas.  1914B,  1013 215 

Schultz  V.  O'Rourke,  18  Mont.  418,  45  P.  634 712,  853 

Scott  V.  Goodin,  21  Cal.  App.  178,  131  P.   76 107,  829,  853 

Scott  V.  Grant,  37  Tex.  Civ.  App.  169,  84  S.  W.  265 904 

Scott  V.  Hubbard,  67  Ore.  498,  136  P.  653 334,  412,  868,  928 

Scott  V.  Hughes,  66  W.  Va.  573,  66  S.  E.   737 609 

Scott  V.  Merrill's  Estate,  74  Ore.  568,  146  P.  99 205,  1104,  1112 

Scott  V.  Shiner,  27  N.  J.  Eq.  185 823 

Scott  M.  &  S.  Co.  V.  Shultz  &  Clary,  67  Kan.  605,  73  P.  903.  .  .111,  508 
Scribner  v.  Schenkel,  128  Cal.  250,  60  P.  860 1119 


766  LAW   OF    OPTION    CONTRACTS 

Sections 

Scruggs  V.  Cotterill,  73  N.  Y.  S.  882,  67  App.  Div.  583 215,  1210 

Scudder  v.  Perce,   159  Cal.   429,   114  P.   571 122 

Seager  v.  Burns,   4  Minn.   141    (4  Gill.   43) 1237 

Sears  v.  St.  John,   18  Can.  Sup.  Ct.   702 223 

Seaton  v.  Tohill,  11  Colo.  App.  211,  53  P.  170 1237 

Seaver  v.  Thompson,  189  111.  158,  59  N.  E.  553 122,  816 

Seddon  v.  Eosenbaum,  85  Va.  928,  9  S.  E.  326,  3  L.  R.  A.  337 

404,  1234 

Seeley  v.  Howard,  13  Wis.  336 1244 

Seibel  v.  Higham,  216  Mo.  121,  115  S.  W.  987 609 

Seidman  v.  Rauner,  99  N.  Y.  S.  862,  51  Misc.  Rep.  10 107 

Selden  v.  Camp,  95  Va.  527,  28  S.  E.  877 913 

Serrell  v.  Rothstein,  49  N.  J.  Eq.  385,  24  Atl.  369 121 

Seton  V.  Slade,  7  Ves.  265 1222 

Settle  V.  Winters,  2  Idaho  215,  10  P.  216 920 

Sewell  V.  Peavey,   (Ala.)  65  So.  803 1250 

Seyferth  v.  Groves  etc.  R.  R.  Co.,  217  El.  483,  75  N.  E.  522 

303,   703,  1227 

Seymour  v.  Canfield,   122  Mich.  212,  80  N.  W.   1096 824,  861 

Shakespeare  v.  Alba,  76  Ala.  351 1240 

Shamp  V.  White,  106  Cal.  220,  39  P.  537 831,  834,  852 

Shank  v.  Groff,  45  W.  Va.  543,  32  S.  E.  248 906,  912 

Sharkey  v.  Larkin,  52  N.  Y.  623 1212 

Sharkey  v.  McDermott,  91  Mo.  647,  4  S.  W.  107,  60  A.  S.  R.  270.  .   419 

Shattuck  V.  Cunningham,   166  Pa.  368,  31  Atl.   136 930 

Shaw  V.  Caldwell,   16   Cal.  App.   1,   115  P.   941 122 

Shearer  v.  Jewett,  31  Mass.  232 1119 

Sheeby  v.  Scott,  128  Iowa  551,  104  N.  W.  1139,  4  L.  R.  A.  (N.  S.) 

365 509,  514 

Sheffield  Furnace  Co.  v.  Hull  C.  &  C.  Co.,  101  Ala.  446,  14  So.  672.  .   311 

Shelburne  v.  Biddulph,  6  Bro.  P.  C.  356,  2  Eng.  Reprint  1131 607 

Shepard  v.  Pabst,  149  Wis.  35,  135  N.  W.  158 114 

Sheppard  v.  Rosenkrans,   109  Wis.  58,  85   N.  W.   199,  83  A.  S.  R. 

886 412,   417,  835 

Sherman  Nursery   Co.   v.   Aughenbaugh,  93   Minn.   201,   100   N.   W. 

1101    1119 

Sherwood  v.  Wilkins,  65  Ark.  312,  45  S.  W.   988 120 

Shields  v.  Coyne,  148  Iowa  313,  127  N.  W.  63 802,  803 

Shields  v.  Titus,  46  Ohio  St.  528,  22  N.  E.  717 419 

Shields  Bros.,   In  re,   134   Iowa  559,   111  N.  W.  963,   10  L.  R.   A. 

(N.  S.)    1061 123,  502,  506 

Shinn  v.  Roberts,  20  N.  J.  L.  435,  43  Am.  Dec.  636 849 

Shipley  V.  Patton's  Adm'r,   21   Ind.   169 404 

Shipman  v.  Cummins,  65  Hun.  620,  19  N.  Y.  S.  974 938 

Shipps  V.  Atkinson,  8  Ind.  App.  505,  36  N.  E.  375 1119 

Shouse  V.  Doane,  39  Fla.  95,  21   So.  807 924 

Shuemaker  v.  Nissley,   225  Pa.   430,  74  Atl.  241 910 


TABLE  OF  CASES  767 

Sections 
Shrtttleworth  v.  Kentucky  Coal  I.  &  Dev.  Co.,  22  Ky.  L.  Rep.  1341, 

60  S.  W.  534 609 

Sigmund  v.  Newspaper  Co.,  82  El.  App.  178 418 

Simmons  v.  Zimmerman,  144  Cal.  256,  79  P.  451,  1  Ann.  Cas.  850.  . 

323,  601,  604,  605,  606,  608,  609,  1007,  1109 

Simon  v.  Schmitt,  118  N.  Y.  S.  326 866,  1211,  1212 

Simpson  v.  Sanders,  130  Ga.  265,  60  S.  E.  541 

101,  105,  123,  215,  302,  303,  311,  326,  332,  703,  871,  1227 

Sims  V.  Cordele  Ice  Co.,  119  Ga.  597,  46  S.  E.  841 602,  604,  606 

Sims  V.  Lide,   94  Ga.   553,  21   S.   E.   220 326,  602,  604,  1227,  1240 

Singer   Sewing   Mach.   Co.   v.    Independent   Waist   Band   Mfg.    Co., 

141  N.  Y.  S.  488 113 

Sirk  V.  Ela,  163  Mass.  394,  40  N.  E.  183 104,  123,  1107 

Sitterding  v.  Grizzard,  114  N.  C.  108,  19  S.  E.  92 108,  710 

SiveU  V.  Hogan,   119   Ga.   167,   46   S.   E.   67 

311,  332,   403,  418,   1101,  1104 

Sixta  V.  Ontonagon   Valley   Land   Co.,    157    Wis.    293,    147    N.    W. 

1042 122,  315,  1104,  1118 

Sizer  v.  Clark,   116  Wis.   534,   93   N.   W.  539 

515,  809,  810,  921,  933,  1003,  1125 

Slaughter  v.  Mallet  L.  &  C.  Co.,  141  Fed.  282,  72  C.  C.  A.  430.  .113,  211 

Slaughter  v.  Nash,    11   Ky.   322 1242 

Slayden  &  Co.  v.  Palmo,  53  Tex.  Civ.  App.  227,  117  S.  W.  1054 108 

Sloan  V.  Baird,  162  N.  Y.  327,  56  N.  E.  752 1118 

Sloan  V.  Williams,  138  HI.  43,  27  N.  E.  531,  2  L.  R.  A.  496 

207,   604,  1243 

Small  V.  Owings,   1   Md.   Ch.   363 1207 

Sraiddy  v.  Grafton,  163  Cal.  16,  124  P.  433,  Ann.  Cas.  1913E,  921 

910,  1006 

Smiley  v.  Barker,  83  Fed.  684,  28  C.  C.  A.  9 413 

Smith  V.  Alexander,  128  HI.  App.  507 215 

Smith  V.  Bangham,  156  Cal.  359,  104  P.  689,  28  L.  R.  A.  (N.  S.)  522 
102,  207,  324,  326,  501,  503,  515,  517,  856,  871, 

872,  1002,  1005,  1103,  1118,  1202,  1204,  1217,  1226,  1242,  1243,  1248 

Smith  V.  Bateman,  8  Colo.  App.  336,  46  P.  213 703 

Smith  V.  Bradley,    (Conn.)    1   Root    150 405 

Smith  V.  Caldwell,  78  Ark.  333,  95  S.  W.  467 123 

Smith  y.  Cauthen,  98  Miss.  746,  54  So.  844 303,  320,  1118 

Smith  V.  Detroit  etc.  Gold  M.  Co.,  17  S.  D.  413,  97  N.  W.  17 712 

Smith  V.  Fisher,  33  N.  Y.   S.   1059,  87  Hun.   129 823 

Smith  V.  Gibson,  25   Neb.  511,  41   N.  W.   360 

407,   414,   415,  515,   809,  926 

Smith  V.  Guffey,  202  Fed.  106,   120  C.  C.  A.  436 309,  311,  1236 

Smith  V.  Ivey  Bros.,  119  La.  357,  44  So.  126 112 

Smith  V.  Jones,   21   Utah   270,   60   P.    1104 

107,   305,   307,   513,   514,   604,   607 

Smith  V.  Lander,   (Tex.  Civ.  App.)    89  S.  W.  19 1118 


768  LAW   OF    OPTION    CONTRACTS 

Sections 

Smith  V.  Lawrence,  98  Me.  92,  56   Atl.   455 702,  1104 

Smith  V.  LoeweBstein,  50  Ohio  St.  346,  34  N.  E.  159 512,  517 

Smith  V.  Miller,  54  Ind.  App.  37,  101  N.  E.  316 913,  929,  1008 

Smith  V.  Neale,  2  C.  B.  (N.  S.)  67,  26  L.  J.  C.  P.  143,  3  Jur.  (N.  S.) 

516    415 

Smith  V.  Newell,  37  Fla.  147,  20  So.  249 1111,  1117,  1118 

Smith  V.  Old  Dominion  etc.  Ass'n,  119  N.  C.  257,  26  S.  E.  40 903 

Smith  V.  Post,  167  Cal.  69,  138  P.  705 823,  871 

Smith  V.  Reynolds,   8   Fed.   696,   3   McCrary   157 301,  1215,  1235 

Smith  V.  Russell,  20  Colo.  App.  554,  80  P.   474.... 704,  705,  850,  1250 

Smith  V.  Sanborn,  11  Johns.   (N.  Y.)   59 118 

Smith  V.  Smith,  36  Ga.   184,  91   Am.  Dec.   761 332 

Smith  V.  Smith,  25  Wend.    (N.   Y.)    405 905 

Smith  V.  Taylor,  82  Cal.  533,   123  P.  217 419 

Smith  V.  Taylor,   2   Wash.   422,   27   P.   812 1207 

Smith  &  Rice  Co.  v.  Canady,  213  Mass.  122,  99  N.  E.  968 906 

Smith's  Appeal,  In  re,  69  Pa.  474 214,  407,  415,  914,  919,  1233 

Smoothing  Iron  Heating  Co.  v.  Blakely,  94  S.  C.  224,  77  S.  E.  945.  .1119 

Smoyer  v.  Roth,    (Pa.)    13    Atl.    191 210 

Smyth  V.  Nelson,  135  Ga.  96,  68  S.  E.  1032 124 

Snelling  v.  Hall,  107  Mass.   134 821 

Snider  v.  Yarbrough,   43   Mont.   203,    115   P.   411 

101,  102,  107,  122,  862,  920 

Snow  V.  Nelson,    113   Fed.   353 406,  408,  415,  605,  703 

Snyder  v.  Murdock,  51  Mo.   175 1116 

Snyder  v.  Snyder,  75  Iowa  255,  39  N.  W.  257 124 

Solomon  v.  Shewitz,   (Mich.)   152  N.  W.  196 609 

Solomon  Mier  Co.  v.  Hadden,  148  Mich.  488,  111  N.  W.  1040,  118 

A.  S.  R.  586,  12  Ann.  Cas.  88 

415,  610,  702,  703,  706,  711,  801,  1209,  1222,  1230,  1244 

Somerville  v.  Coppage,  101  Md.  519,  61  Atl.  318 123 

Sooy  V.  Winter,    (Mo.   App.)    175   S.   W.   132 1106 

Sorenson  v.  Smith,  65  Ore.  78,  129  P.  757,  Ann.  Cas.  1915A,  1127.  .   205 
Souflfrain  v.  McDonald,   27   Ind.   269 

321,  415,  604,  703,  823,  907,  1228,  1241 

South  African  etc.  Co.,  In  re,  74  L.  T.  Rep.   769,  affd.  77  L.   T. 

Rep.  377    1104 

South  Florida  etc.  Co.  v.  Walden,  59  Fla.  606,  51   So.   554 

214,  871,  1237 

South  Penn  Oil  Co.  v.   Snodgrass,   71  W.   Va.   438,   76   S.   E.   961, 

43  L.  R.  A.  (N.  S.)  848 328 

South  Texas  Mtge.  Co.  v.  Coe,  (Tex.  Civ.  App.)   166  S.  W.  419...   409 

Southack  v.  Lane,  65  N.  Y.  S.  629,  reversing  52  N.  Y.  S.  687 114 

Southern  Express  Co.  v.  Western  N.  C.  R.  R.  Co.,  99  U.  S.  191,  25 

L.  Ed.  319    1236 

Southern  Ry.  Co.  v.  Franklin  &  P.  Ry.  Co.,  96  Va.  693,  32  S.  E. 

485,  44  L.  R.  A.  297 1211 


TABLE  OF  CASES  769 

Sections 
Southern  Sawmill  Co.  v.  Baldwin  L.  Co.,  120  La.  975,  45  So.  961.  .1244 

Sowles  V.  Hall,  62  Vt.  247,  20  Atl.  »10 920 

Spafford  v.  Hedges,  231  HI.  140,  83  N.  E.  129.  .707,  849,  871,  1125,  1250 

Spangler  v.  Eogers,  123  Iowa  724,  99  N.  W.  580 831 

Spangler  v.  Spangler,  11  Cal.  App.  321,   104  P.  995 607,  804 

Sparks  v.  Taylor,  99  Tex.  411,  90  S.  W.  485,  6  L.  E.  A.   (N.  S.) 

381    515 

Spence  v.  Apley,  4  Neb.  358,  94  N.  W.  109 414 

Speyer  v.  Desjardins,   144  HI.   641,  32   N.  E.  283 419 

Spokane  P.  &  C.  Ry.  Co.  v.  Ballinger,  50  Wash.  547,  97  P.  739 917 

Spolek  T,  Hatch,  21  S.  D.  386,  113  N.  W.  75 939 

Sprague  v.  Hosie,  155  Mich.  30,  118  N.  W.  497,  130  A.  S.  R.  558, 

19  L.  R.  A.    (N.  S.)    874 403 

Sprague  v.  Schotte,  48  Ore.  609,  87  P.   1046 

110,   301,   502,   515,   704,   705,  1224 

Springer  v.  De  Wolf,  194  HI.  218,  62  N.  E.  542,  56  L.  R.  A.  465, 

88  A.  S.  R.  155,  affd.  93  HI.  App.  260 810 

Springfield  Engine   Stop   Co.   v.    Sharp,   184   Mass.    266,   68    N.    E. 

224    830,    858 

Stafford  v.  Richard,  121  La.  76,  46  So.   107 940 

Stalder  v.  Riverside  Groves  &  Water  Co.,  167  Cal.  560,  140  P.  252.  .    121 

Stamey  v.  Hemple,  173  Fed.  61,  97  C.  C.  A.  379 334,  411 

Stamper  v.  Combs,   (Ky.)   176  S.  W.  178 327 

Standard  Box  Co.  v.  Mut.  Biscuit  Co.,  10  Cal.  App.  746,  103  P.  938 

123,  410,  707,  850,  857 

Standard  D,  &  D.  Co.  v.  Springfield  C.  M.  &  T.  Co.,  146  HI.  App. 

144 216 

Standard  Fashion  Co.  v.  Siegel-Cooper  Co.,  157  N.  Y.  60,  51  N.  E. 

408,  68  A.  S.  R.  749,  43  L.  R.  A.  854 1246 

Standard  S.  M.  Co.  v.  Frame,  2  Pennewill  430,   (Del.)  48  Atl.  188. 

508,  1252 

Standiford  v.  Kloman,   234  Pa.   443,  83  Atl.   311 122,  713,  861 

Standiford  v.  Thompson,  135  Fed.  991,  68  C.  C.  A.  425 

122,  859,  862,  920,  1249 

Stanford  v.  McGill,  6  N.  D.  536,  72  N.  W.  938,  38  L.  R.  A.  760.  702,  711 
Stansbury  v.  Embrey,  128  Tenn.  103,  158  S.  W.  991,  47  L.  R.  A. 

(N.   S.)   980 903 

Stansbury  v.  Fringer,   (Md.)   11  Gill  &  J.  149 314,  317,  1228 

Stanton  v.  Singleton,    (Cal.)    54   P.   587 123,  926,  928,  930,  1253 

Stanton  v.  Singleton,  126  Cal.  657,  59  P.  146,  47  L.  R.  A.  334 

926,  1204,   1236 

Stanwood  v.  Kuhn,  132  HI.  App.  466 321,  703,  1125 

Staples  v.  O'Neal,  64  Minn.  27,  65  N.  W.  1083 317 

Star,  D.  M.  Co.  v.  McLeod,  122  Ky.  564,  92  S.  W.  558,  29  Ky.  L. 

Rep.  84 108,   113,  830 

.Starcher  Bros.  v.  Duty,  61   W.  Va.  371,  56  S.  E.  527    220,   223 

Starcher  Bros.  v.  Duty,  61   W.  Va.  373,  56  S.  E.  524,  123  A.  S.  R. 

990,  9  L.  R.  A.   (N.  S.)    913 220,  223,  1204 

49 — Option  Contracts. 


770  LAW  OF  OPTION   CONTRACTS 

Sections 

Stark  V.  Olsen,  44  Neb.  646,  63  N.  W.  37 120 

State  V.  Betz,   207   Mo.  589,   106   S.   W.   64 Ill,  507 

State  V.  Worthington's  Ex'rs,  7  Ohio  171 709 

Stay  V.  Tennille,  159  Ala.  514,  49  So.  238 222 

Stead  V.  Dawber,  10  Adol.  &  E.  57,  113  Eng.  Keprint  22 409 

Stearnes  v.  Goad,  111  Va.  834,  69  S.  E.  1101 324,  506 

Stearns  v.  Hall,  63  Mass.  (9  Cush.)  31 411 

Stebbins  v.  Myers,   143  N.  Y.   S.   396 124 

Steekel  v.  Standley,  107  Iowa  694,  77  N.  W.  489 906 

Steele  v.  Bond,   32   Minn.   14,   18   N.  W.   830 848,  862,  917 

Steele  v.  Robertson,  75  Ark.  228,  87  S.  W.  117 805 

Stein  V.  Archibald,  151  Cal.  220,  90  P.  536 122,  123,  908 

Stein  V.  Leeman,  161  Cal.  502,  119  P.  663 

319,   334,  905,  907,   909,  1003 

Steinhauer  v.  Henson,  54  Colo.   246,   131  P.  255 107,  111,  508,  830 

Steinman  v.  Hagan,  108  Va.  563,  62  S.  E.  348 1239 

Stembridge  v.  Stembridge,  87  Ky.  91,  7  S.  W.  611,  9  Ky.  L.  Eep. 

948 502,  514,  862,  871,  913 

Stengel  v.  Sergeant,  74  N.  J.  Eq.  20,  68  Atl.   1106 1203 

Stensgaard  v.  Smith,  43  Minn.  11,  44  N.  W.  669,  19  A.  S.  R.  205.  .   313 

Stephens  v.  Coryell,  169  Mich.  48,  134  N.  W.   1094 609 

Stephenson  v.  Kilpatrick,  166  Mo.  262,  65  S.  W.  773 906 

Sterling  Organ  Co.  v.   House,   25  W.  Va.   64 404 

Sterricker  v.  McBride,  157  HI.  70,  41  N.  E.  744 908 

Stevens  v.  Annex  Realty  Co.,  173  Mo.  511,  73  S.  W.  505 221 

Stevens  v.  Hertzler,  109  Ala.  423,  19  So.  838 829,  1105 

Stevens  v.  Kittredge,  44  Wash.   347,  87  P.  484.. 921,  1003,  1237,  1244 

Stevens  v.  McChrystal,  150  Fed.  85 116,  502,  857,  1249,  1250 

Stevenson  v.  McLean,  5  Q.  B.  D.  346 704,  818,  840,  1219 

Stevinson  v.  Joy,  164  Cal.  279,  128  P.  751 123,  831 

Stewart  v.  Eddowes,  43  L.  J.  C.  P.  204,  L.  R.  9  C.  P.  311,  30  L.  T. 

Rep.   333,  22  Wkly.  Rep.   534 415 

Stewart  v.  Gardner,  152  Ky.  120,  153  S.  W.  3 123,  707,  1001 

Stigler  V.  Jaap,  83  Miss.  351,  35  So.  948 321,  331 

Stitt  V.  Huidekopers,  17  Wall.  384,  21  L.  Ed.  644 703,  838 

Stockton  V.  Herron,  3  Idaho  581,  32  P.  257 1246 

Stoiber  v.  Stoiber,  57  N.  Y.  S.  916,  40  App.  Div.  156 222 

Stokes  V.  Carpenter,  151  N.  Y.  S.  1000,  166  App.  Div.  441 824 

Stone  V.  Buckner,  20  Miss.  73 1240 

Stone  V.  Harmon,  31  Minn.  512,  19  N.  W.  88 123,  856 

Stone  V.  Powell,   (Iowa)   150  N.  W.   15 122,  871 

Stone  V.  Snell,  77  Neb.  441,  109  N.  W.  750 704,  857 

Stone  V.  Sprague,  20  Barb.  (N.  Y.)  509 410 

Stone  V.  St.  Louis  Stamping  Co.,  155  Mass.  267,  29  N.  E.  623 

832,  834,  835 

Storch  V.  Duhnke,  76  Minn.  521,  79  N.  W.  533 332,  704,  1244 

Storm  V.  Rosenthal,   141   N.   Y.  S.   339 107 


TABLE  OP  CASES  771 

Sections 

Storms  V.  Mundy,  46  Tex.  Civ.  App.  88,  101  S.  W.  258 515,  609 

Stovall  V.  Gardner,  100  Tex.  25,  94  S.  W.  218 419 

Strasser  v.  Steck,  216  Pa.  577,  66  Atl.  87 602,  610,  1115 

Strauss  v.  Brier,  57  Colo,  65,  140  P.  183 105 

Street  v.  Chicago  W.  &  S.  Co.,  157  BI.  605,  41  N.  E.  1108 118 

Street  v.  Hazzard,   (Cal.  App.)   149  P.  770 509 

Stuart  V.  Pennis,   100  Va.  612,  42  S.  E.   667 1118 

Sturm  V.  Boker,  150  U.  S.  312,  37  L.  Ed.  1093,  14  S.  Ct.  99 508 

Suffern  v.  Butler,  21  N.  J.  Eq.  410 108 

Suggett  V.  Cason,  26  Mo.  221 405 

Sullivan  v.  McMiUan,  26  Fla.  543,  8  So.  450,  457 702 

Sullivan  v.  O'Neal,  66  Tex.  433,  1  S.  W.  185 1207 

Sullivan  v.  Tuck,  1   Md.   Ch.   59 1210 

Superior  Oil  &  Gas  Co.  v.  Mehlin,  25  Okl.  809,  108  P.  545 1211 

Sutherland  v.  Goodnovr,  108  111.  528,  48  Am.  Rep.  560 607,  804,  808 

Sutherland  v.  Parkins,  75  El.  338 602,  606,  709,  808,  827,  871 

Swain  v.  Seamens,  (U.  S.)  9  Wall.  254,  19  L.  Ed.  554 410 

Swank  v.  Fretts,  209  Pa.  625,  59  Atl.  264 

105,   107,   712,   857,  862,   1250 

Swank  v.  St.  Paul  City  Ry.  Co.,  61  Minn.  423,  63  N.  W.  1088 831 

Swank  v.  St.  Paul  City  Ry.  Co.,  72  Minn.  380,  75  N.  W.  594.  .113,  124 
Swanston  v.  Clark,  153  Cal.  300,  95  P.  1117 

217,  321,  712,  1006,  1244,  1245,  1246,  1254 

Swearingen  v.  Lahner,  93  Iowa  147,  61  N.  W.  431,  26  L.  E.  A.  765, 

57  A.  S.  R.  261 121 

Sweeney  v.  Kaufman,  168  HI.  233,  48  N.  E.  144 120,  121 

Sweezy  v.  Jones,  65  Iowa  272,  21  N.  W.  603 509,  602 

Swift  V.  Erwin,  104  Ark.  459,  148  S.  W.  267,  Ann.  Cas.  1914C,  363 

101,  205 

Swift,  In  re,  112  Fed.  315,  50  C.  C.  A.  264 709 

Swon  V.  Stevens,  143  Mo.  384,  45  8.  W.  270 411 

Sykes  v.  Boone,  132  N.  C.  199,  43  S.  E.  645,  95  A.  S.  R.  619 116 


T 

Taber  v.  Cincinnati  L.  &  C.  Ry.  Co.,  15  Ind.  459 120 

Taber  v.  Dallas  County,  101  Tex.  241,  106  S.  W.  332 

110,  303,  306,  1218 

Tagg-art  v.  Hunter,   (Ore.)    150  P.  738 406 

Tate  V.  Aitken,  5  Cal.  App.  505,  90  P.  836 114 

Tavenner  v.  Barrett,  21  W.  Va.  656 1246 

Taylor  v.  Buffalo  Collieries  Co.,  72  W.  Va.  353,  79  S.  E.  27 122 

Taylor  v.  Longworth,  14  Pet.   (U.  S.)   172,  10  L.  Ed.  405 

862,  920,  1002,  1239 

Taylor  v.  Merrill,  55  HI.  52 419 


772  LAW   OF    OPTION    CONTRACTS 

Sections 
Taylor  ▼.  Newton,  152  Ala.  459,  44  So.  583 

303,  311,  322,  601,  608,  703,  847,  1005,  1225,  1242,  1244 

Taylor  v.  Peterson,   (Ore.)    147  P.  520 418 

Taylor  v.  Rennie,  35  Barb.  272,  22  How.  Pr.  101,  (N.  Y.) 704,  849 

Taylor  v.  Slater,  21  R.  I.  104,  41  Atl.  1001 1252 

Taylor  v.  Stibbert,  2  Ves.  439 515 

Taylor  v.  McCoy  Coal  &  Coke  Co.  v.  Hartman,  222  Pa.  172,  70  Atl. 

1001 211,  1121 

Teal  V.  McNight,  110  La.  256,  34  So.  434 514 

Tebeau  v.  Ridge,  261  Mo.  547,  170  S.  W.  871,  L.  R.  A.  1915C,  367. 

321,  1204,  1244,  1254 

Telford  v.  Frost,   76  Wis.   172,   44   N.   W.   835 402,  505 

Tennill  v.  Howden,  177  Fed.  631,  101  C.  C.  A.  257 516 

Te  Poel  V.  Shutt,  57  Neb.  592,  78  N.  W.  288 903 

Terstegge  v.  Society,  92   Ind.   82,  47   Am.   Rep.   135 833,  834 

Tessier  v.  City  of  Nashua,  75  N.  H.  572,  78  Atl.  495 506 

Tevis  V.  Nugent,  22  Ky.  L.  Rep.  894,  59  S.  W.  9 861 

Tevis  V.  Tevis,  259  Mo.  19,  167  S.  W.  1003 930 

Texas  &  P.  Ry.  Co.  v.  City  of  Marshall,  136  U.  S.  393,  34  L.  Ed. 

385,  10  S.   Ct.   846 1204 

Thacher  v.  Weston,  197  Mass.  143,  83  N.  E.  360 501,  502,  823 

Thatcher  v.  St.  Andrew 's  Church,  37  Mich.  264 222 

Thaw  V.  Gaffney,    (W.  Va.)   83  S.  E.  983 223 

Thiebaud  v.  First  Nat'l  Bank,  42  Ind.   212 831,  833,  852 

Thieler  v.  Rayner,  190  N.  Y.  546,  83  N.  E.  1133,  aflfg.  100  N.  Y.  S. 

993,  115  App.  Div.  626 221 

Thiry  v.  Edson,  129  HI.  App.  128 70G 

Thomas  v.  Gottlieb  etc.  Co.,  102  Md.  417,  62  Atl.  633 

217,  861,  871,  1101,  1203,  1204,  1228,  1237,  1253 

Thomas  v.  Kelly,  3  S.  C.   (3  Rich.)   210,  16  Am.  Rep.  716 901 

Thomas  D.  Murphy  Co.  v.  Ex.  Nat'l  Bank,  76  Neb.  573,  107  N.  W. 

845 1119 

Thomas  Gordon  Malting  Co.  v.  Bartels  Brewing  Co.,  206  N.  Y.  528, 

100  N.  E.  461 1119 

Thomas  Hinds  Lodge  v.  Church,  103  Miss.  130,  60  So.  66 831 

Thompkins  v.  Sheehan,  158  N.  Y.  617,  53  N.  E.  502 403 

Thompson  v.  Burns,  15  Idaho  572,  99  P.  Ill 818,  849,  856 

Thompson  v.  Elliott,  28  Ind.  55 402 

Thompson  v.  Craft,  238  Pa.  125,  85  Atl.  1107 122,  825 

Thompson  v.  Justice,  88  N.  C.  269 1241 

Thompson  v.  Lyon,  40  W.  Va.  87,  20  S.  E.  812 906 

Thompson  v.  Myrick,  20  Minn.  205 1242 

Thompson  v.  New  So.  Coal  Co.,  135  Ala.  630,  34  So.  31,  62  L.  R.  A. 

551,  93  A.  S.  R.  49 419 

Thompson  v.  Pennebaker,  173  Fed.  849,  97  C.  C.  A.  591 214,  601 

Thompson  v.  Poor,  147  N.  Y.  402,  42  N.  E.  13 410,  412,  413 


TABLE  OF  CASES  773 

Sections 
Thompson  v.  Robinson,  65  W.  Va.  506,  64  S.  E.  718,  17  Ann.  Cas. 

1109 409,  410,  1008 

Thompson  v.  Sheplar,  72  Pa.  160 1118 

Thompson  v.  Wilkinson,    (Okl.)    148  P.   177 108,  703 

Thompson  r.  WiUard,  219  Pa.  170,  68  Atl.  46 811 

Thompson  &  Ford  Lumber  Co.  v.  Dillingham,  223  Fed.   1000 514 

Thomson  v.  Kyle,  39  Fla.  582,  23  So.  12,  63  A.  S.  R.  193 

702,  711,  868,  1244 

Thrower  v.  Logan,  137  Ga.  655,  74  S.  E.  253 1109 

Thurber  v.  Jewett,  3  Mich.  295 903 

Thurber  v.  Meves,  119  Cal.  35,  50  P.  1063,  51  P.  536 1218 

Tibbs  V.  Zirkle,  55  W,  Va.  49,  46  S.  E.  701,  104  A.  S.  R.  977,  2  Ann. 

Cas.  421 205,  301,  326,  502,  515,  610,  703,  1242 

Tichenor-Grand  Co.,  In  re,  203  Fed.  702 215 

Tidball  v.  ChaUburg,  67  Neb.  524,  93  N.  W.  679 

301,  703,  1209,  1224,  1230 

Tilleny  v.  Knoblauch,  73  Minn.  108,  75  N.  W.  1039 835 

Tillery  v.  Land,  136  N.  C.  537,  48  S.  E.  824 1237,  1238 

Tilton  V.  Sterling  C.   &  C.   Co.,   28   Utah   173,   77   P.   758,    107   A. 

S.  R.  689 

101,  122,  321,  703,  838,  850,  852,  853,  868,  870,  871,  1103,  1246,  1247 
Tippins  V.  Phillips,  123  Ga.  415,  51  S.  E.  410.  .122,  123,  214,  1109,  1204 

Tisdale  v.     Harris,  37  Mass.   (20  Pick.)   9 403 

Title  etc.  Co.  v.  McDonnell,  32  Wash.  418,  73  P.  484 10 V 

Title  Ins.  &  T.  Co.  v.  King  Land  &  I.  Co.,  19  Cal.  App.  458,  126 

P.  372 307,   706,  712 

Todd  V.  Parker,  1  N.  J.  L.  45 903 

Tombler  v.  Sumpter,  97  Ark.  480,  134  S.  W.  967 1239 

Tomblin  v.  Callen,  69  Iowa  229,  28  N.  W.  573 216 

Topping  V.  Root,  5  Cow.   (N.  Y.)   404 856 

Torpy  V.  Betts,  123  Mich.  239,  81  N.  W.  1094 221 

Torrey  v.  McFadyen,  165  N.  C.  237,  81  S.  E.  296 1110,  1112,  1245 

Town  of  Boonton  t.  United  Water  Supply  Co.,  83  N.  J.  Eq.  536,  91 

Atl.  814   116 

Town  of  Bristol  t.  Bristol  &  W.  Waterworks,  19  R.  I.  413,  34  Atl. 

359,  32  L.  R.  A.   740 1212,  1242 

Town  of  Bristol  v.  Waterworks,  25  R.  I.  189,  55  Atl.  710.  .116,  513,  826 
Town  of  Southington  v.  Company,  80  Conn.  646,  69  Atl.  1023..  116,  826 
Townley  v.  Bedwell,  14  Ves.  Jun.  591,  33  Eng.  Reprint  648... 517,  607 

Tracy  v.  Alvord,  118  Cal.  654,  50  P.  757 333 

Tracy  v.  Gunn,  29  Kan.  508 1118 

Trainor  v.  Schutz,  98  Minn.  213,   107  N.  W.  812 836 

Trammell  v.  Craddock,  93  Ala.  450,  9  So.  587 419 

Trasker  v.  Small,  3  Myl.  &  C.  63,  40  Eng.  Reprint  848 1239 


774  LAW  OF   OPTION   CONTRACTS 

Sections 
Trevor  v.  Wood,  36  N.  Y.  307,  93  Am,  Dec.  511 704 

Trice  V.  Comstock,  121  Fed,  620,  57  C.  C.  A,  646,  61  L,  R.  A.  176 

515,  609 

Triplett  V,  Gudebrod,  115  Va,  669,  79  S.  E.  1045 837 

Trogden  v,  Williams,   144   N.   C.   192,   56   S.   E.   865,   10   L,   R.   A. 

(N.  S.)   867 203,  205,  222,  811,  842,  861,  862,  916,  935,  1232 

Trotter's  Will,  In  re,  93  N.  Y.  S.  404,  104  App.  Div,   188,  affd. 

182  N,  Y.  465,  75  N,  E.  305 224 

Trounstine  v.  Sellers,  35  Kan.  447,  11  P.  441 814 

Trustees  v.  Lodge,  100  Wis.  223,  75  N,  W,  954,  69  A.  S.  R.  912.  , .   206 

Tucker  v,  Lawrence,  56  Vt,  467 703 

Tucker  v.  Woods,   12  Johns.  190,  7  Am.  Dec.  305 104,  303 

Tulk  V,  Moxhay,  2  Ph.  774,  41  Eng.  Reprint  1143,  15  Eng.  Rul,  Cas. 

254 221,  607 

Turner  v,  McCormick,   56  W.  Va.   161,   49   S.  E.   28,   107  A.   S.  R, 

904,  67  L.  R.  A.  853 712,  816,  839,  843,  915,  921 

Turner  v.  Muskegon  M.  &  F.  Co.,  97  Mich,  166,  56  N.  W.  356 830 

Tuttle  V.  Campbell,  74  Mich.  652,  42  N.  W,  384,  16  A.  S.  R.  652.  , .   206 

Twaits  V,  Pennsylvania  R.  Co.,  77  N.  J.  Eq.  103,  75  Atl.  1010 118 

Tweedie  v,  P.  E,  Olson  Hardware  &  Fur.  Co.,  96  Minn.   238,   104 

N.  W.  895,  1089,  s.  c.  98  Minn.  11,  107  N.  W.  557 806 

Twin  City  Power  Co,  v,  Barrett,  126  Fed,  302,  61  C,  C.  A.  288 1115 

Tyler  v.  Barrows,  29  N,  Y.  Sup,  Ct.  104 602,  802 

Tyler  v.  Fidelity  &  C.  Tr,  Co.,  158  Ky.  280,  164  S.  E.  939 218 

Tyler  v.  Onzts,  93  Ky,  331,  20  S.  W,  256 942 

Tyler  v,  Tyler,  50  Mont,  65,  144  P.  1090 207 

Tyng  v.  Constant  etc.  Co,,  37  Utah  304,  108  P.  1109 122 


u 


U,  B.  Blalock  &  Co.  v.  W,  D,  Clark  &  Bro.,  133  N,  C.  306,  45  S.  E. 

642 850,  856,  926,  930,  1244 

Uhlman  v.  Sullivan,  242  Pa.  436,  89  Atl.  550 105 

Ulrey  y,  Keith,  237  111.  284,  86  N,  E.  696 1236 

Underwood  v.  Tew,  7  Wash.  297,  34  P.  1100 1116 

Union  Coll.  Co.  y,  Oliver,  23  Cal,  App.  318,  137  P.  1082 601,  853 

Union  Mut.  L.   Ins.   Co,  v.  Union  Mills  Plaster  Co.,   37   Fed.   286, 

3  L.  R.  A.  90 904 

Union  National  Bank  v.  Carr,  15  Fed.  438,  5  McCrary  71 216 

Union  Sawmill  Co,  y.  Lake  Lumber  Co.,  120  La,  106,  44  So.  1000 .  .  107 
United  &  G.  R.  Mfg.  Co.  v.  Conard,  80  N.  J.  L,  286,  78  Atl,  203.  . .  306 
United  States  v.  Behan,  110  U.  S.  338,  28  L.  Ed,  168,  4  S,  Ct.  81.  ,1119 


TABLE  OF  CASES  775 

Sections 

TJpton  T.  Hosmer,  70  N.  H.  493,  49  Atl.  96 607,  804 

Usher  v.  Liverraore,  2   Iowa   117 862,  864 


Valparaiso  City  Water  Co.  v.  Valparaiso,  33  Ind.  App.  193,  69  N.  E. 

1018 116,   122,  851 

Vallentyne  v.  Immigration  Land  Co.,  95  Minn.  195,  103  N.  W.  1028, 

5   Ann.   Cas.   212 1118 

Van  Brocklen  v.  Smeallie,  140  N.  Y.  70,  75,  35  N.  E.  415 1119 

Vance  v.  Newman,  72  Ark.  359,  80  S.  W.  574,  105  A.  S.  R.  42 

108,  407,  417,  712,  909,  919,   1206,  1249 

Vance's  Estate,  In  re,  152  Cal.  760,  93  P.  1010 606 

Vanderlip  v.  Peterson,  16  Manitoba   341 604,  802,  849 

Van  Deusen  v.  Brown,  167  Mich.  49,  132  N.  W.  472 1204 

Van  Doren  v.     Robinson,  16  N.  J.  Eq.  256 515,  1203,  1237 

Van  Dusen-Harrington  Co.  v.  Jungeblut,  75  Minn.  298,  77  N,  W.  970, 

74  A.  S.  R.  463 204,  216 

Van  Dyke  v.  Cole,  81  Vt.  379,  70  Atl.  593 923,  1240 

Van  Loan  v.  Glaze,  11  Cal.  App.  750,  106  P.  250 114 

Van  Nordsall  v.  Smith,  141  Mich.  355,  104  N.  W.  660 1205 

Vassault  v.  Edwards,  43  Cal.  458 

106,  407,  416,  419,  856,  859, 
861,  862,  871,  1214,  1218,  1226,  1236,  1237 
Veith  V.  McMurtry,  26  Neb.  341,  42  N.  W.  6 

515,  810,  847,  850,  904,  912,  916,  1242,  1254 

Ventura  Oil  Co.  v.  Fretts,  152  Pa.  451,  25  Atl.  732 1211 

Vermont  Marble  Co.  v.  Mead,   (N.  H.)   80  Atl.  852 810,  815,  820 

Verstine  v.  Yeaney,  210  Pa.  109,  59  Atl.  689 109,  110,  502 

Viekers  v.  City  of  Baltimore,  102  Md.  487,  63  Atl.  120 822,  1238 

Vickers  v.  Viekers,  L.  R.,  4  Eq.  529 1212 

Vickery  v.  Maier,  164  Cal.  384,  129  P.  273 101,  316,  1250,  1252 

Victor  Safe  Co.  v.  O'Neil,  48  Wash.  176,  93  P.  214 710 

Victoria  L.  Co.  v.  Hinton,  156  Ky.  674,  161  S.  W.  1109 117 

Viser  v.  Rice,  33  Tex.  139 856,  857 

Von  Dohren  v.  John  Deere  Plow  Co.,  71  Neb.  276.  98  N.  W.  830.  .   830 
Von  Boeder  v.  Eobson,  20  Tex.  754 1116 


w 


Wade  V.  South  Penn  Oil  Co.,  45  W.  Va.  380,  32  S.  E.  169.  .519,  710,  1125 
Wadick  V.  Mace,  191  N.  Y.  1,  83  N.  E.  571,  20  L.  R.  A.   (N.  S.) 

251 214,  215,  1215,  1222 

Waggoner  v.  Saether,   (HI.)    107  N.  E.  859 1240 


776  LAW   OF    OPTION    CONTRACTS 

Sections 

Wagner  v.  Cheney,  16  Neb.  202,  20  N.  W.  222 1241 

Wagniere  v.  Dunnell,  29  R.  I.  580,  73  Atl.  309,  17  Ann.  Cas.  205.  .404,  406 

Wailes  v.  Howison,  93  Ala.  375,  9  So.  594 112 

Wait,  Appeal  of,  24  Mass.  100,  19  Am.  Dec.  262 502 

Wait  V.  Wilson,  83  N.  Y.  S.  834,  86  App.  Div.  485 1238 

Walbridge,  In  re,  198  N.  Y.  234,  91  N.  E.  590 215,  805 

Walker  v.  Bamberger,   17  Utah  239,  54  P.   108 

301,  401,  403,  406,  411,  418,  703,  1121 

Walker  v.  Edmundson,  111  Ga.  454,  36  S.  E.  800.. 321,  419,  1125,  1246 

Walker  v.  Owen,  79  Mo.  563 1237 

Walker  v.  Richards,  39  N.  H.  259 419 

Wall  V.  Minneapolis  etc.  Ry.  Co.,  86  Wis.  48,  56  N.  W.  367 

401,  406,  418,  505,  1208,  1234 

Wall  V.  Schneider,  59  Wis.  352,  18  N.  W.  443,  48  Am.  Rep.  520.  .  .   216 
Wallace  v.  Figone,  107  Mo.  App.  362,  81  S.  W.  492.  .109,  114,  210,  327 

Wallace  v.  Rappleye,  103  111.  229 1207 

Wallace  v.  Townsend,  43  Ohio  St.   537,  3  N.  E.  601 709 

Wallis  V.  First  Nat'l  Bank,  155  Wis.  306,  143  N.  W.  670 122 

Walshe  v.  Endom,  129  La.  148,  55  So.  744 217,  710,  1110,  1118 

Walter  v.  Rafalsky,  186  N.  Y.  543,  79  N.  E.  1118,  affd.  98  N.  Y.  S. 

915,  113  App.  Div.  223 811 

Walter  v,  Victor  G.  Bloede  Co.,  94  Md.  80,  50  Atl.  433 410 

Walter  G.  Reese  Co.  v.  House,  162  Cal.  740,  124  P.  442 

114,  215,  301,  303,  324,  703,  810,  871,  905,  1224,  1226,  1244 

Walton  etc.  Co.  v.  McKitrick,  141  Ky.  415,  132  S.  W.  1046 117 

Ward  V.  American  Health  Food  Co.,  119  Wis.  12,  96  N.  W.  388 117 

Ward  V.  Davis,   154  Mich.  413,  117  N.  W.  897 703,  705 

Ward  V.  Hasbrouck,  169  N.  Y.  407,  62  N.  E.  434 401,  404,  406 

Ward  V.  Ledbetter,  21  N.  C.  496 1238 

Ward  V.  Wolverhampton  Waterworks  Co.,  L.  R.  13  Eq.  243,  41  L.  J. 

Ch.  308,  25  L.  T.  Rep.  (N.  S.)  487,  20  Wkly.  Rep.  85 838 

Ward  V.  Zborowski,  63  N.  Y.  S.  219,  31  Misc.  Rep.  66 205 

Warden  v.  Williams,  62  Mich.  50,  28  N.  W.  796,  4  A.  S.  R.  814 

303,  414,  415 

Warden  v.  Telsa,  87  N.  Y.  S.  853,  93  App.  Div.  520 908,  1008 

Warder  v.  Stilwell,  3  Jur.   (N.  S.)   9,  26  L.  J.  Ch.  373 1251 

.  Warfield  v.  Curd,  5  Dana  318    (Ky.) 214 

Warner  v.  Cochrane,  128  Fed.  553,  63  C.  C.  A.  207 607,  804 

Warner  v.  Willington,  3  Drew.  523,  25  L.  J.  Ch.  662 415 

Warren  v.  Costello,  109  Mo.  338,  19  S.  W.  29,  32  A.  S.  R.  669 

110,  301,  1230,  1237 

Warren  v.  Harrold,  92  Tex.  417,  49  S.  W.  364 120 

Washburn  v.  Fletcher,  42  Wis.  152 704,  818 

Washburn  v.  White,   197  Mass.  540,  84  N.  E.   106 

519,   1125,  1204,  1212,  1253 

Washburn  v.  Williams,  10  Colo.  App.  153,  50  P.  223 120 


TABLE  OP  CASES  777 

Sections 
Washington  r.  Rosario  Mining  Co.,  28  Tex.  Civ.  App.  430,  67  S,  W, 

459 815,  838,  842,  861 

Washington  Ice  Co.  v.  Webster,  62  Me.  341,  15  Am.  Rep.  462 415 

Waterman  v.  Banks,   144  U.  S.  394,  36  L.  Ed.  479,  12  S.  Ct.  646 

305,  514,  707,  849,  872,  920 

Waterman  v.  Waterman,  27  Fed.  827 215,  331,  1234 

Waters  v.  Bew,  52  N.  J.  Eq.  787,  29  Atl.  590 

214,  321,   514,  872,   1004,  1231 

Waters  v.  Kline,    121   Ky.   611,   85   S.   W.   209,    123   A.   S.   R.   215, 

27  Ky.  L.  Rep.  479 418 

Watford  O.  &  G.  Co.  v.  Shipman,  233  HI.  9,  84  N.  E.  53 1236 

Watkins  v.  Robertson,  105  Va.  269,  54  S.  E.  33,  115  A.  S.  R.  880, 

5L.  R.  A.  (N.  S.)  1194.. 123,  331,  332,  515,  1202,  1210,  1223,  1237 
Watkins  v.  YouU,  70  Neb.  81,  96  N.  W.  1042 

207,   811,   822,   871,   907,   1215,  1243 

Watson  V.  Coast,  35  W.  Va.  463,  14  S.  E.  249 

208,  801,  815,  862,  871,  914,  916,  922,  1003,  1005,  1234 

Watson  V.  Paschall,  93  S.  C.  537,  77  S.  E.  291 818 

Watts  V.  Creighton,  85  Iowa  154,  52  N.  W.  12 120 

Watts  V.  Hoffman,  77  III  App.  411 120 

Watts  V.  Kellar,  56  Fed.  1,  5  C.  C.  A.  394 115,  332,  1234,  1237 

Watts  V.  National  Cash  Reg.  Co.,  25  Ky.  L.  Rep.  1347,  78  S.  W.  118.   830 

Waul  V.  Kirkman,  27  Miss.  823 415 

Wayne  v.  The  General  Pike,  16  Ohio  421 122 

Weaver  v.  Burr,  31  W.  Va.  736,  8  S.  E.  743,  3  L.  R.  A.  94 

215,  301,  302,  303,  332,  703,  809,  814,  817,  818, 
819,  838,  868,  908,  916,  922,  1002,  1003,  1008,  1126,  1224,  1253 

Weaver  v.  Sides,  216  Pa.  301,  65  Atl.  666 850 

Weber  v.  Grand  Lodge,  169  Fed.  522,  95  C.  C.  A.  20,  s.  c.  171  Fed. 

839,  96  C.  C.  A.  410 708,  710 

Weeding  v.  Weeding,   1  Johns.  &  H.  424,  4  L,   T.    (N.  S.)    616,  9 

Wkly.  Rep.  431,  70  Eng.  Reprint  812 517,  1237 

Wehn  V.  Fall,  55  Neb.  547,  76  N.  W.  13,  70  A.  S.  R.  397 514 

Weiden  v.  Woodruff,  38  Mich.  130 104,  123,  703 

Weidenbaum  v.  Raphael,  83  N.  J.  Eq.  17,  90  Atl.  683 1237 

Weinberg  v.  Naher,  51  Wash.  591,  99  P.  736 120,  12] 

Welch  V.  Lawson,  32  Miss.  170,  66  Am.  Dec.  606 1118 

Welchman  v.  Spinks,  5  L.  T.  Rep.   (N.  S.)   385 ^.  .1005 

Wellmaker  v.  Wheatley,  123  Ga.   201,  51   S.  E.  436 

113,  122,  123,  331,  1002,  1244,  1245 

Wells  V.  Alexandre,  130  N.  Y.  642,  29  N.  E.  142,  15  L.  R.  A.  218.  .   311 

Wells  V.  Chapman,  59  Iowa  658,  13  N.  W.  841 119 

Wells  V.  Gress,  118  Ga.  566,  45  S.  E.  418 123 

Wells  V,  Smith,  2  Edw.  Ch.   (N.  Y.)   78 913 

Wentworth  v.  Wentworth,  2  Minn.  277,  72  Am.  Dec.  97 419 

Wertz  V.  Barnard,  32  Okl.  426,  122  P.  649 119 

Wescott  V.  Mitchell,  95  Me.  377,  50  Atl.  21 302,  318 


778  LAW   OF   OPTION    CONTRACTS 

Sections 

West  V.  Washington  etc.  Eailroad,  49  Ore.  436,  90  P.  666 

204,  205,  930,  1207,   1244,  1247,  1253 

West  V.  C.  &  P.  R.  Co.  V.  Mclntire,  44  W.  Va.  210,  28  S.  E.  696.  . .  417 
Wester  v.  Casein  Co.  of  America,  206  N.  Y.  506,  100  N.  E.  488,  Ann. 

Cas.    1914B,  377 818 

Western  Sec.  Co.  v.  Atlee,  (Iowa)  151  N.  W.  56.. 214,  1203,  1224,  1228 
Western  U.  T.  Co.  v.  Robertson,  (Tex.  Civ.  App.)  126  S.  W.  629..  1114 
Western  U.  T.  Co.  v,  Williams,  57  Tex.  Civ.  App.  267,  137  S.  W. 

148   319,  818,  1114 

Westervelt  v.  Huiskamp,  101  Iowa  196,  70  N.  W.  125 109 

Weston  V.  Collins,  11  Jur.   (N.  S.)   190,  34  L.  J.  Ch.  353,  13  Wkly. 

Rep.  510 716,  917 

Wetherby  v.  Griswold,   (Ore.)   147  P.  388 838,  1203,  1247,  1254 

Whalen  v.  Manley,  68  W.  Va.  328,  69  S.  E.  843 831,  833 

Wheat  V.  Cross,  31  Md.  99,  1  Am.  Rep.  28 704 

Wheatland  v.  Silsbee,  159  Mass.  177,  34  N.  E.  192 906,  1250 

Wheegan  v.  Killefer,  215  Fed.  168,  affd.  215  Fed.  289 117 

Wheeler  v.  Reynolds,  66  N.  Y.  227 1207 

Wheeler  &  W.  Mfg.  Co.  v.  Heil,  115  Pa.  487,  8  Atl.  616,  2  A.  S.  R. 

575    508 

Wheeling  Creek  etc.  Co.  v.  Elder,  170  Fed.  215 

105,  602,  605,  703,  802,  804,  862 

Whitaker  v.  Salisbury,  32  Mass.  534 123 

White  V.  Bank  of  Hanford,  148  Cal.  552,  83  P.  698 105,  115,  609 

White  V.  Corlies,  46  N.  Y.  467 814 

White  V.  Dahlquist  Mfg.  Co.,  179  Mass.  427,  60  N.  E.  791 406 

White  V.  Toncray,  5  Leigh    ( Va.)    347 118 

White  V.  Treat,   100  Fed.  290 215 

White  V.  Weaver,  68  N.  J.  Eq.  644,  61  Atl.  25 321,  1006,  1218,  1246 

Whited  &  Wheless  v.  Calhoun,  122  La.  100,  47  So.  415 107 

Whitehead  v.  Burgess,  61  N.  J.  L.  75,  38  Atl.  802 419 

Whiton  V.  Batchelder  &  Lincoln  Corp.,  179  Mass.  169,  60  N.  E.  483.1212 

Whittier  v.  Dana,  92  Mass.  326 411 

Whitting,  Succession  of,  121  La.  501,  46  So.  606,  15  Ann.  Cas.  379 

115,  918,   1228 

Wickson  v.  Monarch  Cycle  Mfg.  Co.,  128  Cal.   156,  60  P.  764,  79 

A.   S.  R.   36 404 

Wiener  v.  H.  Graff  &  Co.,  7  Cal.  App.  580,  95  P.  167 816,  872 

Wier  v.  Am.  Locomotive  Co.,  215  Mass.  303,  102  N.  E.  481 122 

Wiggin  V.  Federal  Stock  &  Grain  Co.,  77  Conn.  507,  59  Atl.  607 

216,  1119 

Wiggins  V.  Tumlin,  96  Ga.  753,  23  S.  E.  75 507,  508 

Wilbour  V.  Trow's  etc.  Co.,  1  N.  Y.  St.  Rep.  231,  40  Hun.  639 909 

Wilcox  V.  Cline,  70  Mich.  517,  38  N.  W.  555.  .703,  818,  819,  >224,  1230 
Wilcox  Canadian  Land  Co.  v.  Stewart  etc.  Co.,  107  Minn.  85,  119 

N.  W.  504 315 

Wilkins  v.  Evans,   1  Del.   Ch.    156 412,  862,  866,  928,   1208 


TABLE  OF  CASES  779 

Sections 

Wilkins  t,  Hardaway,  159  Ala.  565,  48  So.  678 214,  604 

Wilkins  v.  Hardaway,  173  Ala.  57,  55  So.  817 406 

Wilkins  v.  SomerviUe,  80  Vt.  48,  66  Atl.  893,  11  L.  R.  A.   (N.  S.) 

1133   515 

Wilkinson  v.  Havenrich,  58  Mich.  574,  26  N.  W.  139 415 

Wilkinson  v.  Pettit,  47  Barb.   (N.  Y.)   230 810 

Wilks  V.  Davis,  3  Mer.  507 1212 

Wilks  V.  Georgia  Pac.  R.  Co.,  79  Ala.  180 604,  1225 

Willard  v.  Tayloe,  8  Wall.  (U.  S.)  557,  19  L.  Ed.  501 

123,  332,  871,  907,  1002,  1234,  1239,  1240,  1241,  1249 

Willetts  V.  Reid,  5  N.  Y.  St.  Rep.  175 502 

William  Frantz  &  Co.  v.  Fink,  125  La.  1013,  52  So.  131 408 

Williams  v.  Brooks,  11  Idaho  539,  83  P.  610 1112 

Williams  v.  Eldora  etc.  Mining  Co.,  35  Colo.  127,  83  P.  780 321,  509 

Williams  v.  Graves,  7  Tex.  Civ.  App.  356,  26  S.  W.  334 

303,  321,  703,  1237 

Williams  v.  Lilley,  67  Conn.  50,  34  Atl.  765,  37  L.  E.  A.  150 

512,  517,  909 

WilUams  v.  Montgomery,  148  N.  Y.  519,  43  N.  E.  57.215,  221,  222,  1210 

Williams  v.  Patrick,  177  Mass.  160,  58  N.  E.  583 930,  935 

Williams  t.  Tiedemann,  6  Mo.  App.  269 215 

Williams  v.  Williams,  17  Beav.  213,  51  Eng.  Reprint  1015,  9  Eng. 

Rul.  Cas.  493 415,  710 

Willis  V.  EUis,  98  Miss.  197,  53  So.  498,  Ann.  Cas.  1913 A,  1039...  415 

Willoughby  v.  Atkinson  Furnishing  Co.,  93  Me.  185,  44  Atl.  612 831 

Wilson  V.  Clark,  35  Tex.  Civ.  App.  92,  79  S.  W.  649 1244 

Wilson  V.  George,  10  N.  H.  445 118 

Wilson  V.  Herbert,  76  Md.  489,  25  Atl.  685 835,  866,  924,  933 

Wilson  V.  Hoy,  120  Minn.  451,  139  N.  W.  817 1117 

Wilson  V.  Rountree,   72   HI.   570 119 

Wilson  V.  Seybold,   216  Fed.   975 1241 

Wilson  V.  Torchon  L.  &  M.  Co.,  167  Mo.  App.  305,  149  S.  W.  1156 

215,  518 

Winders  v.  Kenan,  161  N.  C.  628,  77  S.  E.  687 

101,  105,  301,  703,  801,  815,  838,  839,  862,  914,  917 

Windsor  v.  Miner,  124  Cal.  492,  57  P.  386 1253 

Winslow  V.  Dundom,  46  Mont.  71,  125  P.  136.  .101,  602,  604,  608,  926,  930 

Winslow  V.  WiUiams  Richards  Co.,  3  N.  Bninsw.  Eq.  481 516 

Winsor  v.  Mills,  157  Mass.  362,  32  N.  E.  352 220,  221 

Winter  v.  Bostwick,  172  Fed.  285 217,  712,  1005 

Wirtz  v.  Guthrie,  81  N.  J.  Eq.  271,  87  Atl.  134 419 

W.  Irving  S.  Bros.  Co.  v.  Herold,  81  Mo.  App.  461 107,  508 

Wiswall  V.  McGowan,  2  Barb.   (N,  Y.)   270 806a,  811 

Witcher  v.  Webb,  44  Cal.  127 913 

Witherspoon  v.  Staley,    (Tex.   Civ.  App.)    156   S.  W.   557 

105,   107,  309,   513,   849,  871 

Withington  v.  Nichols,  187  Mass.  575,  73  N.  E.  855 113,  519 


780  LAW  OF  OPTION   CONTRACTS 

Sections 

Witman  v.  City  of  Beading,  191  Pa.  134,  43  Atl.  140 412 

Wolf  V.  Lodge,  159  Iowa  162,  140  N.  W.  429 212,  321,  1218 

Wolfinger  v.  McFarland,  67  N.   J.   Eq.   678,   54  Atl.   862,  affd.   60 

Atl.  1119 1253 

Womack  v.  Coleman,  92  Minn.  328,  100  N.  W.  9 

107,   502,   608,   707,   1111,  1253 

Womaek  v.  Douglas,  157  Ky.  716,  163  S.  W.  1130 206 

Wood  V.  Dickey,  90  Va.  160,  17  S.  E.  818 1223 

Wood  V.  Edison  El.  111.  Co.,  184  Mass.  523,  69  N.  E.  364 113,  816 

Woodall  V.  Bnien,   (W.  Va.)   85  S.  E.  170 220,  224,  502,  862 

Woodall  V.  Clifton,   (1905)   2  Ch.  Div.  257 219 

Woodland  Oil  Co.  v.  Crawford,  55  Ohio  St.  161,  44  N.  E.  1093,  34 

L.  R.  A.   62 328 

Woodruff  V.  Semi-Tropic  Land  etc.  Co.,  87  Cal.  275,  25  P.  354 1003 

Woodruff  V.  Woodruff,  44  N.  J.  Eq.  349,  16  Atl.  4,  1  L.  R.  A.  380.  . 

124,  812,  1212,  1214,  1218,  1231,  1237 

Woods  V.  Early,  95  Va.  307,  28  S.  E.  374 206 

Woods  V.  Gaar  S.  &  Co.,  93  Mich.  143,  53  N.  W.  14 119 

Woods  V.  Hyde,  81  L.  J.  Ch.  295,  6  L.  T.  Rep.  (N.  S.)  317,  10  Wkly. 

Rep.   339 ; 812 

Woods  V.  McGraw,  127  Fed.  914,  63  C.  C.  A.  556 115,  862,  920 

Woodward  v.  Davidson,    150   Fed.    840 215,  322,  1203 

Woodworth  v.  McLean,  97  Mo.  325,  11  S.  W.  43 1104 

Worch  V.  Woodruff,  61  N.  J.  Eq.  78,  47  Atl.  725 214,  822 

Worrall  v.  Munn,  53  N.  Y.   185 1118 

Worrall  v.  Munn,  5  N.  Y.  229,  55  Am.  Dec.  330 1222 

Worthing  Corporation  v.  Heather,   (1906)   2  Ch.  Div.  532 219,  1102 

Worthington  v.  Herrmann,  180  N.  Y.  559,  73  N.  E.  1134,  affg.  88 

N.  Y.  S.  76,  89  App.  Div.  627 1005 

Wright  V.  Kayner,  150  Mich.  7,  113  N.  W.  779 210,  321,  827,  1211 

Wright  V.  Suydam,  72  Wash.  587,  131  P.  239..  109,  326,  811,  921,  1236 

Wristen  v.  Bowles,  82  Cal.  84,  22  P.  1136 840 

Wunderlich  v.  Palatine  F.  Ins.  Co.,  104  Wis.  395,  80  N.  W.  471 511 

Wyllie  v.  Matthews,  60  Iowa  187,  14  N.  W.  232 902 

Wynkoop  v.  Shoemaker,  37  App.  (D.  C.)  258 205 


X 

Xenos  V.  Wickham,  L.  E.  2  H.  L.  296 332 


Yerkes  v.  Richards,  153  Pa.  646,  26  Atl.  221,  34  A.  S.  R.  721 

110,  207,  1236,  1237,  1244 


TABLE  OP  CASES  781 

Sections 
York  ▼.  Searlea,  189  N.  T.  573,  82  N.  E.  1134,  affg.  ».  c,  90  N.  Y.  S. 

37,  97  App.  Div.  331 1204 

Young  V.  Latham,  132  Ala.  341,  31  So.  448 1123 

Young  V.  Matthew  Turner  Co.,  168  Cal.  671,  143  P.  1029 

502,  515,  1104,  1244 

Young  V.  Kuhwedel,  119  Mo.  App.  231,  96  S.  W.  228 114 

Young  Men's  Christian  Ass'n  v.  Dubach,  82  Mo.  475 419 

Young's  Ex'rs  v.  Singleton,  29  K7,  316 1118 


z 


Zeimantz  v.  Blake,  39  Wash.  6,  80  P.  822 912 

Zimmerman  v.  Brown,    (N.  J.  Eq.)   36  Atl.  675 847,  908,  914,  915 

Zimmermaa  t.  Bhodes,  226  Pa.  174,  75  AtL  207 209,  1204 


INDEX 

(Beference  is  to  sections) 

Abandonment.  See  Surrender. 
acts  constituting,  710. 
action  for  damages  under  alternative  stipulation,  where 

property  abandoned,  1109. 
bars  claim  for  damages,  under  option,  710  n.  3. 
bars  right  of  election,  710  n.  2. 
bars  suit  for  specific  performance,  710  n.  4. 
burden  of  proof  of,  is  on  optionor,  710  n.  12. 
effect  of,  by  optionee,  710,  1101, 
estoppel,  rule  of,  applied  to,  710  n.  2. 
is  question  of  fact,  710  n.  9. 

facts  amounting  to,  is  question  of  law,  710  n.  10. 
proof  of,  must  be  positive,  etc.,  710  n.  11. 

burden  of  proof  is  on  optionor,  710  n.  12. 
remedy  of  optionee,  on  abandonment  by  optionor,  1101. 

Abatement. 
counterclaim  for,  1246. 
of  price,  when  allowed,  1006,  1247  n.  1. 
provision  for,  in  decree,  1254  n.  3. 

Abstract  op  Title.   See  Title. 

election  made  conditional  by  requiring  delivery  of,  841, 

843-847. 
furnishing  of,  rests  in  contract,  1008. 

except  as  controlled  by  custom,  1008. 
furnishing  of,  by  optionor  as  waiver  of  default  by  optionee, 

1008,  929. 
stipulation    to    furnish    as    concurrent    with    payment    of 
price,  1008. 
rule  where  payment  is  act  of  election,  1008. 
waiver  by  optionee  of  time  to  deliver,  929  n.  2. 
waiver  of  non-assign  ability  of  option  by  delivery  to  assignee, 
U08. 

(783) 


784  LAW   OF   OPTION   CONTRACTS 

(Reference  is  to  sections) 

Acceptance.   See  Election,  Withdrawal. 
acts  constituting,  823-827,  831-836. 
acts,  may  amount  to,  817  n.  1. 
by  post  or  carrier,  818,  819. 
by  whom  made,  802-808. 
communication  of,  necessary,  814. 

uncommunicated  mental,  not  sufficient,  814. 
conditional,  is  rejection  of  offer,  837,  838.    (See  Conditional 

Election.) 
contract,  acceptance  of  offer,  raises,  301  n.  3,  871,  872. 

but  not  when  terms  of  offer  not  complete  and  definite, 
209  n.  1. 
definite  and  certain,  must  be,  821. 
definition  of,  801. 

distinguished  from  election,  801,  814. 
effect  of, 

as  working  equitable  conversion,  517. 

raises  bilateral  contract,  801,  514. 
failure  to,  ends  right  of  offeree,  862,  871,  872. 
furnishes  consideration  for  offer,  301  n,  4. 
notice  of,  necessary,  814. 
of  oral  offer,  when  sufficient,  415  n.  2  and  3. 
oral,  remedies  of  optionor  on,  1101,  417. 
oral,  sufficient,  when,  816,  818.    (See  Statute  of  Frauds.) 
place  of,  820. 
pleading  of,  1244  n.  12. 
qualified,  is  rejection  of  offer,  837,  838.    (See  Conditional 

election. ) 
retraction  of,  by  post,  818  n.  5,  871. 
time  of,  848-851. 
to  whom  made,  809-812,  818. 
varying  terms  of  offer,  effect  of,  838,  839. 

in  part,  not  good,  837  n.  1. 
vests  equitable  title  in  offeree,  514. 
waiver  of  time  of,  not  applicable  to  offers,  868  n.  2. 
withdrawal  of,  818  n.  5,  871. 
words,  may  amount  to,  817  n.  1. 
writing,  may  be  made  by,  817  n.  1. 
written  on  option  in  absence  of  offerer,  868  n.  2. 
written,  when  required,  816.    (See  Statute  of  Frauds.) 


INDEX  785 

(Beference  is  to  sections) 

AccroENT. 

timely  election  prevented  by,  when  equitable  relief  granted, 

863. 
timely  payment  or  tender  prevented  by,  when  equitable 

relief  granted,  938, 

Act  op  God. 
timely  election  prevented  by,  when  equitable  relief  granted, 

862-864. 

Adequacy  op  CoNsroERATiON.   See  Consideration. 

Adequacy  of  Remedy  at  Law.  See  Specific  Performance. 

Administrator.  See  Executor. 
as  party  to  suit,  1238,  1242. 

is  "legal  representative,"  of  deceased  lessor,  812  n.  5. 
"legal  representative"  distinguished  from  "personal  rep- 
resentative," 812  n.  5. 
notice  of  election  by,  808. 
notice  of  election  to,  812. 
option  rights  of  deceased,  passes  to,  606. 
payment  or  tender  of  price  by,  902. 
payment  or  tender  of  price  to,  903, 
power  of,  with  reference  to  granting  and  taking  options,  203. 

to  elect  for  next  of  kin,  808  n.  2. 

to  renew  lease,  203. 

under  option  to  repurchase,  808. 

Advancement. 

conveyance  by  way  of,  as  withdrawal  or  discharge  of  option 
right  in  lease,  708  n.  3. 

Advertising  Contract. 

advertising  as  act  of  election,  823. 
option  to  terminate,  117  n.  8. 

Agent,  Agency,   See  Principal  and  Agent. 

Agreement  op  Sale.   See  Sale. 
adequacy  of  consideration,  for,  324,  325. 
binds  vendee  to  purchase,  105. 

50 — Option  Contracts, 


786  LAW    OF    OPTION    CONTRACTS 

(Reference  is  to  sections) 

Agreement  of  Sale — Continued. 

distinguished  from  option,  105,  108,  109. 

distinguished  from  sale,  105. 

effect  of  alternative  stipulation,  1236  n.  5. 

effect  of  clause  providing  for  liquidated  damages.  1236  n.  4. 

effect  of  clause  providing  for  termination,  110,  117,  1222. 

mutuality  in,  105,  1217,  1218,  1236. 

Statute  of  Frauds,  when  within,  405,  401. 

Alien. 

right  of,  to  elect,  802  n.  1. 

Alienation. 
suspension  of,  power  of,  as  within  rule  against  perpetuities, 

221.    (See  Perpetuities.) 
suspension  of  power  of,  under  pool  of  stock  for  life,  215. 

Alternative  Stipulations. 

action  for  damages  under,  when  property  abandoned,  1109. 

as  within  Statute  of  Frauds,  402  n.  10. 

construction  of,  in  oil  lease,  124  n.  2. 

effect  on  promisor  of  failure  to  act,  118,  854, 

of  election  under,  118. 
election  under, 

first  with  promisor,  118. 

on  default,  passes  to  promisee,  118,  854. 
mutuality,  rule  of  applied  to,  1236  n.  5. 
relation,  rule  of  applies  to,  118. 

termination  of,  right  of  either  party  to  terminate,  118  n.  12. 
time  of  election  under,  854. 
title,  when  passes,  502, 
when  alternative  becomes  impossible,  118  n.  1. 

Answer.    See  Pleading,  Specific  Performance. 
abatement  of  price,  claimed  by,  1246  n.  2. 
counterclaim  in,  1246. 
damages  for  use  and  occupation,  1246  n.  2. 

for  withholding  possession,  1247  n.  3. 
defenses  available  by,  1248. 

inconsistent,  may  be  set  up  in,  1246  n.  2. 
in  suit  for  specific  performance,  1245. 


INDEX  787 

(Eeferenee  is  to  sections) 

Apportionment. 

of  rent,  on  exercise  of  option,  519,  113  n.  10. 

Appraisal.   See  Arbitration,  Price,  Valuation. 
as  fixing  time  of  election,  851  n.  2. 
distinguished  from  arbitration,  1212  n.  1. 
effect  of  failure  to  appoint  appraisers,  213. 
failure  by  optionee  to  appoint  appraisers  in  time,  equitable 
relief,  866. 

Arbitration.   See  Valuation. 

amount  of  payment  or  tender  under,  911. 

appraisal  fixes  time  for  election,  when,  851  n.  2,  1212  n.  9. 

arbitrators.    (Appraisers.) 

choice  of,  by  whom  made,  1212. 

effect  of  failure  to  appoint,  213,  1212. 

majority  of,  may  fix  price,  when,  1212. 

objection  to  qualifications  of,  1212  n.  9. 

power  of  court  to  appoint,  1212,  213. 

power  to  withdraw  appointment  of,  1212  n.  9. 

price  fixed  by,  is  conclusive,  in  absence  of  fraud,  1212  n.  9. 

qualifications  of,  1212  n.  9. 

relief  for  failure  to  appoint,  1212. 
covenant  or  condition,  provision  for,  which,  1212  n.  3. 

distinction  between,  1212  n.  3. 

rule  for  determining,  1212  n.  2. 
distinguished  from  valuation,  1213,  1212. 
election,  appraisal  as  fixing  time  for,  1212,  851  n.  2. 
equitable  relief,  for  failure  timely  to  appoint  arbitrator, 

1212. 
executed  agreement,  right  to  recover  value,  1212  n.  3. 
hearings  not  necessary,  to  fix  price,  when,  1212  n.  1. 
mutuality,  rule  of  applied  to,  1212  n.  9. 
notice  of  hearing  to  fix  price,  not  necessary,  1212  n.  1. 
pleading,  revocation  of,  1212  n.  9. 
possession  by  optionee  during,  1125  n,  9. 
price  fixed  by,  is  conclusive  in  absence  of  fraud,  1212  n.  9. 

power  of  court  to  fix,  1212,  213. 
rental  value  to  be  determined  by,  1212  n.  9. 
specific  enforcement  of  clauses  for,  1212. 


7.88  LAW   OF    OPTION    CONTRACTS 

(Reference  is  to  sections) 

Arbitration — Continued. 

time  of  election  upon,  1212  n.  9,  851  n.  2. 

to  fix  price  is  not,  1212  n.  1. 

valuation  distinguished  from,  1213,  1212. 

Assessments.   See  Taxes. 

allowance  of,  on  tender  or  payment,  909  n.  4. 

decree  requiring  plaintiff  to  pay,  1254  n.  3. 

default  in  paying  as  maturing  chattel  mortgage  debt,  119. 

street,  liability  of  optionee  to  pay,  1006  n.  4. 

Assignee.    See  Assignment. 

as  bona  fide  purchaser,  rule,  609,  610. 

of  second  option,  as,  515  n.  5,  516  n.  5. 
election,  right  of  to  elect,  802,  804. 
equities,  assignee  stands  in  shoes  of  assignor,  607. 
obligations  of  contract,  when  subject  to,  609. 
payment  by,  902. 
payment  to,  903. 
.     party  plaintiff  or  defendant,  1241,  1242. 

price,   assignee   to  purchase  for  same   price   as   assignor, 
610  n.  5. 

tender  by,  902. 

tender  to,  903. 

tender  of  his  note,  right  of,  to,  902  n.  2. 
specific  performance,  right  of,  by,  1238  n.  6,  1241  n.  1. 

Assignment.   See  Bankruptcy,  Death,  Insanity. 
agreement  to  sell,  is  not,  604  n.  2. 

assignability  the  rule,  non -assignability  the  exception,  605. 
assignee    as    hon^   fide   purchaser,    rule,    609,    610.     (See 
Assignee.) 
of  second  option,  516  n.  5,  515  n.  5. 
"assigns"  as  making  contract  assignable,  605. 
by  operation  of  law,  restriction  on  does  not  apply,  604  n.  2. 
certificate  of  title,  delivery  to  assignee,  effect  of,  on,  608. 
common  law  rule  as  to,  601. 
consideration,  assignment  as,  for  note,  610. 
consent  of  optionor  to,  when  necessary,  604. 


INDEX  789 

(Reference  is  to  sections) 

Assignment — Continued. 

co-tenants,  by  one  to  the  other,  607. 

covenant  for  renewal  of  lease,  lessor  not  relieved  from, 

when,  609  n.  9. 
covenant   to   renew   leases   or   purchase   as    running   with 

land,  607. 
covenant  for  perpetual  renewal  of  lease,  607  n.  2. 
credit  of  optionee  as  affecting  assignability,  604. 
death,  rights  under  option,  pass  to  whom,  on,  606. 
deceit,   action  for,   does  not  pass  to   assignee  of  option, 

601  n.  1. 
effect   of,    assignee   stands   in   "shoes"   of   assignor,    607, 

802  n.  1. 
election,  right  of  assignee  to  elect,  802,  804. 

must  have  acquired  entire  interest  of  assignor,  802  n.  3. 
election,  right  of,  passes  with,  609,  610. 
equitable  rule  as  to,  601. 
estoppel,  assignment  worked  by,  608. 
fraud,   action  for,   does   not  pass  to   assignee   of  option, 

601  n.  1. 
guaranty  of  re-payment  and  option  to  return,  assignability 

of,  601  n.  1. 
"heirs  and  assigns,"  as  making  contract  assignable,  605. 
"indenture  of  lease,"  assignment  as,  carries  option  therein, 

607. 
lease,  option  in,  to  purchase  or  renew  as  covenant  running 

with  land,  607. 
perpetual  renewal,  is  a  real  covenant  and  goes  with  land, 

607  n.  2. 
stipulation  against  assignment  of  lease  includes  option 
therein,  604  n.  2. 
lessor  not  relieved  from  covenant  for  renewal  of  lease  by 

conveyance  of  premises,  609  n.  9. 
obligation  of  contract,  when  assignee  subject  to,  609. 
offer  is  not  assignable  before  acceptance,  602. 
operation  of  law,  restriction  on,  does  not  apply,  604  n.  2. 
option,  assignment  of  held,  not  sale,  105  n.  5. 
option  is  assignable,  before  election,  when,  602. 


790  LAW    OF    OPTION    CONTRACTS 

(Reference  is  to  Bections) 

Assignment — Continued. 

option  is  assignable  after  election,  603. 

except  when  consent  of  optionor  is  necessary  to,  604. 
when  personal  to  optionee,  604. 
when  personal  credit  of  optionee  is  relied  on,  604, 
when  personal  services  or  skill  of  optionee  are  required, 
604. 
rule  when  services  have  been  performed,  604. 

parties  to,  wife  not  necessary,  when,  602. 

partner,  one  to  the  other,  on  right  to  renew  lease,  807. 

payment  to  optionee  as  against  his  assignee,  609  n.  9. 

payment  by  assignee,  902. 

payment  to  assignee,  903. 

payments,  recovery  of,  from  assignee,  610  n.  6,  609. 

personal  service  of  optionee  to  be  rendered   as  affecting 
assignability,  604. 
rule  when  services  have  been  performed,  604. 

price,    assignee    entitled    to    purchase   for   same    price   aa 
assignor,  610  n.  5. 

principal  and  agent,  right  of  optionor  against  principal,  609, 

re-purchase,  option  to,  on  stock,  assignability  of,  601  n.  1. 

return,   option  to,   and   guaranty   of   re-payment,    assign- 
ability, 601  n.  1, 

skill  of  optionee  as  affecting  assignability,  604. 

statutory  rule,  as  to,  601. 

stock,  option  to  re-purchase,  assignability  of,  601  n.  1. 

sub-lessee,  right  of,  607. 

tender  by  assignee,  902, 

tender  to  assignee,  903. 

tender,  right  of  assignee  to  tender  his  note,  902  n.  2. 

title,  stipulation  to  pass  on,  passes  with  option,  604  n.  8,  609. 
what  passes  to  assignee  on,  609. 

vests  in  assignee  rights  of  assignor,  at  time  of,  609. 

waiver,  as  affecting  right  of  assignment,  608. 

waiver  by  delivering  certificate  of  title  to  assignee,  608. 

wife,  when  not  necessary  party  to,  602. 

words  of  assignability,  effect  of,  605. 


INDEX  791 

(Eeference  is  to  sections) 

Attorney.   See  Principal  and  Agent. 

fees  of,  as  included  in  damages  for  breach,  1118  n.  6. 
of  optionee,  decision  on  title,  when  conclusive,  1007. 
of  optionor,  authority  of  to  elect  to  re-purchase,  803. 

Bailment. 

distinguished  from  sale,  111,  112. 

distinguished  from  sale  and  return.  111,  112,  507,  508. 

failure  to  return  property  as  election,  828,  830. 

title,  when  it  changes  under,  508. 

with  option  to  purchase,  what  is,  101,  508 

Bank  Notes. 

payment  or  tender  in,  912. 

Bankruptcy. 

as  affecting  option  to  return,  709. 

leasehold  estate  passes  to  assignee  in,  607  n.  2. 

of  optionor  as  breach  of  option  contract,  702  n.  1. 

Baseball  Player. 

effect  of  want  of  mutuality,  in  contract  of  employment 

of,  117. 
injunction  against,  to  enforce  negative  covenant,  1126,  117. 
option  to  terminate  contract  of  employment  with,  117. 

Bilateral  Contract. 
acceptance  of  offer  raises,  514,  801,  301  n.  3. 
adequacy  of  consideration  for,  324. 
assignment  of.     (See  Assignment.) 
breach  of.     (See  Breach.) 

consideration  to  support.     (See  Consideration.) 
damages  for  breach  of.    (See  Breach,  Remedies.) 
defined,  105. 
distinguished  from  option  under  rule  of  mutuality,  1215, 

1218. 
distinguished  from  unilateral  contract,  105  n.  1. 
distinguished  from  offer,  103. 
election  raises,  102,  105,  514. 
mutuality,  rule  of,  applied  to,  1215,  1218. 
offer  is  not  a  bilateral  contract^  103,  801,  814, 


792  LAW   OP   OPTION    CONTRACTS 

(Reference  is  to  sections) 

Bilateral  Contract — Continued. 
parties  to,  202,     (See  Parties.) 

remedies  for  enforcement,  1101-1126.     (See  Remedies.) 
seal  as  importing  consideration,  332.     (See  Seal.) 
specific  performance  of,  and  not  of  option,  1202. 

Bill  of  Complaint.    See  Specipig  Performance. 

Bona  Fide  Purchaser.    See  Assignment, 

accepted  offer  affects  purchaser  with  notice,  515. 

assignee  as,  609. 

assignee  of  second  option,  without  notice  of  first  option,  515 

n.  5,  516  n,  5, 
damages,  action  for,  against  optionor  conveying  to,  1110. 
election  and  rule  of  relation  as  applied  to,  514  n.  2. 
election,  notice  of  election  to,  810. 

offer,  unaccepted  does  not  affect  purchaser  with  notice,  515. 
option,  purchaser  with  notice  of,  takes  subject  to,  515. 
party  to  suit,  bona  fide  purchaser  as,  1242. 
payment  of  price  to,  903. 
possession  as  notice  of  tenant's  option  in  lease  to  purchase, 

515  n.  8, 
price,  payment  of,  when  necessary  to  constitute,  515  n.  10, 

610, 
purchaser  not  affected  by  notice  of  unaccepted  offer,  515. 
tender  to,  903, 

Bonds. 

agreement  to  repurchase,  not  within  Statute  of  Frauds, 
403  n.  4. 

Breach.    See  Remedies,  Renunciation. 
by  optionor, 
anticipatory, 

distinction  between  right  to  sue  before  time  limit  and 

waiver  of  performance,  702  n.  4. 
time  to  sue  on,  1251.     (See  Time  to  Sue.) 
bankruptcy  is,  702  n.  1. 
contingent  sale,  is  not,  702  n.  1. 


INDEX  793 

(Beference  is  to  sections) 

Breach — Continued. 

damages,  when  optionee  may  sue  for,  702.     (See  Dam- 
ages, Remedies.) 
distinguished  from  rescission,  712  n.  1. 
effect  of,  702. 

effect  of  bankruptcy,  702  n.  1. 
election  not  excused  or  waived  by,  702,  870. 
estoppel,  breach  of  oral  agreement  for  extension  does  not 

work  estoppel,  when,  412  n.  2. 
"first  refusal,"  breach  under,  1102  n.  1,  702  n.  1. 
mortgage  of  property  is  not,  1102  n.  1. 
remedies  for,  1101,     (See  Remedies.) 
rescission,  breach  as  ground  for  rescission,  712  n.  2. 
sale  of  property  is  not,  when,  702  n.  1,  1102  n.  1. 
sale  if  contingent,  is  not,  702  n.  1. 
by  optionee, 

"clean  up,"  failure  to  pay  percentage  of,  716. 

conditional  election,  waiver  of,  847. 

covenants  in  lease,  breach  of  as  affecting  option,  717  n.  2. 

damages,  failure  to  build,  716. 

deposit,  failure  to  make,  716. 

effect  of,  714. 

election,  failure  to  elect  is  not,  1103. 

election,  written  notice  of,  when  waived,  816  n.  1. 

conditional,  when  waived,  847. 
insure,  failure  to,  716. 
lease,  stipulation  against  assigning,  waiver  of,  by  lessor, 

608. 
paint,  failure  to,  716. 
payment,  failure  to  make,  716. 

timeliness  of,  when  waived,  923,  936. 
purchase  money,  failure  to  pay,  716, 
remedies  for,  1102.     (See  Remedies.) 
rent,  failure  to  pay,  715, 
repair,  failure  to,  716. 

return  goods,  failure  to,  under  option  to  return,  716. 
security  for  goods  furnished,  716. 
shaft,  mining,  failure  to  sink,  716, 


794  LAW   OF   OPTION    CONTRACTS 

(Eeference  is  to  sections) 

Breach — Continued. 

specific   performance,   breach,    as   ground   for   denying, 

913  n.  4. 
taxes,  failure  to  pay,  716. 
timber,  failure  to  cut,  716. 
title,  failure  to  perfect,  716. 
waiver  of,  by  optionor,  when,  717. 

acquiescence  in  erection  of  building,  717. 
expenditures  in  developing  property,  717. 
performance  prevented  by  optionor,  717. 
receipt  of  rent  after  it  is  due,  717. 
refusal  of  tender  for  renewal,  717. 
acts  not  amounting  to  waiver,  717. 

offer  by  optionee  to  make  good,  716  n.  4. 
failure  of  optionor  to  tender  deed,  does  not  excuse 
payment  of  rent,  717. 

Broker.    See  Principal  and  Agent. 

agreement  with,  as  option  or  agency,  114. 

as  person  entitled  to  sue  for  specific  performance,  1238. 

authority  of, 

can  not  buy  for  himself,  205. 
employed  to  sell  can  not  give  an  option,  205. 
employed  to  find  a  purchaser  has  not  performed  by  nego- 
tiating an  option,  205. 
employed  to  procure  an  option  has  not  performed  by  pro- 
curing an  agreement  of  purchase,  205. 
compensation  of,  when  entitled  to,  205. 
conduct  of, 

fraudulent,  205. 

taking  option  in  his  own  name,  205. 
Statute  of  Frauds,  agreement  for  division  of  commission,  as 
within,  402  n.  6. 
agreement  to  obtain  option  on  land,  as  within,  402  n.  6. 
full  performance  of,  by,  does  not  take  contract  of  employ- 
ment out  of,  418  n.  2. 

But. 

construed  as  not  requiring  payment  of  price  within  election 
time,  915  n.  1,  see  925  n.  1. 


INDEX  795 

(Reference  is  to  sections) 

Cash. 
construed  as  requiring  payment  of  price  as  part  of  election, 
916  n.  1. 

Certificate  op  Deposit.    See  Check. 
tender  of,  effect  of  failure  to  object  to,  912. 

Certificate  of  Title.    See  Abstract. 

Chattel  Mortgage.   See  Mortgage,  Real  Estate  Mortgage. 
option  in  to  accelerate  maturity  of  debt,  on  default,  119. 
clauses,  usual,  119. 

assessment  clauses,  119. 

execution  clauses,  119. 

interest  clauses,  119. 

insecurity  clauses,  119. 

tax  clauses,  119. 
debt  not  matured,  unless  option  exercised,  119. 
is  valid,  when,  119,  120. 
is  not  penalty  or  forfeiture,  120. 
mortgagor  can  not  force  mortgagee  to  exercise,  119, 
mortgagor  can  not  work  maturity,  119. 
negotiability  of  note  secured,  effect  of,  120  n.  7-12. 
removal  of  property  as  maturing,  119. 
right  of  mortgagee  not  arbitrary  and  absolute,  when, 

119  n.  5. 
statute  of  limitations,  when  starts,  see  120. 
validity  of,  119,  120. 
waiver  of  mortgagor's  default  by  mortgagee,  119. 

Check. 

election  made  conditional  by  tender  with,  842. 
tender  by,  is  good,  when,  907. 
effect  of  failure  to  object  to,  912. 

Choses  in  Action.    See  Statute  op  Frauds. 

City.    See  Municipality. 

Cloud. 

suit  to  remove,  1124.    (See  Suit  to  Quiet  Title.) 


796  LAW   OP   OPTION    CONTRACTS 

(Eef  erence  is  to  sections) 

Coal. 
right  of  optionor  to  payment  of  price  for,  under  lease,  etc., 
520. 

Complaint,  1124.    See  Specific  Performance,  sub-title  Com- 
plaint or  Bill. 

* '  Complete.  ' ' 

construed  as  requiring  payment  as  part  of  act  of  election, 
916  n.  1. 

Condition  Precedent. 

anticipatory  breach,  effect  of,  on  performance  of,  711,  702. 

cases  involving,  305,  304. 

construction  of,  124  n.  9. 

distinguished  from  condition  subsequent,  913  n.  2,  862  n.  4, 

872  n.  9. 
election  is,  801,  814,  839,  862. 

equity  can  not  relieve  against  breach  of,  when,  913  n.  2. 
payment  of  price  as,  839,  914,  1003,  1002. 
performance  of  as  consideration  distinguished  from  absolute 

promises,  304. 
to  exercise  of  option  privilege,  715,  717. 

Condition  Subsequent. 

distinguished  from  condition  precedent,  913  n.  2,  862  n.  4, 

872  n.  9. 
when  payment  is,  914. 

Conditional  (Qualified)  Election. 

agent  has  no  authority  to  consent  to,  838  n.  3. 
assent  by  optionor  to,  effect,  838  n.  3. 
cases  illustrating  rule  of,  840,  841,  842. 

of  unconditional  election,  so  held,  843-847. 
construction,  rule  of,  841  n.  1. 
discharge  of  option,  when,  838. 
effect  of,  838. 

discharges  contract,  when,  838. 

rejection  of  offer,  when,  838. 

rule  as  to  offers,  838. 

rule  as  to  options,  838. 


INDEX  797 

(Beference  Is  to  sections) 

Conditional  (Qualified)  Election — Continued. 
election  must  be  unconditional,  837,  838,  840,  841. 
election  must  be  unqualified,  838. 
election  claimed  to  be  conditional,  involving, 

application  of  insurance  money,  841,  512  n.  3. 

demand  for  receipt,  842. 

furnishing  abstract  of  title,  841,  843,  844,  845,  847. 

mortgage  to  secure  price,  847. 

parties  to  deed,  842,  843  n.  1,  844,  846,  847. 

payment  by  check,  842. 

place  for  delivery  of  deed,  841. 

timber  cut  on  optioned  property,  847  n.  9. 

time  and  place  of  performance,  845,  847. 

time  of  payment  of  installments,  841,  843  n.  1. 

title  to  property,  841,  842. 
inquiry,  mere,  does  not  make,  840  n.  3. 
objection  to  by  optionor,  failure  to  make  is  waiver,  869, 
847  n.  12. 

on  one  ground  waives  all  others,  847  n.  6. 
option  to  return,  rule  applies  to,  838  n.  3. 
oral  conditional  election  as  within  Statute  of  Frauds,  415. 
rejection  of  offer,  when,  838. 
Statute  of  Frauds,  when  within,  415. 
waiver  of,  by  optionor, 

by  failure  to  object,  869,  847  n.  12. 

under  "first  refusal,"  847  n.  7. 

Conditional  Agreement. 
option  contract  is,  101  n.  1. 

Conditional  Sale. 

option  in,  to  purchaser  to  pay,  or  refuse  to  pay,  not  essential 
to,  116  n.  3. 

Consideration.    (For  option.) 

acceptance  of  offer  raises,  301  n.  3,  303  n.  2. 
adequacy  and  sufficiency  of,  324. 
nominal  sum  as,  when,  325-328. 
cases  holding  insufficient,  327-330. 
cases  holding  sufficient,  325,  326. 
oil  and  gas  leases,  328-330. 


798  LAW   OF    OPTION    CONTRACTS 

(Eeference  is  to  sections) 

CoNsroERATiON — Continued. 

rule  at  law,  324. 

rule  in  equity,  324. 
acts,  when  performance  of,  is,  306,  307.  \ 

full  performance  required,  when,  306,  307, 

improvements  made,  312. 

investigation  of  property,  313. 

mining  options  and  leases,  308,  309,  314. 

part  performance  of,  306,  307. 

settling  on  land,  310. 
agreement  (verbal)  between  optionees  without,  516  n.  7. 
benefit  to  promisor,  as,  302  n.  2. 

defined,  302  n.  2. 
bilateral   contract,    consideration   for,    distinguished   from 

option,  324. 
contract  as,  for  option  not  therein,  319,  320. 
contract  as,  when  option  therein,  315,  316. 
deposit  on  price  as,  322,  323. 
detriment  to  promisee  as,  302  n.  2. 

defined,  302  n.  2. 
distinction    between    consideration    for    option    and    for 

bilateral  contract,  324. 
distinction  between  option  and  offer,  301,  102,  1217. 
double  options,  one  consideration  supports  both,  317. 
effect  of, 

prevents  optionor  withdrawing  or  revoking,  703. 

prevents  option  lapsing  by  death  of  optionor,  709 
extensions,  334. 

gas  lease,  sufficiency  of,  for,  328,  330. 
improvements  made,  as,  312. 
insufficient,  contract  not  enforceable,  303  n.  2. 
interest,  stipulation  to  pay,  is  not,  322  n.  1. 
investigation,  of  property,  as,  313. 
large,    as   showing   intention   to   vest   estate   in   optionee, 

501  n.  4. 
lease  supports  option  therein,  321. 
nude  pact,  offer  is,  301,  1217. 
offer  is  without,  301. 

a  nude  pact,  301,  1217. 


INDEX  799 

(Reference  is  to  sections) 

Consideration — Continued. 

consideration  for  converts  it  into  option,  301,  302. 

rule  in  France,  Scotland,  Holland,  301  n.  3. 

rule  in  Louisiana,  301  n.  3. 
oil  and  gas  leases,  sufficiency  of,  for,  328-330. 
one,  on  one  side,  supports  several  stipulations  on  the  other, 

317. 
option  as  consideration  for  another  contract,  318. 
option,    consideration    for,    distinct,    etc.,    from    that    for 
bilateral  contract,  324. 

must  be  supported  by,  301,  302,  102. 

or  evidenced  by  sealed  writing,  301,  332,  333.  (See  Seal.) 
option  in  agreement  of  purchase  to  resell  to  vendor,  315. 
option  to  repurchase,  315,  316. 
part  payment  on  price  as,  322,  323. 
part  performance  as,  306. 
payment  of  when,  301  n.  3,  303  n.  2. 
pleading  of,  1244  n.  5. 
pledge  of  option,  as  consideration  for  another  contract, 

318  n.  1. 
promise  as,  303-311. 

contingent,  when,  311, 

one  for  another,  when,  302,  303,  314. 

distinguished  from  condition  precedent,  304,  305. 

mutuality  of,  necessary,  302,  303. 
recital  of,  effect,  331,  333. 

conclusive  against  optionor,  when,  331. 

construed  as  promise  to  pay,  303  n.  2. 

evidence  to  contradict,  when  admissible,  331,  333. 
rent,  waiver  of  option  to,  as,  319  n.  1. 
repurchase,  agreement  for,  by  third  person,  302  n.  4,  315. 
seal,  effect  of  as  importing  consideration,  332,  333.    (See 

Seal.) 
withdrawal  of  option  by  optionor,  consideration  prevents, 

703. 
writing  imports,  331. 

need  not  be  expressed  in,  301  n.  3. 


800  LAW   OF    OPTION    CONTRACTS 

(Reference  is  to  sections) 

Consideration.    (For  Bilateral  Contract.) 
adequacy  of,  324,  1205. 
benefit  and  detriment,  as,  defined,  302  n.  2, 
common  law,  rule  as  to,  302. 

distinguished  from  consideration  for  option,  324. 
equity,  rule  as  to,  302-311. 
extensions,  334. 

oil  and  gas  leases,  sufficiency  of,  for,  328-330. 
promise  as,  302-305. 
recital  of,  effect,  331,  333. 
seal,  effect  of,  332,  333,  1205. 
what  constitutes,  302. 
writing,  when,  imports,  331. 

Construction. 
general  rules  of, 

clear  and  unambiguous  terms  control,  122. 

contract  construed  as  valid,   equitable,   reasonable   and 

operative  if  possible,  122,  222  n.  4. 
general  words  and  clauses  restricted  by  specific,  122. 
intention  of  parties  must  be  given  effect,  122. 
intention  gathered  from  whole  contract,  122,  208, 
oral  negotiations  merged  in  writing,  122  n.  3. 
particular  controls  general  description,  214  n.  1. 
parties,  construction  by,  when  adopted,  122, 
place  of  performance,  controls,  when,  122. 
prior  option  may  be  referred  to  to  discover  intention, 

122  n.  4. 
several  contracts  relating  to  same  transaction  construed 

together,  122  n.  4. 
words  are  given  their  ordinary  meaning,  122. 
except  technical  words,  etc.,  122. 

construed  against  party  using  in  preparation  of  con- 
tract, 122. 
rule  does  not  apply  to  grant  of  franchise,  122  n,  10. 
written   contract  deemed  to   embody   whole   agreement, 

122  n.  3. 
written  matter  controls  printed,  122, 


INDEX  801 

(Beference  is  to  sections) 

Construction — Continued. 

of  particular  contracts  and  clauses, 

agreement  with  brokers  and  agents,  114. 
agreement  by  correspondence  or  wire,  208,  818,  819. 
alternative  stipulations,  118,  117  n.  3. 

in  oil  lease,  124  n.  2. 
amount  of  tender  or  payment,  908. 
arbitration  and  valuation  clauses,  213,  911,  1212. 
condition  precedent,  124  n.  9. 
conditional  election,  841  n.  1. 
delivery  of  deed,  1003  n.  4. 
description  of  property,  214. 
employment,    contract    of,    right    of    discharge    under, 

117  n.  3. 
equitable  conversion,  517  n.  5. 
extension  of  lease,  834. 
forfeiture  clauses,  109. 
lease,  covenants  for  renewal  of,  124,  834. 
liquidated  damage  clauses,  109. 
loan  with  option  to  purchase,  116  n.  3. 
meaning  of, 

"buy,"  as  making  payment  act  of  election,  915  n.  1. 

"cash"    as    making    payment    act    of    election,    916, 
924  n.  2. 

"complete"  as  making  payment  act  of  election,  916  n.  1. 

"fair  market  price,"  211  n.  6. 

"first  option,"  211  n.  6. 

"first  privilege,"  211  n.  6. 

"first  opportunity"  to  purchase,  124  n.  3. 

option,  122  n.  5. 

refusal,  211  n.  6,  212,  122  n.  4. 

right  of  pre-emption,  211  n.  6. 

"sold,"  105  n.  4. 
mining  leases,  1211  n.  7. 
option  to  purchase,  if  liked.  111,  112. 
option  to  mature  chattel  mortgage  note,  119. 
option  to  mature  debt  secured  by  real  estate  mortgage,  120. 
option  or  deed,  115. 
option  or  offer.  103,  104. 

51 — Option  Contracts. 


802  LAW   OF    OPTION    CONTRACTS 

(Reference  is  to  sections) 

Construction — Continued. 
option  or  mortgage,  115. 
option  or  pledge,  116. 
option  or  sale,  105-109. 
option  or  trust,  116. 

option  to  purchase  or  option  to  return,  111,  112. 
option  to  terminate  contract,  117. 
partnership,  option  on,  to  terminate  or  renew,  116  n.  5. 
penalty  clauses,  109. 
perpetual  renewal  of  lease,  124  n.  1. 
perpetuities,  222  n.  4,  124  n,  1. 
power  of  attorney,  204. 

price  as  involving  "first  refusals,"  211,  212. 
price  as  involving  arbitration  and  valuation  clauses,  213, 

1212-1213. 
purchase  with  option  to  return.  111,  112. 
repurchase  clause  in  deed,  124  n.  9. 
sale  or  agency,  114. 

sale  or  bailment  with  option  to  purchase,  111,  112. 
sale  and  return.  111,  112. 
sale  on  trial  or  approval,  112. 
sale  with  option  to  rescind,  112  n.  3. 
time  as  essence  of  election,  124  n.  9. 
time  for  exercise  of  option,  848-862. 

Contract.   See  Bilateral  Contract. 

consideration  for,  301,  334,  1205.    (See  Consideration.) 

construction  of.    (See  Construction.) 

joint  or  several,  811,  805,  806.    (See  Titles  "joint") 

option  to  terminate,  117.    (See  Titles  "option.") 

parties  to,  202-207.    (See  Parties.) 

pleading  of,  1120,  1244.    (See  Pleading.) 

within  Statute  of  Frauds,  rule,  419. 
substitution  of  new  for  old,  713. 

Conversion.    See  Equitable  Conversion. 
of  option,  action  for,  1115  n.  2. 

Conveyance. 

of  title.    (See  Abstract,  Deed  of  Conveyance,  Title.) 


INDEX  803 

(Eeference  is  to  sections) 

Corporation.   See  Stock  of  Corporation. 
liability  of  promoter  of,  for  fraud,  217  n.  6. 
option  to  repurchase  its  stock,  validity,  215. 
option  on  stock,  as  scheme  to  control  corporation,  validity, 

215. 
power  of  president,  to  surrender  option,  710  n.  12. 
power  to  take  option  on  its  own  stock,  215  n.  11, 

Costs. 

as  affected  by  tender,  906. 

as  element  of  vendee's  damages,  1118  n.  6. 

Counterclaim. 

abatement  of  price,  claimed  by,  1246  n.  2. 

damages  for  use  and  occupation,  claimed  by,  1246  n.  2. 

when  may  be  filed,  1246. 

Counter-Ofper, 

conditional  or  qualified  election  as,  838  n.  4. 

Covenant  Running  with  Land.   See  Assignment,  Lease. 

Cross-Complaint. 
when  may  be  filed,  1246. 
ejectment,  1246. 

not  in  Justice's  Court,  1246  n.  3. 
rescission,  1245  n.  5. 
unlawful  detainer,  1246. 

Custom. 

as  to  furnishing  abstract  of  title,  1008. 
construction  of  contract  to  conform  to,  122. 

Damages.    See  Remedies. 

action  by  optionor  for,  under  oral  election,  1101. 
action  by  optionor  for  under  binding  election,  1101. 
action  by  optionor  for  not  electing,  none,  1101  n.  1,  1103. 
action  by  optionee,  for,  1102,  1104,  702. 
action  for,  under  anticipatory  breach,  702. 
against  telegraph  company  for  error  in  telegram,  1114. 
for  fraud  and  misrepresentation,  when,  217. 
for  refusal  to  renew  lease,  1102  n.  1. 


804  LAW    OF    OPTION    CONTRACTS 

(Eeference  is  to  sections) 

Damages — Continued. 

in  lieu  of  specific  performance,  when  granted,  1247. 
measure  of,  for  misrepresentation  by  optionee  on  assign- 
ment, of  price  paid  for  option,  609  n.  3. 
measure  of,  for  breach  by  optionor,  of  option  contract,  1104. 
measure  of,  for  breach  by  optionor,  of  bilateral  contract, 
1118. 
cost  and  attorney's  fees,  1118  n.  6. 
interest,  1118. 
loss  of  profits,  rule,  1118. 
measure  of,  for  breach,  by  optionee,  of  bilateral  contract, 

1116. 
measure  of,  for  breach  of  agreement  to  sell  or  buy  personal 
property,  1119. 

Death.   See  Administrator,  Executor. 

as  event  for  exercising  option,  validity  of,  215, 

effect  of,  as  working  equitable  conversion,  517. 

lease  to  partnership,  not  revoked  by  death  of  one  partner, 

807. 
of  either  party,  causes  offer  to  lapse,  606,  709. 

but  other\vise  as  to  option,  606,  709. 
of  optionee,  remedy  of  optionor  on,  1101. 
of  optionee,  notice  of  election  by  representative,  808. 
of  optionor,  as  working  waiver  of  tender  of  price,  when, 

937. 
of  optionor,  notice  of  election  to  representative,  812. 

Debt. 

of  partnership,  payment  of  on  election,  520. 

option  is  not,  against  city,  215  n.  11. 

option  is  not  taxable  as  debt,  when,  506. 

option,  prior  to  election,  is  not,  501  n.  1. 

option  prior  to  election,  relation  of  debtor  and  creditor 

does  not  exist,  501  n.  1. 
rule  for  application  of  payments,  does  not  apply,  501  n.  1. 
tender  does  not  discharge,  906. 


INDEX  805 

(Eeferenee  is  to  sections) 

Decree.   See  Judgment. 

form  and  contents  of,  in  specific  performance,  1254. 
ag'ainst  purchaser  with  notice,  1254. 
allowance  as  to  taxes,  1254  n.  3. 
allowance  for  timber  cut,  1254  n.  3, 
allowance  for  use  and  occupation,  1254  n.  3. 
allowance  to  purchaser  with  notice  of  moneys  paid  by 

him,  1254  n.  3. 
allowing  removal  of  improvements,  1254  n.  3. 

or  damages  in  lieu  thereof,  1254  n.  3. 
lien  of,  on  land,  1254. 
provision  in,  for  abatement  for  dower  interest  of  wife, 

1254  n.  3. 
provision    in,    for    abatement    for    outstanding    option, 

1254  n.  3. 
provision  in,  for  abatement  for  physical  encumbrance, 

1254  n.  3. 
provision  in,  for  bond  to  cover  cost  of  sewers,  1254  n.  3. 
requiring  plaintiff  to  pay  street  assessment,  1254  n.  3. 

Deed  of  Conveyance.   See  Abstract,  Title. 
as  discharge  of  the  contract,  1001. 
distinguished  from  option,  115. 
election  made  conditional  on  delivery  of,  at  certain  place, 

841. 
election  made  conditional  on  signature  of  heirs  to,  842. 
form  and  sufficiency  of,  1005-1008. 
must  conform  to  contract,  1004. 

boundary  lines  of  reserved  tract,  1005  n.  12. 

encumbrances,  1006. 

execution  by  husband  and  wife,  1004. 

limitations  and  restrictions  may  not  be  inserted  in, 
1004,  1005  n.  6. 

objections  to,  when  waived,  1004. 

survey  of  land,  1008. 

to  part  of  land,  1005  n.  12, 

warranty,  facts  not  amounting  to,  1005  n.  12. 

when  improvements  burn,  1005  n.  12. 
mutuality  of  covenants  in  indenture,  417  n.  4. 


806  LAW   OP   OPTION    CONTRACTS 

(Eeferenee  is  to  sections) 

Deed  op  Conveyance — Continued. 

mutuality  of  covenants  in  deed  poll,  417  n.  4. 
tender  of,  by  whom, 

American  rule,  1002. 

English  rule,  1002. 

under  option  to  resell,  1002  n.  11. 

under  option  to  repurchase,  1002  n.  11. 

construction  of  clauses,  rule,  1003  n.  4. 

election  is  necessary  to  entitle  to,  1003  n.  6. 

effect  of  refusal  of  optionor  to  execute,  on,  1002. 

facts  excusing  or  waiving  tender,  1002. 

failure  of  optionor  to,  as  excusing  tender  of  price,  1002. 

of  re-conveyance  necessary  to  defeat  recovery  on  note  for 
price,  112  n.  3. 

when  delivery  of  deed  and  payment  of  price  are  con- 
current, 921,  922,  1003  n.  4. 
time  of  delivery  of,  1002. 

on  or  after  election,  1002,  1003. 

reasonable,  rule  as  to,  1003,  1002. 

concurrent  covenants,  1002  n.  12,  1003. 

tender  of  price  as  condition  precedent,  1002,  1003. 

time  of,  as  essence,  when,  921  n.  2. 

time  of  not  of  essence,  when,  1002,  1003,  1006,  1008,  n.  5. 

under  option  to  re-sell,  1002  n.  11. 

under  option  to  re-purchase,  1002  n.  4. 

when  both  parties  are  in  default,  1003  n.  4. 

when  price  is  payable  in  installments,  1003. 

Definition. 

of  acceptance,  801. 

of  agreement  of  sale,  105. 

of  bailment  with  option  to  purchase,  101,  111. 

of  ''benefit"  as  consideration,  302  n.  2. 

of  bilateral  contract,  105  n,  1. 

of  "detriment"  as  consideration,  302  n.  2. 

of  election,  801,  813,  817. 

of  "first  chance,"  212  n.  2. 

of  "first  opportunity,"  212. 

of  "first  option,"  211  n.  6. 

of  "first  privilege,"  211  n.  6. 


INDEX  807 

(Reference  is  to  sections) 

Definition — Contimied. 

of  "first  refusal,"  211  n.  6. 

of  mutuality  of  assent,  1214. 

of  mutuality  of  obligation,  1214. 

of  mutuality  of  remedy,  1214. 

of  oifer,  103. 

of  option  to  purchase,  101. 

of  option  to  sell,  101. 

of  option  to  return,  111. 

of  option  to  re-purchase,  101. 

of  pre-emption,  101,  211  n.  6. 

of  "preferential  right,"  101. 

of  redemption,  101. 

of  "representative,"  812  n.  5. 

of  rescission,  712. 

of  sale,  105. 

of  sale  and  return,  101,  111. 

of  sale  on  trial  or  approval,  101,  111. 

of  "satisfactory  title,"  1005  n.  1. 

of  tender,  906. 

of  unilateral  contract,  105  n.  1. 

Delivery. 

of  option  contract,  necessary,  208,  103. 

De  Minimis. 

rule  of,  applies  to  amount  of  tender,  908  n.  1. 

Demurrer, 

to  complaint,  1246. 

equities  not  considered  till  answer  filed  and  proofs  made, 
1246  n.  1. 

Description.    See  Statute  op  Frauds. 

insufficient,  renders  contract  incomplete  and  void,  214. 
of  optioned  property,  sufficiency  of,  214. 
rule  as  to  personal  property,  214. 
rule  of  construction,  214  n.  1,  122. 

sufficiency  of,  when  both  parties  acted  under  lease,  214  n.  1. 
when  parol  evidence  admitted  to  identify  the  property, 
214,  123. 


808  LAW    OF    OPTION    CONTRACTS 

(Reference  is  to  sections) 

Detainer. 

extension  of  option,  1125. 

injunction  to  restrain,  1126. 

licensee  in  possession,  1125. 

possession  pending  arbitration  proceedings,  1125  n.  8. 

relation  of  landlord  and  tenant,  necessary  to,  1125. 

removal  of  improvements,  1125  n,  8. 

sufficiency  of  answer,  1125  n.  8. 

title,  estoppel  to  deny,  1125. 

unlawful,  Mhen  lies,  1125. 

Discharge.    See  Estoppel,  Waiver. 
see  Abandonment,  710. 

Bankruptcy,  709. 

Breach,  702,  714-717,  1101,  1102. 

Death,  709. 

Insanity,  709. 

Laches,  1250. 

Non-performance  by  optionee,  714. 

Performance  (Election),  719.    (See  Election.)_ 

Renunciation,  711. 

Rescission,  712. 

Revocation,  703-706. 

Statute  of  Limitations,  1252. 

Substitution  of  New  Contract,  713. 

Surrender,  710. 

Time  Limit,  Expiration  of,  707,  862. 

Withdrawal,  703-706. 
generally,  701-719. 

breach  by  optionor  before  time  limit  is  not,  702. 

conditional  election  or  acceptance  is,  when,  718,  837-841. 

deed  of  conveyance  is,  when,  1001. 

election  is,  719. 

new  lease  as  surrender  of  option  in  old,  113  n.  10. 

notice  terminating  lease,  113  n.  10. 

option  giving  optionee  right  to  investigate,  etc.,  708. 

option  reserving  right  to  sell  property,  708. 

option  to  terminate,  708. 

refusal  by  optionee  to  purchase  under  "first  refusal," 
708  n.  6. 


INDEX  809 

(Reference  is  to  sections) 

Discharge — Continued. 

tender  of  money  payment  on  price  is  not,  943,  906. 
tender  of  performance,  is,  when,  943,  906. 

Discovery. 

bill  to  discover  who  purchaser  is,  under  "first  refusal," 
1121  n.  3. 

Discretion  of  Court.    See  Specific  Performance. 

Dividends.    See  Stock  of  Corporation. 
on  stock  optioned,  payment  to  whom,  518. 
tender  of,  under  agreement  to  repurchase,  518  n.  2. 

Donee.   See  Trustee, 

of  power  of  sale,  can  not  grant  a  future  option,  203  n.  1. 

Dower  Right  of  Wipe. 

allowance  for,  in  decree,  1254  n.  3. 

assignment  by  optionee  alone,  before  election,  207. 

bar  to  specific  performance,  when,  1243. 

death  of  husband,  effect  of,  207  n.  7. 

husband  has  no  power  to  grant  option  on,  207. 

option  is  not  conveyance  under  Montana  Statute  so  as  to 

bar  dower,  207  n.  7. 
outstanding,  as  waiver  of  tender  of  price,  936. 
when  bound,  207. 
when  released  by  vdfe,  207. 
wife  of  optionee  has  none  prior  to  election,  207. 
wife  of  optionor  has  none  when  option  granted  prior  to 

marriage,  207. 
wife  can  not  be  compelled  to  release,  1243. 
wife  as  party  to  suit  for  specific  performance,  1243. 

Draft. 

payment  or  tender  by,  912. 

Duress. 

effect  of  on  option,  217. 


810  LAW   OF    OPTION    CONTRACTS 

(Reference  is  to  sections) 

Ejectment. 
by  optionor,  when  optionee  in  default,  1123. 
injunction  to  restrain,  1123  n.  8. 
plaintiff  must  rely  on  strength  of  his  title,  1123  n.  8. 
rule  when  option  is  in  lease,  1123. 
rule  when  optionee  has  elected,  1123. 
sufficiency  of  optionor 's  title,  immaterial  to,  1123  n.  8. 
tender  of  deed  not  necessary,  1123  n.  8. 
by  optionee,  when,  1123. 

Election.    See  Acceptance,  Conditional  Election,  Exten- 
sions, Statute  of  Frauds. 
acceptance,  election  distinguished  from,  801. 
acceptance  of  offer,  distinguished  from,  838,  103, 
accident,  equitable  relief,  when  granted,  863,  864. 
agreement,  election  does  not  require  the  assent  of  optionor, 

801  n.  2,  814. 
act,  election  may  consist  of,  813  n.  1,  814  n.  5-8,  817. 
act  of  God,  equitable  relief,  when  granted,  862,  864. 
acts  constituting,  on  particular  facts,  823-836. 
acceptance  of  report  of  engineer,  823  n.  7. 
bringing  injunction  suit,  823. 
demand  for  payment  of  note,  823,  824. 
endorsement  on  option,  825. 
improvements  and  possession,  827. 
making  payments,  823. 
marking  the  trees,  823. 
possession  and  improvements,  827. 
possession  and  use  of  premises,  825. 
possession  and  removal  of  personal  property,  827  n.  6. 
renewal  and  extension  of  leases, 

distinction  between  renewal  and  extension,  831,  834. 

holding  over  as,  831-835. 

rule  where  higher  rental  is  paid,  832. 

rule  where  same  rental  is  paid,  833. 

rule  when  written  or  formal  notice  is  required,  835. 

rule  where  lessee  required  to  give  notice  to  terminate, 

836. 
rule  where  optionor  has  option  to  terminate  or  extend, 
836. 


INDEX  811 

(Reference  is  to  sections) 

Election — Continued. 

statement  of  readiness  to  pay  price,  824. 

statement  as  to  location  of  plant  and  readiness  to  pay 

price,  824. 
statement  of  desire  to  renew,  824,  825. 
suit  for  injunction,  823. 

taking  possession  and  removing  property,  823,  827. 
tender  of  deed,  823,  825. 
tender  of  price,  823, 
vote  of  board,  826. 
vote  of  town,  826. 
Bale  and  return,  828-830. 

collecting  dividends  on  stock  is  election  to  purchase,  829. 

failure  to  return  as  election  to  purchase,  828-830. 

loaning  property  to  another  is  election  to  purchase,  830. 

mortgage  by  purchaser  is  election  to  purchase,  828  n.  3. 

notice  with  tender  of  property  not  sufficient  as  election 
to  return,  829,  830. 

refusal  to  allow  goods  to  be  moved  is  election  to  pur- 
chase, 830. 

refusal  to  pay  price  as  election  to  purchase,  830. 

retention  of  goods  is  election  to  purchase,  830. 

tender  and  return  of  goods  is  election  to  return,  829. 

using  property  as  election  to  purchase,  830. 
sale  on  trial  or  approval.    (See  sub-title  ''Sale  and  Re- 
turn," supra.) 
acts,  on  particular  facts,  not  constituting,  823-836. 
advertising,  823. 
arrangements  for  renewal,  825. 
bailment,   with   option   to   purchase,   failure   to   return, 

830  n.  10-12. 
complaint  as  to  merchandise,  824. 
demand  for  information,  824. 
endorsement,  825  n.  5. 
equivocal  acts,  824. 
expression  of  opinion,  824. 
gift  of  property,  823. 
inquiry,  merely,  824. 
letters,  etc.,  as,  825. 


812  LAW  OP   OPTION   CONTRACTS 

(Beference  is  to  sections) 

Election — Continued. 

opinion,  expression  of,  824. 

ordinance  of  city,  826. 

possession,  statement  as  to  time  of  taking,  824. 

possession  and  improvements,  827. 

repairs  of  property,  823. 

request  for  extension,  824. 

statement  of  intention,  824. 

vote  of  board,  826  n.  5. 
alternative  option,  time  to  elect  under,  854,  849  n.  5. 
appraisal  clause,  time  to  elect  under,  851  n.  2. 
assent  of  optionor  not  necessary  to,  801  n.  2,  814  n.  1. 
"at  any  time,"  construction  of,  as  to  time  of  election,  858, 

1252. 
bailment,  with  option  to  purchase, 

failure  to  return  is  not  election  to  purchase,  830  n.  10-12. 
bilateral  contract,  election  raises  but  does  not  make,  801  n.  2, 
105,  514. 

untimely  election  does  not  raise,  849. 
breach  by  optionor  does  not  excuse  or  waive,  when,  702,  870. 
by  whom  made,  802-808. 

administrator,  808. 

agent,  803,  802. 

alien,  802  n.  1. 

assignee,  804,  802. 

attorney,  803. 

executor,  808,  802. 

fiduciary  relation  to  optionee,  person  standing  in,  802  n.  5. 

heirs,  808. 

husband,  803. 

joint  optionees,  805,  806. 

joint  tenants,  805,  806. 

mortgagee,  804  n.  2. 

optionee,  802. 

owner  of  equitable  interest,  802  n.  1,  804  n.  2. 

partners,  806a,  807. 

purchaser  at  execution  sale,  804  n.  3. 

representative  of  deceased  optionee,  808,  802. 

sub-lessee,  802  n.  1. 


INDEX  813 

(Beference  ia  to  sections) 

Election — Continued. 

tenants  in  common,  805,  806. 
under  alternative  stipulation,  118,  854. 
undisclosed  principal,  802,  803  n.  2. 
"by"  a  certain  date,  construction  as  to  time  of  election, 

850  n.  9. 
carrier,  notice  of,  by,  818,  819. 
certain,  notice  of,  must  be,  821. 

communication  of,  to  optionor,  necessary  when,  814,  823  n.  1. 
concurrence  of  optionor  in,  not  necessary,  814  n.  4,  801  n.  2. 
condition  precedent,  election  is,  862,  801  n.  2. 
conditional,  837,  838,  840. 

effect  of,  837-842. 
conduct,  election  may  be  inferred  from,  817  n.  1. 
construction  as  to  time  of,  848-862. 

rule  of  strict  applies  to  condition,  124  n.  9,  848. 
contingency  as  fixing  time  of,  848  n.  2. 
contract,  bilateral,  when  election  raises,  when,  849,   102. 

105,  514. 
day,  rule  as  to  including,  etc.,  850. 

fractions  of  not  counted,  850. 
definite,  notice  of,  must  be,  821. 
definition  of,  801,  813. 
discharge,  notice  of  election  as,  719. 
distinguished  from  acceptance,  801. 
distinguished  from  acceptance  of  offer,  838,  103. 
distinguished  from  payment,  914. 
distinguished  from  performance,  839,  843-847. 
effect  of, 

binds  optionee  to  performance,  when,  871,  1101. 
binds  optionor  to  performance,  when,  871,  1101. 
bilateral  contract,  turns  option  into,  when,  514,  102,  105. 

if  made  by  authorized  person,  804  n.  2. 
conditional  election  is  rejection,  when,  837-844. 

or  one  varying  terms,  837. 
consideration,  on  acceptance  of  offer,  price  is,  301  n.  4. 
converts  option  into  binding  promise  to  convey,  871. 

raises  agreement  of  sale  and  purchase,  when,  871. 
equitable  conversion,  worked  by,  when,  517. 


814  LAW   OF    OPTION    CONTRACTS 

(Reference  is  to  sectiona) 

Election — Continued. 

homestead,  eft'eet  of,  on  right  to  declare,  872. 

lease  renewed  by,  on  same  terms,  872. 

mutuality  arises  on,  when,  1224-1236. 

oral  election,  rights  of  optionor  under,  417,  1101. 

oral  election,  rights  of  optionee  under,  1102. 

possession,  entitles  optionee  to,  on  payment  of  price,  872. 

(See  Possession.) 
purchase  money,  optionor  becomes  equitable  owner  of, 

on,  872,  514. 
rent,  payment  of  under  lease  ceases,  on,  871. 
remedies  of  optionor,  on,  1101. 
remedies  of  optionee,  on,  1102. 

retraction,  election  can  not  be  withdrawn,  818  n.  5,  871. 
title,  optionee  becomes  equitable  owner,  on,  514,  872. 
vendor  and  purchaser,  relation  of,  arises  on,  872  n.  3,  514. 
withdrawal,  election  can  not  be  withdrawn,  818  n.  5,  871. 
effect  of  failurfe  to  elect, 

ends  right  of  optionee  to  purchase,  871,  872  n.  9. 
forfeits  payments  made  to  optionor,  872  n.  9. 
is  discharge  of  option,  837,  862,  871. 
is  not  a  breach  on  the  part  of  optionee,  1103. 
on  option  to  return,  871,  828-830. 

option    can    not   be    revived    except   by   new    contract, 
872  n.  10. 
elements  of,  813. 
equitable  relief  for  untimely,  863-870,    (See  infra,  sub-title 

"Time  of.") 
escrow,  time  of  election  under,  857  n.  7. 
essence,  time  of,  as,   862,  848,  849.     (See  infra,  sub-title 

"Time  of.") 
estoppel,  rule  of  applies  to  sufficiency  of  election,  804  n.  2. 

(See  Estoppel.) 
estoppel,  election  necessary  to  invoke  rule  of,  412  n.  4. 
extension  of  time  to,  334,  409-413,  859-861.    (See  Extension, 

Statute  of  Frauds.) 
failure  to  elect,  effect  of,  871,  862. 
forfeiture,  rule  of,  does  not  apply  to  time  of,  862. 


INDEX  815 

(Eeference  is  to  sections) 

Election — Continued. 

form  of,  must  conform  to  terms  of  option,  801,  815. 

or  those  implied  by  law,  801,  815. 
formal,  may  be  dispensed  with,  814. 
fraction  of  day,  not  counted  in  time  of,  850. 
"from,"  a  fixed  date,  construction  of,  as  to  time  of  elec- 
tion, 853  n.  2. 
holding  over  under  option  in  lease   to  renew  or  extend, 
831-835.    (See  sub-title,  "acts,  renewal  and  extension 
of  leases.") 
holidays,  rule  as  to  excluding  or  counting,  850. 
hour,  rule  applies  to,  849  n.  2. 
inequitable  conduct  of  optionor  as  ground  for  equitable 

relief  to  optionee,  863. 
inventory,  making  of,  as  fixing  time  for  election,  848  n.  1. 
lease  containing  option,  time  to  elect  under,  852.    (See  sub- 
title "Time  of,"  infra.) 
mental    determination    to    elect,    uncommunicated,    is    not 

election,  814. 
mining  options,  time  as  being  of  the  essence  of  election 

under,  920  n.  6. 
mistake  as  to  time  of,  equitable  relief,  865. 
mode  of,  controlled  by  term  of  option,  801,  815,  837. 

or  by  terms  implied  by  law,  801,  815. 
notice  of,  by  post,  telegram  or  carrier,  818,  819. 
effective  on  deposit,  818,  819  n.  5. 
effective  on  deposit  though  error  or  delay  in  transmission, 

818. 
effective  though  not  received  by  optionor,  818. 
must  be  posted,  819. 
must  be  properly  addressed,  819. 
postage  on,  must  be  prepaid,  819. 
telegram  must  be  paid  for,  819  n.  5. 
presumption  as  to  receipt  of  letter,  819  n.  5. 
presumption  as  to  receipt  of  telegram,  819. 
when  personal  notice  of  election  under  option  by  carrier 

or  post,  is  sufficient,  820. 
when   optionor    reserves   right    to    withdraw    by   posted 
letter,  815  n.  5. 


816  LAW   OF   OPTION    CONTRACTS 

(Reference  is  to  sections) 

Election — Continued. 

when  option  provides  it  shall  be  binding  on  receipt  of 
notice,  819. 

when  offer  by  wire  is  to  be  followed  by  letter,  818  n.  5. 

when  answer  required  by  return  mail,  849  n.  3. 

when  option  by  wire  and  election  by  letter,  818  n.  3. 

when  option  by  letter  and  election  by  wire,  818  n.  3. 
notice  of, 

alone  (without  payment,  or  other  act)  as  election,  801  n.  1. 

as  discharge  of  option,  719. 

as  to  part  of  the  property,  effect  of,  822,  837  n.  1. 

by  whom  given,  802-808. 

to  whom  given,  809-812. 

estoppel,  rule  of,  applies  to  sufficiency  of,  804  n.  2. 

formal  may  be  dispensed  with,  814. 

mere  mental  determination,  uncommunicated,  is  not,  814. 

must  be  definite  and  certain,  821,  824. 

must  be  unequivocal,  824,  821. 

must  conform  to  terms  of  option,  837,  838,  840. 

must  be  communicated,  when,  814,  823  n.  1. 

personal,  oral,  when  sufficient,  818,  816. 

personal,  oral,  when  sufficient  under  option  by  carrier, 
820. 

subscription,  when  not  necessary,  816  n.  1. 

subscription,  by  third  party,  802  n.  1. 

written, 

when  required,  816.    (See  Statute  of  Frauds.) 
when  waived,  835  n.  5,  816  n.  1.    (See  Waiver.)^ 
waiver  of,  is,  question  of  fact,  835  n.  4. 
**on  or  after"  construction  of,  850. 
"on  or  before,"  construction  of,  853  n,  1. 
option  to  sell,  time  to  elect,  853. 
option  to  repurchase,  time  to  elect,  853. 
optionor,  rights  of  under  oral,  417,  1101. 

rights  of  under  written  subscribed  election,  417  n.  3. 

fraud  of,  effect,  863-870. 

inequitable  conduct  of,  863-870. 
oral,  when  sufficient,  414-418. 
oral  option,  written  election  under,  sufficiency  of,  415  n.  2. 


INDEX  817 

(Eeference  is  to  sections) 

Election — Continued. 

oral,  personal,  when  sufficient,  818,  816. 
oral,  rights  of  optionor  under,  417. 

remedies  of  optionee  under,  1102. 

remedies  of  optionor  under,  1101. 

rights  of  optionee  under,  1102. 
part  of  property,  notice  of  election  to  take,   effect,  822, 

837  n.  1. 
part  performance,  election  necessary  to  invoke  rule  of,  418. 
payment,  election  distinguished  from,  914. 

when  act  of  election,  916,  917. 

when  necessary  as  part  of  election,  916,  917. 
penalties,  rule  of  does  not  apply  to,  862. 
performance,  election  distinguished  from,  839,  843-847. 
personal,  oral,  when  sufficient,  818,  816. 

when  sufficient  under  option  by  carrier,  820. 
place  of,  820. 

at  place  specified,  necessary,  820, 

notice  at  appointed  place,  effect  of,  820. 
presence  of  optionor  not  necessary,  820. 

personally,  anywhere,  when,  820. 

rule  when  no  place  specified,  820. 

when  optionor  evades,  820. 
pleading  of,  1244. 
post,  notice  of  election  by,  818,  819.    (See  supra,  sub-title 

"Notice  of.") 
property  optioned,  notice  of  election  as  to  part  of,  822, 
837  n.  1. 

equitable  title  vests  on  election,  514. 

election  as  to  part  of,  822,  837  n,  1. 
qualified,  837,  838,  840. 

"quick"  reply,  offer  requiring,  to  accept,  849  n.  3. 
reasonable  time  for,  when,  856-858. 
remedies  of  optionee  under,  1102.     (See  Remedies.) 
remedies  of  optionor  under,  1101.     (See  Remedies.) 
remedies  of  optionor  under  oral,  1101. 
repurchase,  option  to,  failure  to  elect  under,  option  is  lost, 

829. 
retraction  of,  not  allowed,  818  n.  5,  871. 

62 — Option  Contracts. 


818  LAW    OF   OPTION    CONTRACTS 

(Reference  is  to  sections) 

E  LECTION — C  0  ntin  ued. 

"return  mail,"  offer  requiring  answer  by,  time  to  accept, 

849  n.  3. 
right  of,  granted  by  option,  102. 
seal  does  not  dispense  with,  332  n.  6. 
simultaneously  with  acceptance,  effect,  704  n.  9. 
statute  of  frauds.     (See  Statute  of  Frauds.) 
oral  election  when  sufficient,  414-418. 
oral  option,  written  election  sufficient,  when,  415  n.  2. 
part  performance,  election  necessary  to  invoke  rule  of, 

418. 
written    subscribed    notice    of    election    when    required, 
816  n.  1. 
subscribed  notice  of,  effect,  417  n.  3. 
Sunday,  counting  of,  in  calculation  of  time,  850. 
telegraph  company,  liability  of,  for  error  in  transmitting 

notice  of,  1114. 
telegram,    election    by,    818,    819.     (See    supra,    sub-title 

"notice  of.") 
terms  of  option,  election  must  conform  to,  801,  815,  837,  838, 
840. 
when  implied  by  law,  801,  815. 
time  of.     (See  Extensions.) 

when  fixed  by  terms  of  option,  848. 
must  be  within  fixed  time,  848,  849. 
rule  applies  to  hour  fixed,  849  n.  2. 
election  after  fixed  time  does  not  raise  contract,  849. 
option  expires  with  time  limit,  849. 

is  ipso  facto  withdrawn,  849. 
rule  under  "first  refusals,"  855,  858. 
rule  under  option  to  sell,  853,  855. 
rule  under  option  to  repurchase,  853,  855. 
rule  under  option  to  return,  853, 
rule  under  option  in  leases,  852. 
rule  under  "appraisal"  clause,  851  n.  2,  1212  n.   9. 
rule  under  "expiration"  clauses,  in  leases,  851,  852. 
rule  under  valuation  clauses,  1212  n.  9. 
rule  when  previous  notice  for  fixed  time  required,  851, 
852. 


INDEX  819 

(Beference  is  to  sections) 

Election — Continued. 

rule  where  time  fixed  by  contingency,  848  n.  2. 

rule  where  time  fixed  by  trustee,  848  n.  1. 

rule  where  time  fixed  by  appraisal,  851  n.  2. 

rule  when  inventory  was  to  be  made,  848  n.  1. 

rule  when  offer  by  letter  requires  answer  by  return 

mail,  849  n.  3. 
rule  where  offer  by  telegram  requires  quick  reply,  849 

n.  3,  856  n.  2. 
when  not  expressly  fixed  by  option,  848. 
reasonable  time  fixed  by  law  (implied),  848. 
when  allowed,  856,  848. 
must  be  within  such  time,  856. 
under  offer  by  telegram,  856  n.  2. 
under  extensions,  859  n.  4. 
under  option  to  repurchase,  853. 
under  option  to  furnish  coal,  857. 
what  is,  on  particular  facts,  857. 
when  question  of  fact,  856. 
when  question  of  law,  856. 
parol  evidence  as  to,  856,  123  n.  5. 
pleading  of,  856  n.  6. 
option  is  not  void  for  lack  of  express  time  limit,  848,  222. 

reasonable  time  implied,  848. 
option  without  express  time  limit  is  not  a  perpetuity, 

848,  222. 
reasonable  time  implied,  848. 
calculation  and  construction,  850-862. 
expires  midnight  of  last  day,  850. 
first  day  excluded,  last  included,  850. 
fraction  of  day  not  counted,  850. 
holidays,  rule  as  to,  850. 
under  alternative  stipulation,  854. 
under  clause  reserving  to  optionor  right  to  sell,  855. 
under  "expiration"  clauses,  851. 
under  extensions,  859. 
under  ''first  refusals,"  etc.,  855,  858. 
under  offer  to  furnish  coal,  857  n.  4. 
under  offer  to  sell  shares  of  stock,  857  n.  5. 


820  LAW   OF    OPTION    CONTRACTS 

(Reference  is  to  sections) 

Election — Continued. 

under  option  subject  to  right  of  sale  by  lessor,  855, 
under  option  to  purchase  in  lease,  852. 
under  option  to  renew  in  lease,  852. 
under  option  to  repurchase,  853,  855. 
under  option  to  return,  828-830,  858. 
under  option  to  return  bonds  ' '  at  any  time, ' '  858  n.  1. 
under  option  to  return  goods  if  not  *  *  satisfied, ' '  858  n.  3. 
under  particular  clauses,  850,  857,  858. 
when  property  optioned  is  of  fluctuating  value,  857. 
when  deed  deposited  in  escrow,  857  n.  7. 
time  as  essence  of, 
rule,  862. 
rule  applies  to  option  to  repurchase,  862  n.  4. 

as  applied  to  mining  options,  920  n.  6,  862  n.  2. 

qualification  of  as  applied  to  options  in  leases,  862 
n.  3,  864  n.  2. 
election  is  condition  precedent,  801,  814,  839,  862. 
election  is  not  within  rule  as  to  penalties  and  forfei- 
tures, 862. 
essence  clause  in  lease  held  to  apply  to  option  therein, 

862  n.  4. 
extension,  agreement  for,  changes  rule,  when,  860  n.  2. 
distinguished  from  condition  subsequent,  862  n.  4,  872 
n.  9. 

performance,  868  n.  3. 

payment,  868  n.  3,  843,  844,  914. 
failure  timely  to  elect,  ends  option  rights,  862,  871. 
equitable  relief  to  optionee,  when,  863,  866,  867. 

absence  of  optionee,  867. 

absence  of  optionor,  866. 

accident,  864,  863  n.  1. 

act  of  God,  864,  863  n.  1. 

delay  of  notice  in  mail,  867. 

evasion  of  tender  by  optionor,  869. 

failure  of  optionor  to  keep  appointment,  869  n.  5. 

fraud  of  optionor,  869. 

mistake,  865,  863  n.  1. 

prevention  by  optionor,  866. 


INDEX  821 

(Reference  is  to  sections) 

Election — Continued. 

to  whom  notice  given,  809-812. 

administrator  of  deceased  optionor,  812. 

agent  of  optionor,  809. 

co-contractors,  811. 

devisees  under  will  of  optionor,  812  n.  5. 

employee  of  optionor,  809. 

executor,  812. 

grantee  of  optionor,  810. 

guardian  of  optionor,  812  n.  6. 

heirs  of  optionor,  812  n.  5. 

joint  or  several  optionors,  811. 

minor  heirs  of  optionor,  812  n.  6. 

optionor,  809. 

representative  of  deceased  optionor,  812. 

secretary  of  corporation — optionor,  809  n.  2. 
title  of  optionor,  without  election  optionee  can  not  question, 

1005  n.  10. 
trustee,  time  of  election  fixed  by,  848  n.  1. 
"until"  construction  of,  850  n.  8. 
waiver  of,  rule  stated,  868,  870.    (See  Waiver,  Estoppel.) 

abstract,  failure  of  optionor  to  tender,  is  not,  when,  870. 

act  of  third  party  does  not  work,  868  n.  1. 

alternative   election,   by   failure   of   optionor  to   object, 
869  n.  1. 

by  breach  of  optionor,  702,  870. 

conditional  election,  by  failure  of  optionor  to  object,  869 
n.  7,912  n.  11. 

estoppel  does  not  apply,  unless  there  is  election,  412  n.  4. 

"first  refusal"  rule  does  apply  to,  868  n.  2. 

conduct  of  optionor  postpones,  it  does  not  waive,  868 
n.  2. 

forfeiture,  notice  of,  by  optionor,  is  not,  when,  870. 

ofi'er,  rule  of  does  not  apply  to  acceptance  of  offer,  868  n.  2. 

optionor,  willingness  of,  to  perform  is  not,  when,  870. 
breach  by,  not  waiver,  when,  702. 

payment,  when  act  of  election,  rule,  924,  868  n.  3. 

refusal  by  optionor  to  convey,  when  not  waiver,  870,  702. 


822  LAW   OF    OPTION    CONTRACTS 

(Reference  is  to  sections) 

Election — Continued. 

written  notice,  816  n.  1,  869  n.  3. 
is  question  of  fact,  835  n.  4. 
withdrawal,  when  election  and  withdrawal  are  sinmltaneous, 

704  n.  9. 
"within,"  construction  of,  as  to  time  of  election,  850  n.  10. 
words,  election  may  be  by,  817  n.  1. 
writing,  election  may  be  by,  817  n.  1, 
written,  of  oral  offer  or  option,  when  sufficient,  415  n.  2. 

but  not  subscribed,  effect  of,  417  n,  1. 
written,  subscribed,  when  required,  816.     (See  Statute  of 

Frauds.) 
written,  waiver  of,  816  n.  1.     (See  Waiver.) 

Electric  Plants  and  Works.    See  Municipality. 

Encumbrances.   See  Abstract,  Deed  op  Conveyance,  Judg- 
ment, Lien,  INIortgage,  Title. 
abatement  in  price,  for,  1006. 

case  when  optionor  was  permitted  to  mortgage,  1006  n.  3. 
lease  is  not,  under  option  on  same  property,  1006. 
on  optioned  property  defeats  optionor 's  right  of  forfeiture, 

when,  1006. 
rights  of  optionee  when  optioned  property  mortgaged,  1006. 
rights  of  optionee  when  optioned  property  is  subject  to  street 

assessments,  1006. 
time  for  removal  of,  1006. 

Equitable  Conversion,   See  Insurance,  Rents. 

rule  of,  stated,  517. 

English  rule,  517. 

conflict  in  American  decisions,  517. 

rule,  construction  of,  517  n.  5. 
applies  to  option  contracts,  517. 

homestead  of  wife  filed  before  option,  517  n.  7. 

insurance  money,  512,  517  n.  5. 

option  passes  as  personal  property,  when,  517  n.  7. 

right  to  rent  and  purchase  money  as  between  heirs  and  per- 
sonal representatives,  517  n.  5. 

rule  of  relation  applied  to  purchaser  with  notice,  517  n.  6, 
515  n.  10. 


INDEX  823 

(Reference  is  to  sections) 

Equity. 

power  of,  with  reference  to  mistake,  fraud,  etc.  See  Accident, 
Act  of  God,  Election,  Estoppel,  Fraud,  Misrepresenta- 
tion, Mistake,  Time  as  Essence,  Waiver. 

can  not  extend  time  for  election,  when,  863  n.  1,  861. 

independent,  as  basis  for  estoppel,  412  n.  2. 

joint  optionees,  protection  of  one  against  the  other,  202  n.  2. 

relief  from  default,  under  interest  clause  in  note  and  mort- 
gage, 121  n.  3. 

relief  from  untimely  tender  or  payment,  913,  923. 

relief  from  untimely  election,  863. 

Escrow. 

deposit  of  option  with  third  person,  when  not,  208  n.  4. 
right  of  escrow  holder  to  interplead  option  parties,  1121. 

Estate.    See  Property  Under  Option. 

Estoppel.    See  Waiver. 
assignment  worked  by,  608. 
breach  of  agreement,  effect  of,  412  n.  2. 
distinguished  from  waiver,  413. 
election  by  optionee  necessary  to  invoke  rule  of,  when,  412 

n.  4. 
independent  equity  and  not  breach  is  basis  for,  as  applied  to 

oral  extensions,  412  n.  2. 
as  applied  to, 

acceptance  of  rent,  869. 

election,  869,  870,  863. 

election  by  assignee,  sufficiency  of,  804  n.  2. 

election,  conspiracy  to  prevent,  868  n.  2. 

extensions  under  Statute  of  Frauds,  412,  408. 

evasion  of  tender,  869. 

fraud,  869. 

improvements  made,  717. 

oral  extension  of  option  time,  869. 

payment,  923-936. 

power  of  city  to  take  option,  202  n.  2. 

putting  optionee  off  guard  as  to  time  of  election,  869. 

recognition  of  optionee's  rights,  869. 


824  LAW   OF    OPTION    CONTRACTS 

(Reference  is  to  sections) 

Estoppel — Continu  e  d. 
surrender,  710  n.  2. 
tenant,  one  against  the  other,  206. 
time  of  election,  862,  866-869. 

Evidence. 
burden  of  proof, 

as  to  want  of  consideration,  331. 

on  optionee  to  show  oifer  of  third  person  not  hona  fide, 
1253. 

on  optionee  to  show  timely  election,  1253. 

on  optionee  to  show  performance,  1253. 

on  optionee  to  show  part  performance,  1253  n.  7  and  8. 

on  plaintiff  to  show  consideration  adequate,  1253. 

on  plaintiff  to  show  he  is  able,  etc.,  1253. 

on  signers  to  show  signature  of  third  persons  necessary, 
1253. 
parol  evidence. 

rule  as  to  stated,  123. 

rule  applies  to  legal  effect  of  contract,  123  n.  1. 

rule  does  not  apply  to  third  parties,  123  n,  1. 

rule  as  to  modification  of  terms  of  extension,  410,  411. 

failure  to  object  to  introduction  of,  effect,  419  n.  9. 
parol  admissible. 

to  identify  parties  and  subject  matter,  123,  214. 

to  introduce  a  custom  or  usage,  when,  123. 

to  prove  consideration,  331  n.  1,  333. 

to  prove  fraud,  or  mistake,  when,  123,  1245  n.  4. 

to  prove  meaning  of  words  and  phrases,  when,  123. 

to  prove  oral  contemporaneous  agreement,  when,  123. 

to  prove  understanding  as  to  reasonable  time,  856. 

to  show  both  or  neither  of  two  options  enforceable,  123  n.  5. 

to  show  condition  affecting  validity  of  contract,  123. 

to  show  dividends  on  stock  were  not  to  pass,  123  n.  5. 

to  show  invalidity  of  contract,  123. 

to  show  real  consideration,  when,  331,  333. 
want  of  consideration,  when,  331,  333. 

to  show  surrounding  circumstances,  when,  123. 


INDEX  825 

(Reference  is  to  aeetiona) 

Evidence — Continued. 

to  show,  what  is  reasonable  time,  123  n.  5. 

but  not  when  time  is  fixed,  123  n.  5. 
to  show  whether  sum  named  is  penalty  or  liquidated  dam- 
ages, 123  n.  9. 
to  show  whether  payment  of  price  is  act  of  election,  123 
n.  5. 
parol  not  admissible, 

to  contradict  recital  of  consideration,  when,  331  n.  1,  332. 
to  connect  one  writing  with  another,  as  one  contract,  when, 

122  n.  4. 

to  show  agreement  to  take  back  articles  and  repay  price, 

123  n.  5. 

to  show  consideration  applied  to  lease  and  not  to  option 

therein,  331  n.  1. 
to  show  construction  of  contract  by  parties,  when,  122  n.  9. 
to  show  mortgage  of  option,  123  n.  5. 
to  show  omission  of  clause  applying  rentals,  123  n.  5. 
to  show  option  in  lease  intended  as  contract  of  sale,  123 

n.  5. 
to  show  option  was  unconditional,  123  n.  5. 
to  show  option  was  given  to  authorize  optionee  to  sell,  123 

n.5. 
to  show  prior  oral  agreement,  123  n.  1. 
to  show  that  part  of  joint  optionees  were  sureties,  806  n.  1. 
to  supply  essential  terms  of  written  contract,  406. 
parol,  admissibility  of, 

as  to  value  of  property  and  its  increase,  1122. 
as  to  price  obtainable  from  third  persons,  1122. 
as  to  value  of  lease,  1122. 
as  to  amount  of  prior  option,  1122. 
as  to  reasons  for  extension  of  option,  1122. 
as  to  expert  opinion  of  value  of  option,  1122. 
preponderance  of,  when  not  sufficient,  1253. 
rule  as  to  part  performance,  1253  n.  7,  8,  10. 
rule  as  to  oral  contract,  1253  n.  9. 
rule  as  to  oral  extension,  412  n.  4. 


826  LAW   OF   OPTION    CONTRACTS 

(Eeferenee  is  to  sections) 

Evidence — Continued. 
presumptions, 

as  to  receipt  by  optionor  of  posted  notice  of  election,  819 

n.  5. 
as  to  delivery  to  optionor  of  filed  telegram  of  acceptance, 

819  n.  5. 
recital  of  consideration,  331. 
written  contract  imports  consideration,  331. 
prima  facie, 

recital  of  consideration,  331. 

price  on  re-sale,  of  market  value,  1122. 

Exclusive, 

option  right  necessarily  is,  102  n.  1,  101  n.  1. 

Execution.   See  Judgment,  Lien. 

creditor,  right  of,  to  sue  for  specific  performance,  1238. 
election  by  purchaser  under  sale,  804  n.  3. 
levy  of,  as  maturing  chattel  mortgage  debt,  119. 
sale  under,  of  option  rights  of  lessee,  509. 

Executor.    See  Administrator. 
authority  of,  to  elect,  808. 
entitled  to  sue  for  specific  performance,  1238. 
is  legal  representative,  of  deceased  lessor,  812  n.  5. 
joint  executors,  execution  of  deed  by,  203. 
"legal  representative"  distinguished  from  "personal  repre- 
sentative," 812  n.  5. 
notice  of  election  by,  808. 
notice  of  election  to,  812. 
option  rights  of  deceased,  passing  to,  606. 
party  to  suit  for  specific  performance,  1239-1242. 
payment  or  tender  of  price  by,  902. 
payment  or  tender  of  price  to,  903. 

power  of  sale  to,  when  alienation  not  suspended  by,  222  n.  2. 
power  of  sale  to,  does  not  include  power  to  give  option,  203. 
power  of,  under  option  to  repurchase,  808. 
power  of,  to  renew  lease,  203. 
power  of,  with  reference  to  options,  203. 


INDEX  827 

(Eeference  is  to  sections) 

Extensions.   See  Consideration,  Statute  op  Frauds. 
agreements  concerning,  859-861. 

conveyance  of  the  optioned  property  to  third  persons  is 
not,  860  n.  1. 

correspondence,  held  not  to  be,  860  n.  5,  859  n.  1. 

endorsement  on  lease  containing  option,  is,  861  n.  4. 

equitable  relief  to  optionee  for  default  in  payment  or  ten- 
der under,  939. 

extending  time  for  payment  of  installments  is  not,  when, 
860  n.  2. 

extending  time  for  settlement  of  amount,  is,  334. 

failure  to  saw  required  quantity  of  timber,  861  n.  6. 

for  "removal"  of  property,  is  not,  860  n.  3. 

letter  held  not,  861  n.  7. 

to  make  survey,  1008  n.  6. 

when  option  is  left  out  of  renewal  lease,  861  n.  5. 
consideration  for, 

necessary,  334. 

rule  applies  whether  written  or  oral,  334. 

at  "mutual  agreement  of  parties"  is  void,  209  n.  1, 

for  option,  does  not  support  extension,  334  n.  3. 

mutual  promises  are,  334  n.  5. 

advance  installments  of  price,  334  n.  5. 
assessment  work,  334  n.  5. 

without,  is  continuing  offer  only,  334. 

written,  implies,  334. 
distinguished  from  renewal,  831. 
does  not  give  right  to  another  extension,  859  n.  1. 
evidence  of  must  be  clear,  412  n.  4. 
of  leases,  holding  over  as  election  to  extend,  831-836. 
of  leases,  particular  act  as,  831-836. 
of  time,  is  substitution  of  new  term,  when,  713  n.  1'. 
parol,  as  within  Statute  of  Frauds,  409,  408,  410-413. 

American  rules  conflicting,  409. 

English  rule,  409. 

cases  holding  parol  within,  410. 

cases  holding  parol  not  within,  410. 


828  LAW   OF    OPTION    CONTRACTS 

(Eeference  is  to  sections) 

Extensions — Continu  ed. 

rule  of  estoppel  applicable  to,  412. 

but  mere  breach  of  the  oral  agreement  is  not  ground 

for,  412  n.  2. 
circumstances  must  raise  independent  equity,  412  n.  2. 
distinguished  from  waiver,  413. 
-   of  lease,  rule,  411  n.  4. 
power  of  city  to  defer  its  option  to  purchase,  859  n.  5. 
waiver,  rule  of,  when  applicable,  413. 
power  of  city  to  consent  to,  202  n.  2. 
power  of  court  to  extend  time  to  elect,  861,  863  n.  1. 
time  to  elect  under,  859, 
withdrawal,  right  of,  under,  703. 

First  Chance. 
what  is,  212  n.  2. 
distinguished  from  option,  212. 

First  Opportunity. 
defined,  212. 

First  Option, 

meaning  of,  211  n.  6. 

First  Privilege. 
what  is,  211  n.  6. 

First  Refusal.   See  Option. 
described,  211  n.  6,  212. 
damage,  against  optionor  for  raising  price  offered  by  third 

person,  1110. 
of  lease,  same  terms  implied,  210  n.  4. 
price,  when  none  named,  210  n.  4. 
uncertainty  of,  rule,  212. 
offer  of  third  person  must  be  honu  fide,  211. 
fraud  of  optionor  in  raising  price  offered  by  third  per- 
son, 1110. 
refusal  of  optionee  to  purchase,  as  discharge  of,  708  n.  6. 
sale  of  property  by  optionor  not  breach,  when,  1102  n.  1, 
suit  to  discover  name  of  third  person  making  offer,  1121  n.  3. 
tender  under,  amount  of,  908. 


INDEX  829 

(Reference  is  to  sections) 

First  RepusaIj — Continued. 

time  to  elect  under,  855,  858  n.  6. 

waiver  of  conditional  election,  under,  847  n.  7. 

waiver  of  time  of  election,  under,  868  n.  2. 

Forcible  Entry  and  Unlawful  Detainer.   See  Detainer, 

Forfeiture. 

as  applied  to  payment  of  installments  and  delivery  of  deed, 

1003  n.  5. 
clause  accelerating  maturity  of  mortgage  debt  on  default, 

is  not,  120. 
construction  of  forefeiture  clauses,  109. 
distinction    between    divesting    estate    and    giving    estate, 

913  n.  2. 
effect  of  clause  making  agreement  an  option,  109. 
non-payment    does   not,    ipso   facto,   work,    optional   with 

optionor,  923  n.  2. 
rule  of,  not  applicable  to  election,  862. 
rule  of,  not  applicable  to  condition  precedent,  913  n.  2. 
rule  of,  does  not  apply  to  time  for  payment  of  money, 

when,  913. 

Forms  and  Precedents.   See  Appendix,  Chapter  XIII. 
assignment  of  option,  1302-3. 
capital  stock  and  bonds  of  corporation,  options  on,  1304- 

1315. 
chattel  mortgages,  option  clauses  in,  1316-1322. 
leases,  option  clauses  in,  1323-1334. 
mining  options,  1335-1340. 

mortgages  on  real  estate,  option  clauses  in,  1341-1343. 
notice  of  election  to  purchase,  general  form,  1344. 
options  on  real  estate, 

general  form,  1345, 

miscellaneous  forms,  1346-1362. 
will,  option  in,  giving  legatee  right  to  purchase,  1363. 

Fraud.    See  Misrepresentation. 

action  for,  does  not  pass  to  assignee  of  optionee,  601  n.  1. 
as  affecting  price  fixed  by  arbitration,  1212  n.  9. 
as  basis  for  equitable  rule  of  part  performance,  418. 


830  LAW   OF   OPTION    CONTRACTS 

(Eeference  is  to  sections) 

Fraud — Continued. 

as  ground  for  denying  specific  performance,  1203  n.  3,  1204. 

as  affecting  recital  of  consideration,  331. 

by  optionee,  as  bar  to  action  for  damages,  1110. 

effect  of,  on  option,  217. 

effect  of,  on  right  to  maintain  action  for  damages,  1110. 

implied  from  inadequacy  of  consideration,  when,  324. 

liability  of  promoters  of  corporation,  for,  217  n.  6. 

liability  of  agent  for,  to  principal,  205. 

measure  of  damages  for,  609  n.  3. 

mere  mental  weakness  not  sufficient  as,  when,  217  n.  3. 

of  optionor  under  first  refusal,  effect,  211  n.  7. 

option  secured  through,  not  basis  for  damages,  217,  1110. 

raising  price  offered  by  third  person,  under  "first  refusal," 

as,  1110. 
reformation  on  grounds  of,  217,  1245.    (See  Reformation.) 
refusal  of  wife  to  release  dower,  is  not,  207. 
taking  option  as  speculation,  is  not,  217  n.  5. 

Frauds,  Statute  of.   See  Statute  of  Frauds. 

Futures. 

validity  of,  216. 
English  rule,  216. 
American  rule,  216. 

Gas  Lease.   See  Lease. 

not  always  a  strict  lease,  328  n.  1. 

Gas  Plants.   See  Municepalitt. 

Guaranty. 

of  repayment  of  price,  assignment  of,  601  n.  1. 
time  to  sue  on,  1251  n,  4. 

Guardian. 

grant  of  option  by,  without  court  authority,  is  void,  203. 

notice  of  election  to,  812  n.  6. 

power  of,  with  reference  to  option,  203. 

tender  of  note  and  mortgage  of,  for  minor,  good,  907. 


ESTDEX  831 

(Reference  is  to  sections) 

Heies. 

as  parties  to  suit  for  specific  performance,  1238-1242. 

effect  of  "heirs  and  assigns"  clause  on  right  to  elect,  808. 

effect  of  ' '  heirs  and  assigns ' '  clause  on  right  of  assignment, 
605,  604. 

effect  of  "heirs  and  assigns"  clause  as  creating  a  perpet- 
uity, 223. 

notice  of  election  to  one,  sufficiency  of,  812  n.  5. 

notice  of  election  to  minor  heir  and  guardian,  812  n.  6. 

refusal  of  one  to  convey  is  refusal  of  all,  811  n.  4. 

Holidays.  See  Sunday,  Election,  sub-title  "time  of," 

Homestead. 

declaration  as  affected  by  rule  of  relation,  517  n.  7. 

declared  after  execution  of  option,  effect,  207  n.  2. 

option  by  husband  alone  does  not  affect  interest  of  wife  in, 

207,  1243. 
unless  she  joins  in  option,  207,  1243. 
validity  of,  215,  1243. 
wife  as  party  to  suit  for  specific  performance,  1243. 

Husband.    See  Dower,  Homestead. 

power  to  grant  option  covering  dower  right  of  wife,  207. 
power  to  grant  option  covering  homestead,  207. 

Improvements.  See  Part  Performance,  Statute  of  Frauds. 
decree  allowing  removal  of,  1254  n.  3. 
made,  as  affecting  right  of  optionor  to  withdraw  option, 

703  n.  8. 
made,  as  affecting  rule  as  to  laches,  1250  n.  3. 
making  of,  as  election,  827. 
making  of,  as  part  Derformanc^  within  Statute  of  Frauds, 

1207. 
working  waiver  of  tender  of  price,  936. 

Infants.   See  Minors. 

Injunction. 

against  baseball  player,  117,  1126. 
suit  for,  as  election,  823. 


832  LAW    OF    OPTION    CONTRACTS 

(Reference  is  to  sections) 

Injunction — Continued. 

to  enforce  negative  covenant  of  employment  contract  for 

personal  services,  1126. 
to  restrain  suit  to  eject  tenant,  1123  n.  8. 
to  preserve  status  of  property  during  pendency  of  suit,  1126, 
right  to,  by  optionee,  to  restrain  unlawful  detainer,  1126. 
when  the  stipulations  of  contract  are  not  mutual,  1126. 
when  the  election  is  conditional,  1126. 

Insanity. 

effect  of,  on  offer,  606,  709. 
effect  of,  on  option,  606,  709. 

Insurance.  See  Equitable  Conversion. 

allowance  of  moneys  from,  on  tender,  909. 

election  made  conditional  on  application  of  insurance 
moneys,  841. 

insurable  interests  of  optionor  and  optionee,  511,  512. 

optionee  under  lease  with  option  to  purchase,  has  not  fee 
simple  title,  511. 

option  does  not  change  title  within  meaning  of  policy,  511. 

optionor  has  "sole  and  unconditional  ownership"  of  prop- 
erty under  option  thereon  given  by  him,  511. 

right  to  moneys,  as  between  optionor  and  optionee,  512. 

rule  of  relation,  512  n.  2,  3. 

to  whom  payable,  under  rule  of  equitable  conversion, 
517  n.  5. 

Interpleader. 

right  of  escrow  holder  to  interplead  optionor  and  optionee, 
1121. 

Interest. 

as  an  element  of  vendee's  damages,  1118. 

clause  does  not  destroy  negotiability  of  mortgage  note,  120. 

unless  the  option  is  exercised,  120. 
default  in  payment,  as  maturing  mortgage  note,  119. 
good  tender  stops  the  drawing  of,  906. 
is  not  chargeable  from  date  of  refused  tender,  909  n.  3. 
on  price,  when  optionor  entitled  to,  518  n.  2. 
stipulation  to  pay,  is  not  consideration,  when,  322  n.  1. 


INDEX  833 

(Reference  is  to  sections) 

Interest — Continued. 

tender  of,  when  necessary,  909. 
when  lessee  not  required  to  pay,  519. 

Interpretation.   See  Construction. 

Joint  Optionees.    See  Optionee,  Parties,  Election. 

can  not  treat  contract  as  joint  or  several,  when,  805  n.  3. 

election  by  one,  or  all,  805,  806. 

fiduciary  relation  of,  202  n.  2. 

notice  of  election  by,  where  one  optionee  erases  his  name, 

effect,  805  n.  5. 
parol   evidence   to   show   part   of  optionees  sureties   only, 

806  n.  1. 
possession  taken  by  one,  is  for  all,  806  n.  1. 
rights  of,  under  option  in  will,  805  n.  4. 
right  of,  to  sue,  1238. 

tender  of  one,  good  for  all,  805  n.  5  and  7. 
tender  of  note  of  one,  not  sufficient,  when,  805  n.  5. 

Joint  Optionors.   See  Joint  Tenants,  Tenants  in  Common. 
notice  of  election  to,  sufficiency  of,  811. 
payment  or  tender  to,  903. 

relation  of,  distinguished  from  that  of  tenancy,  811,  805,  806. 
relation  of,  distinguished  from  partnership,  811,  806a,  807. 
waiver  of  tender  or  payment  to,  by  one,  935. 

Joint  Tenants.   See  Joint  Optionees,  Joint  Optionors. 
all  may  join  in  granting  option  on  common  property,  206. 
are  not  partners,  206,  811. 

authority  of  one,  to  give  or  take  option  binding  all,  206. 
authority  of  one,  to  receive  or  give  notice  of  election,  805. 
do  not  sustain  relation  of  principal  and  agent,  206,  811. 
duty  of  non-consenting  tenant  to  repudiate,  206. 
estoppel  as  against  non-consenting  tenant,  206. 
nature  of  estate  of  each,  206. 
notice  of  election  to,  sufficiency  of,  811. 
notice  of  election  by,  sufficiency  of,  805. 
payment  or  tender  of  price  by,  902. 
payment  or  tender  of  price  to,  903. 

53 — Option  Contracts. 


834  LAW  OF   OPTION   CONTRACTS 

(Reference  is  to  sections) 

Judgment.    See  Decree. 

as  a  lien  on  option  property,  509. 

on  good  tender,   creditor  entitled  only  for  amount  ten- 
dered, 906. 

Laborers, 

right  of,  to  lien  on  option  property,  509  n.  6. 

Laches. 

as  defense  to  specific  performance,  1250,  1248. 

contract  partly  executed  and  possession  taken,  1250. 

delay  due  to  request  of  optionor,  1250  n.  8. 

laches  and  increase  in  value,  1250  n.  1. 

mere  lapse  of  time  is  not,  1250. 

must  be  pleaded  as  defense,  1250. 

option  to  re-purchase  stock  of  corporation,  1250  n.  1. 

statutory  limitation  as  fixing  the  period,  1250  n.  8. 

what  delay  is,  1250. 

where  improvements  made,  1250. 

where  deed  and  payment  are  concurrent  acts,  1250  n.  8. 

Lease.   See  Possession,  Renewal,  Rent. 

agreement  on  facts  held  irrevocable  license,  113  n.  3. 
apportionment  of  rent  on  exercise  of  option,  113  n,  10. 
assignment,  607.    (See  Assignment.) 

as  covenant  running  with  land,  607. 

right  of  sub-lessee  under  option  to  renew,  607. 

stipulation  against  assignment  of  lease  includes  option, 
604,  n.  2. 
coal  mined  under,  right  to,  520. 

consideration  for,  supports  option  therein,  321.    (See  Con- 
sideration.) 

nominal  sum  as  consideration  for  (oil  and  gas),  328-330. 
covenant  to  renew  in,  as  perpetuity,  223. 

for  perpetual  renewal,  220  n.  1. 
death  of  optionor-lessor,  effect  on  right  to  elect,  864, 
death  of  optionor,  effect  on  lease  and  option,  606. 
discharge  of  option  by  sale  by  optionor,  708. 
distinguished  from  option  to  purchase,  113,  220  n.  1. 
effect  of  election  to  purchase,  on,  871    (See  Election.) 


INDEX  835 

(Bef  erence  is  to  sections) 

Lease — Continued. 

encumbrance,  lease  is  not,  on  optioned  property,  1006. 
execution  sale,  interest  of  lessee  under,  as  subject  to,  509. 
extension  of,  334,  409-413.    (See  Extensions.) 
at  mutual  agreements  of  parties  void,  209  n.  1, 
holding  over  as,  831-836. 

taxes,  payment  of,  under,  113  n.  10.    (See  Taxes.)' 
mining,  does  not  create  relation  of  vendor  and  purchaser, 

113  n.  2. 
mortgage  by  lessee  of  his  interest  under  option  in,  510.   (See 

Mortgage.) 
mutuality  of  covenants  in,  417  n.  4.    (See  Mutuality.) 
as  applied  to  option  in,  1211,  1231. 
as  affected  by  option  to  lessor  to  terminate,  1236,  117. 
new  lease,  not  surrender  of  option  in  old  lease,  113  n.  10. 
notice  terminating,  as  affecting  option,  113  n.  10. 
oil  and  gas,  not  always  strict  lease,  328  n.  1. 
option  in,  to  purchase,  distinguished  from  sale  and  pur- 
chase, 112  n.  3. 
option  in,  separate  and  distinct  agreement,  113  n.  10. 
option  in,  to  optionor  to  sell,  sale  discharges  option,  708. 
oral,  when  within  Statute  of  Frauds,  404  n.  4.    (See  Statute 

of  Frauds.) 
possession,  513.    (See  Possession.) 

optionee  in,  is  trespasser  on  termination  of  lease,  113  n.  10. 
renewal  of.    (See  Renewal  of  Lease.) 

action  for  damages  for  failure  to  renew,  1102  n.  1. 
certainty  as  to  terms  of,  209  n.  1. 

of  "first  refusal"  to  renew,  210  n.  4. 
clause  for  held  not  mutual,  113  n.  10.    (See  Mutuality.) 
construction  of,  rule,  124.    (See  Construction.) 
continues  option  in  first,  113  n.  10. 
election  under.    (See  Election.) 
by  sub-lessee,  802  n.  1,  607. 
by  husband  of  lessee,  803. 
by  assignee  of  lessee,  804. 
by  partners,  806a,  807. 
by  heirs,  808. 
time  of,  852,  862  n.  3,  864  n.  2. 


836  LAW   OF    OPTION    CONTRACTS 

(Reference  is  to  sections) 

Lease — Co  ntinved. 

holding  over  as,  831-836. 
particular  act  as,  831-836. 
embraces  option  in  first,  113  n.  10. 
optionor  not  released  from,  by  conveyance  of  premises, 

609  n.  9,  708. 
perpetual,    covenant    for,    distinguished    from    option, 

220  n.  1. 
right  of  sub-lessee  to  renew,  607. 

Statute  of  Frauds,  when  within,  407  n.  3,  404  n.  4,  411 
n.  4.    (See  Statute  of  Frauds.) 
rent  under,  519.    (See  Rent.) 
sale  of  property  by  probate  court  subject  to  lease  and 

option,  203. 
specific  performance.    (See  Specific  Performance.) 
of  option  in,  1211. 
of  arbitration  clauses,  1212. 
of  valuation  clauses,  1213. 
Statute  of  Frauds.    (See  Statute  of  Frauds.) 
oral  lease,  when  within,  404  n.  4. 
extensions,  409-413. 
option  in  lease,  as  within,  404  n.  4. 
sub-lessee,  right  of  to  renew,  607. 

surrender  of,  by  optionee  paying  rent,  when,  710  n.  6. 
surrender  of,  by  partner,  807  n.  2. 
taxes,  payment  of  under  extension,  113  n.  10. 
validity  of,  by  executor,  administrator,  guardian,  203. 
waiver  of  option  in,  by  paying  rent  after  election,  113  n.  10. 
of  written  notice  of  election,  816  n.  1. 

Legality.   See  Validity. 

Legatee. 

as  party  to  suit  for  specific  performance,  1239-1242. 
right  of,  to  sue  for  specific  performance,  1238. 

License. 

of  mine,  agreement  held  to  be,  113  n.  3. 


INDEX  837 

(Eeference  is  to  sections) 

Lien.    See  Judgment. 

lien  law  not  retroactive,  when,  509  n.  6, 

of  laborers,  mechanics,  etc.,  for  work  on  property,  509. 

Liquidated  Damages.    See  Damages. 

clause  for,  as  affecting  rule  of  mutuality,  1236  n.  4. 

construction  of  clause,  109,  1111  n.  1. 

parol  evidence  admissible  to  show  whether  sum  intended  as 

liquidated  damages  or  as  penalty,  1111  n.  1. 
rule  as  to,  stated,  1111  n,  1. 
stipulation    for,    when    bar   to    specific    performance,    109 

n.  2  and  6. 
when  clause  for,  upheld,  1111. 

Loan. 

transaction  held  loan  with  option,  116  n.  3. 

Master  and  Servant.   See  Principal  and  Agent. 
facts  not  amounting  to  employment,  114. 
injunction  by  master  to  enforce  negative  covenant,  1126. 
mutuality  in  contract,  rule,  117. 
option  to  renew  term  of  employment,  117,  1126. 
option  to  terminate  contract  of  employment,  117,  1126. 

construction  of,  117  n.  3. 

right  of  arbitrary  discharge,  117  n.  3. 

when  right  to  discharge  is  reserved  in  contract,  117  n.  3. 

Mechanics. 

right  of,  to  liens  on  option  property,  509  n.  6. 

Mines  and  Mining. 

abandonment  by  failure  to  operate,  710  n.  12. 

acts  amounting  to  surrender  of  option,  on,  710  n.  7. 

agreement  held  irrevocable  license,  113  n.  3. 

agreement  held  an  option,  115. 

agreement  held  option  and  not  trust,  116. 

assignability  of  contract  to  drill  for  commercial  substances, 

604  n.  7. 
effect  of  termination  clause,  708  n.  6. 
interest  of  licensee  in  property  and  ores,  513  n.  5. 


838  LAW  OF   OPTION   CONTRACTS 

(Eeference  is  to  sections) 

Mines  and  Mining — Continued. 

lease  does  not  create  relation  of  vendor  and  purchaser, 
113  n.  2. 

lessor  estopped  to  claim  breach  by  lessee,  when,  717  n.  4. 

mutuality  arising  from  promise  to  improve,  etc.,  308, 
309,  314. 

net  cost  of  mining  ore,  how  determined,  520. 

promise  to  do  assessment  work  as  consideration  for  exten- 
sion, 334  n.  5. 

right  to  coal  mined  at  time  of  election  to  purchase,  520. 

rescission  where  mine  unproductive,  712  n.  9. 

rule  for  construction  of,  mutuality,  1211. 

time  as  essence  of  contracts  relating  to,  920  n.  6. 

working,  etc.,  as  consideration  for  option,  308,  309. 

Minors. 

notice  of  election  by,  902  n.  4. 
notice  of  election  to,  812  n.  6. 
tender  by  guardian  of,  907,  902  n.  4. 
tender  to,  1244  n.  21. 

Misrepresentation.   See  Fraud. 

action  for  does  not  pass  to  assignee  of  optionee,  601  n.  1. 
as  basis  for  equitable  rule  of  part  performance,  418. 
as  ground  for  denying  specific  performance,  1204, 
effect  of,  on  option,  217. 

on  right  to  maintain  action  for  damages,  1110. 
what  is,  217. 
trade  talk  as,  217  n.  7. 

Mistake. 

as  ground  for  equitable  relief,  (election),  863,  865. 
as  ground  for  equitable  relief,  (payment),  938. 
as  to  legal  effect  of  contract,  217  n.  2. 
as  a  defense  to  specific  performance,  1248  n.  5. 

mutuality  not  necessary,  1248  n.  5. 
effect  of  on  option,  217. 
of  scrivener,  217  n.  1,  1245. 

mere  inadvertence  is  not,  as  to  time  of  election,  865  n.  2. 
reformation  of  contract  for,  1245,  217. 

must  be  mutual,  1245. 


INDEX  839 

(Eeference  is  to  sections) 

Mortgage.    See  Encumbrances,  Chattel  Mortgage,  Real 
Estate  Mortgage. 
case  where  optionor  was  to  mortgage,  1006  n.  3. 
distinguished  from  option,  115. 

distinguished  from  agreement  to  repurchase,  115  n.  3. 
of  leasehold  does  not  cover  option  in  lease,  when,  510. 
of  optioned  property  by  optionee,  510. 
option  does  not  pass  to  mortgagee,  510  n.  2. 
right  of  mortgagee  to  elect,  802  n.  1,  804  n.  2. 
right  of  optionee  when  optioned  property  mortgaged,  1006. 

Motive. 

of  option  for  withdrawing  option,  is  immaterial,  703  n.  3. 

Municipality. 

election  by  ordinance,  sufficiency  of,  826. 

estoppel  against  optionor  to  deny  city  has  power  to  pur- 
chase water  works,  by,  202  n.  2. 

grant  of  franchise  as  consideration  for  option,  319. 

miscellaneous  cases  involving  options  on  water  plants  and 
other  public  works,  116  n.  3. 

ordinances,  votes,  etc.,  as  election,  826. 

power  of,  to  consent  to  extension,  202  n.  2. 

right  to  possession  by,  under  agreement  to  purchase,  513, 
113  n.  10. 

right  to  water  rates,  on  election  by  city  to  purchase  water 
plant,  520  n.  5. 

rule  of  construction  of  franchise  grant,  122  n.  10. 

Mutuality.    See  Consideration,  Specific  Performance. 
arbitration  and  valuation  clauses,  1212. 
arising  from  promise  to  perform  act,  303  n.  2,  304-307. 
bilateral  contract,  rule  applies  to  and  not  to  option,  1215, 

1218. 
covenants  in  indentures,  417  n.  4. 
covenants  in  deed  poll,  417  n.  4. 
covenants  in  leases,  417  n.  4. 
different  kinds  of,  1214-1218. 
distinction  between  mutuality  of  remedy  and  mutuality  of 

obligation,  1216,  1217,  1236. 


340  LAW    OF   OPTION    CONTRACTS 

(Reference  is  to  sections) 

Mutuality — Continued. 

distinction  between  mutuality  of  bilateral  contract  and  of 

option,  1215,  1218,  1237  n.  1. 
effect  of  want  of,  on  right  to  specific  performance,  117,  1214. 
in  option  in  lease,  113  n.  10,  1211,  1231,  417  n.  4. 
in  action  at  law  for  damages,  1214. 
election,  written,  gives,  when,  417  n.  3. 
election,  oral,  gives,  when,  416. 
in  arbitration  clause  in  lease,  1212  n.  9. 
in  contract  of  baseball  player,  117. 
in  contract  of  sale  and  purchase,  105. 
in  contract  raised  by  oral  election,  416. 
in  covenants  of  a  deed  poll,  417  n,  4. 
in  covenants  of  indentures,  417  n.  4. 
in  covenants  of  lease,  417  n.  4. 
in  mining  options  and  licenses,  308,  309. 
in  option  to  terminate  contract,  117,  301  n.  1,  1236. 
in  option  in  lease,  1211,  1231,  417  n.  4. 
in  renewal  clause  of  lease,  113  n.  10. 
injunction,  lack  of  mutuality  as  bar  to,  1126. 
leases,  option  in,  1211,  1231,  417  n.  4. 
mining  options  and  licenses,  308,  309. 
modem  and  established  rule  of,  stated,  1224-1237. 
of  assent,  defined,  1214. 
of  obligation,  defined,  1214,  1216,  1218. 

is  not  necessary  in  action  to  recover  damages,  1214. 
is  necessary  in  suit  for  specific  performance,  1214. 
means  consideration  to  support  contract,  1218. 

or  a  contract  under  seal,  1218. 
must  exist  at  execution  of  contract,  1218. 
none  in  an  offer,  1217. 

without  acceptance,  1224  n.  1,  303,  305,  306. 
none  in  an  option,  when,  1224  n.  1,  1236,  102. 
of  remedy,  defined,  1214,  1216,  1218. 
sufficient  if  it  exist  at  time  of  suit,  1218. 
or  decree,  1237  n.  2. 
of  promise  for  a  promise,  302,  304. 
offer,  none  in,  303,  306,  305,  1217. 
old  rule  of,  1219-1221. 


INDEX  841 

(Reference  is  to  sections) 

Mutuality— Cow^mwed. 

old  rule  modified,  1221,  1222,  1223,  1224-1237. 
optionor,  right  of  under  oral  election,  417,  1101. 
oral  election,  mutuality  in  contract  raised  by,  416. 

rights  of  optionor  under,  417,  1101. 
permit  to  settle  on  railroad  lands,  310,  314. 
promise  for  a  promise,  gives,  Avhen,  302-307. 
promise  distinguished  from  condition  precedent,  304. 
rule  of  stated,  1214,  1236. 
qualification  of  rule  as  affected  by, 
alternative  stipulation,  1236  n.  5. 
clause  for  liquidated  damage,  1236  n.  4. 
clause   relinquishing  action  for  damages   or  suit  for 

specific  performance,  1222. 
option  to  terminate  contract,  1222,  1236,  117,  303  n.  1. 
option  to  discharge  all  liability  under  contract,  1236. 
option  to  work  or  abandon  oil,  etc.,  lease,  1236. 
option  to  rescind  or  waive  condition,  1236  n.  4. 
option  to  sue  for  damages  or  for  specific  performance 
1230. 
so-called  exceptions  to  rule, 

full  performance  by  infants,  1237. 
full  performance  by  married  women,  1237. 
option  supported  by  consideration,  1237. 
option  in  leases,  1211,  1231. 
option  to  married  women,  1237. 
option  to  infants,  1237. 
option  within  Statute  of  Frauds,  1237. 
specific  performance, 

mutuality  of  remedy,  necessary,  to  maintain,  117,  1215 
1236. 

lack  of,  in  option  not  bar,  102,  1236. 

written  subscribed  election  furnishes,  417  n.  3. 

oral  election  furnishes,  when,  416. 

filing  bill  for,  when  supplies,  1237,  1218. 
test  of  mutuality  of  remedy,  117,  1215-1236. 
under  stipulation  for  rescission,  117  n.  11. 


842  LAW    OF    OPTION    CONTRACTS 

(Reference  is  to  sections) 

Nature  and  Characteristic  of  Option. 
assignable,  option  is,  602,  604,  102. 
becomes  a  bilateral  contract  on  election,  102,  105,  514. 
consideration,  option  must  have,  301,  324,  102. 

or  be  evidenced  by  sealed  \\'Titing,  102,  301,  333. 
creates  rights  in  possession,  502  n.  4. 
distinguished  from  agency,  114, 

agreement  of  sale,  108,  110. 

bailment  with  option  to  purchase,  111,  112,  507-8. 

bilateral  contract  under  rule  of  mutuality,  1222. 

deed,  115. 

first  chance  to  make  a  contract,  212. 

future,  216. 

lease,  113. 

mortgage,  115. 

offer,  102-4,  814. 

partnership,  116  n.  3. 

pledge,  116. 

sale,  105-107. 

sale  and  return,  111,  507-8. 

sale  on  approval,  111,  112. 

sale  on  trial,  111,  112. 

sale  with  right  to  rescind,  112  n.  3. 

trust,  116. 
effect  on,  of  clause  for  termination,  110,  117. 
effect  on,  of  death  of  either  party,  606,  709. 
effect  on,  of  insanity  of  either  party,  606,  709. 
exclusive  option  gives  exclusive  right  to  purchase,  102  n.  1. 
grants  right  of  election  only,  102,  105. 

no  estate  or  interest  in  the  property  passes  by,  102,  501. 

rule  as  to  bona  fide  purchaser,  102,  515. 
is  assignable,  when,  602,  604,  103. 
is  an  executed  contract,  102,  103. 
is  an  exclusive  right,  102  n.  1. 
is  sale  of  right  to  purchase,  102,  105. 
is  unilateral,  102. 
is  not  a  deed  or  specialty,  208. 
is  not  a  sale  of  the  property,  103,  105. 

but  is  a  property  right,  501  n.  1,  602  n.  2. 


INDEX  843 

(Reference  is  to  sections) 

Nature  and  Characteristic  of  Option — Continued. 
is  not  a  nude  pact,  103,  301,  1217. 
is  not  a  mere  offer,  102. 
lease,  option  in,  separate  from,  113  n.  10. 
mutuality  of  covenants  in,  102,  1214-1217. 

lack  of,   does  not  prevent  specific  performance,   when, 
1214-1217. 
obligates  optionor  to  sell,  102,  105. 
but  does  not  obligate  optionee  to  buy,  102,  105. 

Negotiable  Instruments. 

action  by  vendor  on  purchase  money  note,  1116  n.  3. 
effect  of  option,  to  accelerate  maturity  of  mortgage  note,  120. 

insurance  clause,  120. 

interest  clause,  120. 

tax  clause,  120. 
of  note  secured  by  trust  deed,  120  n.  2, 
rule  of  forfeiture  does  not  apply  to  time  of  payment  of,  913. 

Negotiations. 

broken  off,  do  not  raise  option,  201  n.  1. 

Newspaper  Route. 

option  to  terminate  contract  for,  117  n.  7. 

Notice.   See  Bona  Fide  Purchaser. 

of  withdrawal  of  option,  704.    (See  Withdrawal.) 
of  retraction  of  acceptance  or  election,  818  n.  5,  87L 

Nude  Pact.   See  Offer,  Option. 

an  unaccepted  offer  is,  103,  301,  1217. 
an  option  is  not,  103,  301,  1217. 
option  to  renew,  in  lease,  is  not,  1211. 
sealed  written  offer  is  not,  301. 

Offer.   See  Acceptance,  Election,  Option. 
acceptance  of,  what  is,  103,  801,  814. 
assignable  offer  is  not,  602,  103. 

before  acceptance,  602. 
bona  fide  purchaser,  rule  of,  does  not  apply  to,  515, 
cases  involving  construction  of,  104,  106-7. 
consideration,  offer  is  without,  103,  301. 


844  LAW   OF   OPTION   CONTRACTS 

(Eeference  is  to  sections) 

Offer — Continued. 

death  of  party,  effect  on,  606,  609. 

defined,  103. 

distinguished  from  option,  103,  104,  106-7,  814. 

distinguished  from  sale,  106. 

effect  of  consideration  for,  or  sealed,  301, 

effect  of  death  of  party  before  acceptance,  606,  609. 

effect  of  insanity  of  party  before  acceptance,  606,  709. 

insanity  of  party,  effect  on,  606,  609. 

is  first  step  in  negotiation  of  contract,  103. 

is  a  nude  pact,  when,  103,  301,  1217. 

is  without  consideration,  103. 

is  not  assignable,  602,  103. 

is  not  binding,  till  accepted,  103,  801,  814. 

is  not  a  contract,  103,  801,  814. 

is  not  an  option  contract,  102,  814. 

mutuality,  offer  lacks,  1217. 

nude  pact,  offer  is,  103,  301, 1217. 

option  without  consideration  and  unsealed  is,  102. 

seal,  effect  of,  on,  102,  301,  333. 

terms  of,  must  be  definite  and  certain,  209  n.  1. 

unaccepted,  is  a  nude  pact,  103,  301, 1217. 

unaccepted,  lacks  mutuality,  1217. 

unaccepted,  is  not  within  rule  of  J)ona  fide  purchaser,  515 

withdrawal,  right  of.    (See  Withdrawal.) 

Oil  Lease.    See  Lease. 

consideration  for,  sufficiency  of,  328,  329. 
mutuality  of  stipulations  in,  308,  309,  1236  n.  5. 
not  always  strict  lease,  328  n.  1. 
option  in  to  terminate,  1236  n.  5. 
specific  performance  of,  1236  n.  5. 

Option. 
abandonment  of,  710.    (See  Abandonment,  Discharge,  Sur- 
render.) 
action  to  enforce,  1101-1119.    (See  Remedies.) 
assignable,  when,  602-5.     (See  Assignments.) 
bona  fide  purchaser,  515.    (See  Bona  Fide  Purchaser.) 


INDEX  845 

(Beference  is  to  sections) 

Option — Continued. 
breach  of,  effect  and  rights  upon,  702,  714-5,  1101-1104. 
(See  Breach,  Remedies.) 

consideration  to  support,  301-334,  1205.     (See  Considera- 
tion. ) 

construction  of,  122,  123.     (See  Construction.) 
damages  for  breach  of,  1101-1119.     (See  Damages.) 
death  of  party,  effect  on,  606,  709.     (See  Death.) 
definition  of,  101,  103-120. 
discharge  of,  701-719.     ( See  Discharge. ) 
description  of  property  in,  214.    (See  Description.)' 
dower,  effect  of,  on,  207.     (See  Dower  Right  of  Wife.) 
distinguished  from  agency,  114. 
agreement  of  sale,  108,  110. 

bailment  with  option  to  purchase,  111,  112,  507-8. 
bilateral  contract  under  rule  of  mutuality  1222 
deed,  115. 

first  chance  to  make  a  contract,  212. 
future,  216. 
lease,  113. 
mortgage,  115. 
offer,  102-4,  814. 
partnership,  116  n.  3. 
pledge,  116. 
sale,  105-107. 

sale  and  return,  111,  507-8. 
sale  on  approval.  111,  112. 
sale  on  trial,  111,  112. 
sale  Mdth  right  to  rescind,  112  n.  3. 
trust,  116. 
election  under,  801-871.    (See  Election,  Acceptance.) 
equitable  conversion,  rule  of,  517.     (See  Equitable  Conver- 

sion.) 
essentials  of, 
consideration,  301.    (See  Consideration.) 

or  seal,  102,  301. 
definite  and  complete  terms,  209-214. 
delivery  of  contract,  208. 
description  of  subject  matter,  214. 


846  LAW    OF   OPTION    CONTRACTS 

(Eeference  is  to  sections) 

Option — Continued. 

parties,  202.     ( See  Parties. ) 

writing,  when  necessary,  401-4.    (See  Statute  of  Frauds.) 
extension  of,  334,  409-413.    (See  Extensions.) 
"first  refusal"  defined,  101,  211  n.  6,  212. 
formal  requisites  of,  208. 
fraud,  effect  of,  on,  217.    ( See  Fraud. ) 
futures  distinguished  from,  216.    (See  Futures.) 
homestead,  effect  on,  207.     (See  Homestead.) 
insanity  of  party  to,  effect  of,  606,  709.     (See  Insanity.) 
insurable  interest  under,  511-512. 
judgment,  effect  of,  on,  509.    (See  Judgment.) 
legality  of,  215.    ( See  Validity. ) 
mistake,  effect  of,  on,  217.     (See  Mistake.) 
mortgage  of,  510.     (See  Mortgages.) 
mutuality  in,  303-314,  416, 1214-1237.    (See  Mutuality.) 
nature  and  characteristics  of, 

assignable,  option  is,  602,  604,  102. 

becomes  a  bilateral  contract  on  election,  102,  105,  514. 

consideration,  option  must  have,  102,  301,  324. 
or  be  evidenced  by  sealed  writing,  102,  301,  333. 

creates  rights  in  possession,  502  n.  4. 

effect  on,  of  clause  for  termination,  110,  117. 

effect  on,  of  death  of  either  party,  606,  709. 

effect  on,  of  insanity  of  either  party,  606,  709. 

exclusive  option  gives  exclusive  right  to  purchase,  102  n.  1. 

grants  right  of  election  only,  102,  105. 
no  estate  or  interest  in  the  property  passes  by,  102,  501. 
rule  as  to  hona  fide  purchaser,  102,  515. 

is  assignable,  when,  602,  604,  103. 

is  an  executed  contract,  102,  103. 

is  an  exclusive  right,  102, 

is  sale  of  right  to  purchase,  102,  105. 

is  unilateral,  102. 

is  not  a  deed  or  specialty,  208. 

is  not  a  sale  of  the  property,  103,  105. 

but  is  a  property  right,  501  n.  1,  602  n.  2. 

is  not  a  nude  pact,  103,  301,  1217. 

is  not  a  mere  offer,  102. 


INDEX  847 

(Reference  is  to  sections) 

Option — Continued. 

lease,  option  in,  separate  from,  113  n.  10. 
mutuality  of  covenants  in,  102,  1214-1217. 
lack  of,  does  not  prevent  specific  performance,  when, 
1214-1217. 
obligates  optionor  to  sell,  102,  105. 
but  does  not  obligate  optionee  to  buy,  102,  105. 
on  public  works  and  plants,  116. 

oral,  when  sufficient,  401-403.    ( See  Statute  of  Frauds. ) 
part    performance,    effect,    418,    1207.      (See    Statute    of 

Frauds. ) 
parties  to,  201-207. 

payment  under,  901-943.     (See  Payment  and  Tender.) 
perpetuity,  option  as,  218-224.     (See  Perpetuity.) 
possession,  right  to  under,  513.    (See  Possession.) 
pre-emption,  defined,  101,  211  n.  6. 
"preferential  right"  defined,  101. 
property,  interest  or  estate  in  property  passing  by,  501-520. 

(See  Property  under  Option.) 
remedies  for  enforcement  of,  1101-1126.     (See  Remedies.) 
renunciation  of,  711.    (See  Breach,  Renunciation.) 
rescission  of,  712.    (See  Rescission.) 
seal,  effect  of  on,  332-3. 

specific  performance,   1201-1254.      (See  Specific  Perform- 
ance.) 
Statute  of  Frauds,  401-419.     (See  Statute  of  Frauds.) 
surrender  of,  710.    (See  Discharge,  Surrender.) 
tender  under,  901-943.    (See  Payment,  Tender.) 
terms  and  conditions  of,  209-214. 

certain,  definite  and  complete,  must  be,  209. 
description    of    property,    214.      (See    Property    under 
Option.) 

modification  of,  408.     (See   Statute  of  Frauds,   Exten- 
sions.) 

parties,  202-207.     (See  Parties.) 

price   for   property,   under   "first   refusal,"   212.     (See 
Price,  Arbitration,  Valuation.) 
under  first  chance  to  make  a  contract,  212. 

time  limit  on,  209,  218-224. 


848  LAW   OF    OPTION    CONTRACTS 

(Beference  is  to  sectiona) 

Option — Con  tin  n  ed. 

writing,  when  required,  to  be  evidenced  by,  401-419.    (See 
Statute  of  Frauds.) 

when  offer  requires  written  contract,  208  n.  2. 
time  limit  on,  218-224.    (See  Time,  Perpetuity.) 
title  to  property,  when  passes,  501-508,  514.    (See  Property 

under  Option.) 
title  to  property,  conveyance  of,  1001-1008.    (See  Deed  of 

Conveyance,  Title.) 
title  to  property,  sufficiency  of,  1005.    (See  Title.) 
title  to   property,   encumbrances  on,   1006.     (See   PiUcum- 

brances.) 
to  accelerate,  maturity  of  chattel  mortgage  debt,  119. 
to  accelerate  maturity  of  real  estate  mortgage  debt,  120. 
to  lessee  to  purchase,  113,  836.    (See  Lease.) 
to  lessee  to  renew  or  extend,  831,  et  seq.    (See  Renewal  of 

Lease.) 
to  lessor  to  extend  or  renew,  836, 
to  purchase,  defined,  101. 
to  purchase  "if  liked,"  described.  111,  112. 
to  re-purchase,  101. 
to  return  a  purchase.  111,  112. 
to  re-sell,  1002  n.  11. 
to  sell,  defined,  101. 
to  terminate  contract,  117. 
validity  of,  215.    (See  Validity.) 

withdrawal  as  revocation  of,  701-719.    (See  Withdrawal.) 
'writing,  when  must  be  evidenced  by,  401-404.    (See  Statute 

of  Frauds.) 

Optionee.   See  Joint  Optionees,  Parties. 
as  party  to  option  contract,  202. 
as  party  to  suit,  1241-2. 

duty  of,  to  tender  deed  for  execution,  1002,  921,  112  n.  3. 
election  by,  802.    (See  Election.) 
fiduciary  relation  between  joint  optionees,  202  n.  2. 
is  not,  as  such,  agent  of  optionor,  204  n.  3. 
is  not  entitled  to  possession,  513. 
notice  of  election  by,  802.    (See  Election.) 


INDEX  849 

(Reference  ia  to  sections) 

Optionee — Continued. 

option  imposes  no  obligation  on,  to  purchase,  prior  to  elec- 
tion, 102,  105. 

payment  of  price  by,  902.    (See  Payment.) 

remedies  of,  1102,  1118-9.    (See  Remedies  of  Optionee.) 

right  of  one  of  several  to  sue,  1238. 

rights  of,  under  oral  election,  414-416,  1102. 

right  of,  to  discover  name  of  third  person  making  offer, 
211  n.  6. 

right  of  recovery  when  offer  of  third  person  not  bona  fide, 
211  n.  7. 

rights  as  between  junior  and  senior  optionees,  516. 

tender  of  price  by,  902.    (See  Tender.) 

Optionor.   See  Joint  Optionors,  Parties. 
as  party  to  option  contract,  202. 
as  party  to  suit,  1241-2. 
duty  of,  to  tender  deed,  1002,  921,  112  n.  3. 
may  sell  option  property,  subject  to  option,  702  n.  1,  102  n,  1. 
need  not  own  property  to  give  option  on  it,  215  n.  11. 
notice  of  election  to,  809. 
payment  and  tender  to,  903. 
payment  and  tender  to  grantee  of,  903. 
remedies  of,  1101,  1116-7,  1122-6.    (See  Remedies.) 
right  of,  to  sell  option  on  his  property,  215. 
rights  of,  under  oral  election,  417. 
rights  of,  under  written  subscribed  election,  417. 

Option  to  Extend  Lease.  See  Lease,  Extensions,  Renewal 

of  Leases. 

Option  to  Mature  Mortgage  Debt.   See  Chattel  Mortgage, 
Real  Estate  Mortgage. 

Option  to  Renew  Lease.  See  Lease,  Renewal  op  Leases. 

Option  to  Re-Purchase.    (See  Option.) 
defined,  101. 

Option  to  Return.  See  Option. 
defined,  111,  112,  101. 

54 — Option  Contracts. 


850  LAW    OF    OPTION    CONTRACTS 

(Reference  is  to  sections) 

Option  to  Re-Sell.   See  Option. 

as  within  Statute  of  Frauds,  402  n.  8. 
referred  to,  1002  n.  11. 

Option  to  Sell.   See  Option. 

action  to  recover  price  under,  1105. 
action  to  recover  deposit  under,  1107. 
defined,  101. 
time  to  elect  under,  853, 

Option  to  Terminate  Contract.   See  Option. 
advertising  route  in  street  cars,  117  n.  9. 
as  making  agreement  an  option,  110. 
as  within  Statute  of  Frauds,  404  n.  4. 
clause  giving  right  to  sell,  708. 
construction  of  in  favor  of  party  bound,  117  n.  3. 
contract  of  baseball  player,  117. 
exercise  of,  is  not  breach,  when,  117. 
for  newspaper  route,  117. 
is  valid,  117. 

reasonable  grounds  for,  when  necessary,  117. 
rule  of  laches  as  applied  to  option  to  terminate  lease  and 

option,  1250  n.  8. 
rule  as  to  mutuality,  117,  1236. 
Sunday  not  counted  in  time,  when,  117  n.  10. 
to  make  effective,  notice  necessary,  117. 

time  and  mode  of  giving,  117. 
tinder  "first  refusal,"  clause,  708  n.  6. 
will  be  enforced,  when,  117. 

without  time  limit,  terminable  by  either  party  on  notice,  117. 
when  no  time  fixed,  reasonable  implied,  117. 

Oral  Election.   See  Election, 

Part  Performance,   See  Specific  Performance,  Statute  of 
Frauds. 
as  ground  for  equitable  relief,  for  non-payment,  941,  418, 

405. 
burden   of   proof   and   preponderance   of   evidence   as   to, 

1253  n.  7  and  8, 
by  optionee  not  available  to  optionor,  417  n.  4. 


INDEX  851 

(Eeference  is  to  sections) 

Part  Perpohmance — Continued. 

election  is  necessary  to  invoke  rule  of,  418. 
equitable  rule  stated,  418,  1207,  1208. 

what  acts  sufficient  as,  1207. 
full  performance  takes  contract  out  of  Statute  of  Frauds, 
418,  402. 

but  not  broker's,  418  n.  2. 
of  oral  contract  within  Statute  of  Frauds,  418,  1207,  1208. 
pleading,  1244,  419  n.  3. 
rule  of,  does  not  obtain  at  law,  418. 

Parties.   See  Optionor,  Optionee. 
acting  under  power  of  attorney,  204. 
administrator,  203,  808,  812.    (See  Administrator.) 
agents,  authority  and  liability  of,  204,  205.    (See  Principal 

and  Agent.) 
broker,  204,  205. 
donee  of  power,  203  n.  I. 
executor,  203,  808,  812.    (See  Executor.) 
femme  covert  option  of,  is  not  void,  207  n.  3. 
fiduciary  relation  of  joint  optionees,  202  n.  2, 
general  manager  of  corporation,  204  n.  6. 
guardian,  203. 

joint  and  several,  206,  805,  811. 
joint  tenants,  as,  206.    (See  Joint  Tenants.) 
partners,  806a,  807. 
power  of  executor,  administrator  and  guardian,  concerning 

options,  203.    (See  Executor,  etc.) 
tenants  in  common  as,  206,  806,  811.    (See  Joint  Tenants.) 
to  option  contract,  202. 
wife  as  affecting  homestead,  or  dower  right,  207. 

Parties  (To  Suit.)    See  Specific  Performance. 
generaUy,  1241-1243. 

Partition. 

when  option  covers  undivided  interest  in  property,  822  n.  2, 


852  LAW   OF    OPTION    CONTRACTS 

(Reference  is  to  sections) 

Partnership.    (Partners.) 

agreement  for  termination  or  renewal,  116  n.  3, 
agreement  to  procure  option  on  mine,  from  corporation  and 

divide  stock  within  Statute  of  Frauds,  403. 
authority  of  one,  to  convey  land  of  the  other,  806a. 
authority  of  managing  partner,  206  n.  5. 
authority  of  one  partner  to  surrender  lease,  807  n.  2. 
election  by  partners,  806a,  807. 
election,  effect  on,  of  change  in  membership,  807. 
"first  refusal"  option  as  between  partners,  211  n.  4. 
in  lands,  806a. 
joint  tenants  are  not,  206. 

one  partner  as  agent  of  other  and  of  firm,  806a,  811. 
option  to  purchase  as  between  themselves,  211  n.  4. 
option   by   one   partner  acting   for  both,    binding,   when, 

407  n.  4. 
optionor  and   optionee   as   partners   for   improvement    of 

property,  action  for  damages,  1115  n.  4. 
profits  from,  right  to,  520  n.  3. 
payment  of  debts  incurred  after  option  and  before  election, 

under  option  between  partners,  520. 
rights  as  between  partners  on  renewal  of  lease  made  by  one, 

807  n.  2. 
tenants  in  common  are  not,  206. 
when  lands  held  by,  considered  personalty,  806a. 

Payment. 

amount  of,  908. 

assessments  for  street  work,  allowance  for,  909  n.  4. 

allowance  for  street  area,  908  n,  1. 

attorney's  fees  for  examining  title,  909. 

full  amount  required,  908. 

insurance  money,  application  of,  909. 

interest  as  item  of,  909. 

mortgage  outstanding,  allowance  for,  908  n.  1,  910. 

option  outstanding,  allowance  for,  910  n.  5. 

outstanding  mortgage  deducted,  908  n.  1,  910. 

part  payment,  is  not  sufficient,  908  n.  1. 

rent,  allowance  for,  910. 


INDEX  853 

(Eeferenee  is  to  sections) 

Payment — Continued. 

rule  "de  minimis"  applies,  908  n.  1. 

taxes,  allowance  for,  909. 

timber  cut,  allowance  for,  908  n.  1. 

under  arbitration  and  valuation  clauses,  911. 

under  "first  refusal,"  908. 
application  of,  rule  does  not  apply  to  option,  501  n.  1. 
as  act  of  election,  925-6,  868  n.  3,  839. 

distinguished  from  payment  or  performance,  914,  843. 

distinguished  from  election  under  time  as  essence  rule, 
862. 
as  part  performance,  under  Statute  of  Frauds,  1207. 
as  perfecting  right  of  optionee  to  enforce  contract,  901. 
assessments  for  street  improvement,  payment  of,  by  whom, 

520  n.  5. 
bona  fide  purchaser,  rule,  as  to,  515  n.  10. 
by  whom  made, 

agent  of  optionee,  902. 

assignee  of  optionee,  902. 

co-tenants,  902. 

optionee,  902. 

other  person  assuming  obligation,  902. 

uncle  of  infant  optionee,  902  n.  4,  5. 
consideration,  time  of  payment,  for  option,  301  n,  3. 

part  payment  as  consideration  for  option,  322. 

deposit  as  consideration  for  option,  322. 
distinguished  from  election,  as  to  time  of,  862. 
effect  of,  943. 
effect  of  failure  to  object  to  sufficiency  of, 

certificate  of  deposit,  912. 

bank  notes,  912. 

draft,  912. 

terms  of  payment,  912. 
election  distinguished  from,  862,  914. 

payment  as  act  of,  925,  926,  868  n.  3. 

made  conditional  on  time  of  payment,  841. 
form  and  sufficiency  of,  906. 

actual  production  of  money  necessary,  when,  906. 

cash  in  lieu  of  security,  when,  907. 


S54  LAW   OF   OPTION    CONTRACTS 

(Reference  is  to  sectiona) 

Payment — Continued. 
check  as,  907, 

gold  and  silver  coin  as,  907. 
installments  tendered  in  lump,  as,  907. 
money,  payment  in,  necessary,  906. 
part  payment,  908  n.  1. 
terms  of  contract  control,  906-908. 
partnership,  payment  of  debts  of,  520. 
place  of, 

at  office,  in  absence  of  optionor,  good,  905. 
at  residence  or  office  of  optionor,  when,  904. 
implied  by  law,  when,  904. 
personal  tender  of  anywhere,  when,  904. 
when  designated  in  option,  904. 

good  though  optionor  dead,  905. 
where  option  executed,  when,  904. 
rule  when  optionor  out  of  state,  904  n.  4. 

when  optionor  evades,  905. 
taxes,  payment  of,  by  whom,  519,  113  n.  10. 
tender  of,  does  not  defeat  right  to  payment,  906. 
time  of,  913-942. 
general  rule,  913. 
breach,  failure  to  pay  in  time,  as,  913. 

as  ground  for  denying  specific  performance,  913  n.  4. 

failure  to  pay  does  not  ipso  facto,  amount  to,  923  n.  2. 
cash,  when  presumed  to  be,  918. 
construction  of  particular  clauses,  908,  et  seq. 

"first  refusal"  to  purchase,  908. 

for  arbitration  and  valuation  to  fix  price,  911. 

fixing  price  by  the  acre,  908. 

actual  acreage  controls  paper  acreage,  when,  908. 

for  undivided  interest,  908  n.  3. 

"on  or  before,"  918. 

option  in  leases,  involving  rent,  910. 
essence  under  option,  914,  920. 

when  payment  act  of  election,  914. 

cases  holding  payment  act  of  election,  916,  917. 

cases  holding  payment  not  act  of  election,  915,  922. 


INDEX  855 

(Reference  is  to  sections) 

Payment — Continued. 

essence  of  bilateral  contract,  when,  919,  920. 

how  so  made,  920. 

how  so  made  after  execution  of  contract,  920. 

rule  applicable  to  mining  property,  920  n.  6. 

rule  when  delivery  of  deed  and  payment  concurrent 
acts,  921,  922. 
failure  to  pay  at  time  fixed  is  breach,  913. 

rule  of  forfeiture  as  to,  913. 

rule  of  forfeiture,  when  applicable  to  options,  913,  914. 
forfeiture,  rule  of,  as  to,  913. 
of  mortgage  to  secure  price,  918, 
"on  or  before"  construction  of,  918. 
option  to  re-purchase,  rule  as  to,  916  n.  7. 
specific  performance,  effect  of  breach  on  right  to,  913  n.  4. 
title,  when  found  regular,  rule,  1007  n.  4. 
to  whom  made, 

agent  of  optionor,  903  n.  3. 

beneficiary  in  transaction  involving  fraud,  903  n.  3. 

debtor  after  assignment,  903  n.  6. 

deposit  in  bank,  903  n.  4. 

grantee  of  optionor,  903. 

guardian,  903  n.  7. 

joint  optionors,  903. 

minors,  1244  n.  21. 

officer  of  corporation,  903  n.  3. 

optionor,  903. 

or  other  person  named,  903. 

or  person  authorized  by  him  to  receive,  903. 

unauthorized  person,  903. 
representative  of  deceased  optionor,  903. 
sheriff  under  process  of  law,  903  n.  3. 
tenant  in  common,  903  n.  5. 
trustee  for  collection,  903  n.  3. 
trustee  of  cestui  que  trust,  903  n.  3. 
when  option  fixes  place  of,  903  n.  7. 
wife  of  insane  optionor,  903  n.  4- 


856  LAW   OP   OPTION    CONTRACTS 

(Eeference  is  to  sections) 

Payment — Continued. 
waiver  of  timeliness  of,  923,  927-936. 
absence  of  optionor,  933. 
abstract  of  title,  furnishing  of,  929. 
acceptance  of  past  due  payments,  931. 

or  of  rent,  932,  931  n.  9. 
accident,  938. 

account,  objection  to,  as,  928. 
breach  by  optionor,  928-930,  933. 

breach  by  optionor,  when  payment  act  of  election,  924-926. 
conveyance  of  land  by  optionor,  928. 
death  of  optionor  or  optionee,  effect,  937. 
deed,  delivery  or  tender  of,  930. 
demand  for  excessive  payment  is  not,  929. 
encumbrances,  936. 
extension  under  agreements  for,  939. 
failure  to  object  to,  effect,  912. 
improvements,  effect  of,  936,  940. 
inequitable  conduct  of  optionor,  as,  923. 

but  not  of  third  persons,  923  n.  1. 
installment,  waiver  of  one  is  not  of  subsequent,  931. 
mistake,  938. 

negotiations  for  an  accounting  of  rents,  928. 
negotiations  to  have  wife  join  in  deed,  928. 
objections  to  an  account  as,  928. 
objections  to,  effect  of  failure  of  payee  to  make,  912. 
optionor,  conduct  of,  as,  923. 

acceptance  of  past  due  payments,  931. 
or  of  rents,  931,  932  n.  9. 

claiming  not  bound  by  option,  930. 

conveyance  of  option  land,  928. 

declaring  no  payments  would  be  accepted,  930. 

declaring  he  would  not  convey,  930. 

declaring  stock  to  be  returned  was  worthless,  930. 

declaring  tender  would  be  refused,  930. 

delay  in  furnishing  abstract  of  title,  when,  929. 

demand  for  excessive  payment,  929. 

denying  right  of  optionee  to  purchase,  930. 

failure  to  answer  letter,  929. 


rNDEX  857 

(Reference  is  to  sections) 

Payment — Continued. 

form  of  deed  tendered,  928-930. 

preventing  optionee  from  performing,  928,  933. 

refusal  to  deliver  deed,  930. 
oral  extension  of  time,  928. 
possession,  effect  of,  940. 
prevention  by  optionor  of  performance  by  optionee,  928, 

933. 
recognition  of  optionee's  rights,  932. 
refusal  by  one  of  several  heirs,  930  n.  5. 
refusal  by  one  joint  optionor,  935. 
refusal  must  be  absolute  and  unequivocal,  927. 
rents,  objection  to  account  of,  as,  928. 
repudiation  by  optionor,  when  payment  act  of  election, 

924-926. 
sickness,  effect  of,  938  n.  1. 

Penalty.   See  Forfeiture. 

clause  accelerating  maturity  of  mortgage  debt  on  default, 

is  not,  120. 
construction  of  clauses,  109. 

right  of  optionor  to  recover,  where  no  election,  1103. 
rule  of  forfeiture  not  applicable  to  election,  862. 

Performance.    See  Breach,  Election,  Waiver. 
as  essential  to  specific  performance,  1204,  1248. 
distinguished  from  election,  839,  843-7. 
pleading  of,  1244. 

Perpetuity. 

rules  stated,  218. 

common  law  rule,  218. 

test  under,  218. 
Gomm  decision,  219. 

criticisms  of,  219  n.  1,  220  n.  2,  221  n.  3. 
Starcher  Bros.,  decisions,  220. 
covenant  to  renew  as,  223. 

license  of  mine  to  prospect,  223. 

option  distinguished  from  covenant  in  lease  for  perpetual 
renewal,  220  n.  1. 


858  LAW   OF    OPTION    CONTRACTS 

(Reference  is  to  sections) 

Perpetuity — Continued. 

option  for  life  or  term  of  years  as,  224. 

option  on  shares  of  capital  stock,  215. 

option  to  return  bonds  ' '  at  any  time, ' '  222  n.  I, 

option  without  time  limit,  222. 

rule  of  construction,  222  n.  4. 

rule  under  Statute  against  suspending  power  of  alienation, 

221. 
rule  where  no  time  expressly  fixed,  222. 
power  of  sale  to  executor,  222  n.  2. 
power  to  trustee  to  sell,  222  n.  2. 
twenty-one  years  as  limitation  when  not  based  on  lives, 

221  n.  3. 

Personal.  Property, 

agreement  for  sale  and  purchase,  when  within  Statute  of 

Frauds,  403. 
description  of,  in  option,  214, 

executed  sale  of,  not  within  Statute  of  Frauds,  418  n,  2. 
option  is,  116  n.  1, 
remedies  of  buyer,  for  breach  by  seller,  1119. 

measure  of  damages,  1119, 
remedies  of  seller  for  breach  by  buyer,  1119. 

measure  of  damages,  1119, 
specific  enforcement  of  contract,  1210, 
taking  possession  of,  as  an  election,  827  n.  6. 
tender  of,  passes  title,  1116  n,  3, 

rule  otherwise  as  to  land,  1116  n.  3. 

Pleading.    See  Answer,  Complaint,  Counterclaim,  Cross- 
Complaint,  Demurrer. 
answer,  1246-8, 
complaint  for  specific  performance,  necessary  allegations, 

1244. 
complaint  for  reformation  of  contract,  1245. 
consideration,  when  necessary  to  allege,  1120  n,  1,  1244  n,  5, 
contracts  within  Statute  of  Frauds,  rule,  419. 
cross-complaint,  when  proper,  1246. 
counterclaim,  when  proper,  1246. 
defenses  in  answer,  1246,  1248. 


INDEX  859 

(Reference  is  to  sections) 

Pleading — Continued. 
demurrer  to  complaint  or  bill,  1246. 
inconsistent  defenses,  when  proper,  1246  n.  2. 
election,  when  necessary,  112  n,  3,  1120,  1244. 
laches,  1250. 

part  performance,  419  n.  3,  1244. 
revocation  of  arbitration,  1212  n.  9. 
Statute  of  Frauds,  pleading,  contracts  within,  419. 
tender,  1120. 
tender  of  price  in,  when  proper,  942,  1244  n.  19. 

Pledge. 

distinguished  from  agreement  to  repurchase,  116. 
distinguished  from  option,  116. 

of  option,  as  consideration  for  other  contract,  318  n.  I. 
option,  is  subject  of,  116  n.  1. 

Pollicitation. 

option  is,  101  n.  1. 

Possession.    See  Part  Performance,  Election,  Statute  op 

Frauds,  Ejectment. 
as  affecting  right  of  optionor  to  withdraw  option,  703  n.  8. 
as  affecting  rule  as  to  laches,  1250  n.  5. 
as  an  election,  827. 

as  part  performance  under  Statute  of  Frauds,  1207. 
by  optionee  during  arbitration  proceedings,  1125  n.  8. 
by  tenant  under  lease,  is  notice  of  option  to  purchase  therein, 

515  n.  8. 
detainer,  to  recover,  1125. 

duty  of  optionee  to  care  for  property,  while  in,  513  n.  5. 
effect  of  making  improvements,  on  right  to,  513. 

under  mining  license,  513. 
ejectment,  to  recover,  1123. 
optionee  is  not  entitled  to,  when,  513. 
optionee  not  entitled  to  under  option,  513,  113  n.  10. 
optionee   in,   trespasser   after   expiration   of   option   time, 

113  n.  10. 
possession  does  not  obligate  optionee  to  pay  taxes,  506. 


860  LAW   OF    OPTION    CONTRACTS 

(Reference  is  to  sections) 

Possession — Continued. 
right  to,  of  piano,  as  between  administrator  and  widow  of 

optionor,  513  n.  5. 
taken  by  one  joint  optionee,  is  for  all,  806  n.  1. 

Power.   See  Executor,  Trustee. 

donee  under  power  of  sale,  can  not  give  option,  203  il  1. 
of  attorney,  construction  of,  204. 

Power  op  Attorney. 

agreement  authorizing  agent  to  sell,  etc.,  is,  114  n.  4. 

construction  of,  204. 

duty  of  person  dealing  with  agent  to  ascertain  authority,  204. 

power  of  agent  under,  204. 

power  of  agent  to  sell  on  credit,  204. 

time  limit  on,  204. 

Practice.    See  Evidence,  Pleading. 
decree  in  specific  performance,  1254. 
miscellaneous  points  on,  1121. 

sufficiency  of  evidence  to  sustain  various  findings,  1253  n.  13. 
right  to  damages  in  lieu  of,  or  as  incident  to,  specific  per- 
formance, 1247. 

Pre-Emption. 

defined,  101,  211  n.  6. 

right  of,  when  one  partner  becomes  insane,  709  n.  2. 

Preferential  Right. 
defined,  101,  113  n.  10. 
to  purchase  under  lease,  846. 

Price.   See  Arbitration,  Payment,  Tender,  Valuation. 
abatement,  when  allowed,  1006,  1246  n.  2. 
action  by  optionor  to  recover,  1116.    (See  Remedies.) 
action  by  optionee  to  recover  payments  made,  1102. 
allowance  and  adjustment  on  election  for, 

coal  mined,  520. 

debts  of  partnership,  520. 

dividends  on  capital  stock,  518. 

profits  from  business,  520. 

rents,  519. 


INDEX  861 

(Beference  is  to  sectioos) 

Pbice — Coniinu  ed. 

taxes,  519.    (See  Taxes.) 

timber  cut,  520. 

water  rates  received,  520  n.  5. 
assignee  entitled  to  purchase  for  same  price  as  assignor,  610. 
"fair  market  price,"  meaning  of,  211  n.  6. 
"first  refusal,"  price  fixed  by  offer  of  third  person,  211,  212. 
must  be  definitely  fixed  by  terms  of  option,  210. 

rule  applies  to  renewal  of  lease,  210. 

rule  under  "first  refusal,"  211,  212. 

rule  under  arbitration  clauses,  213. 

offer  of  third  party  must  be  bona  fide,  211  n.  7. 
option  void,  if  price  for  property  not  fixed,  210. 
reasonable  price,  when  law  implies,  210  n.  2. 

Principal  and  Agent.    See  Attorney. 
agency  distinguished  from  option,  114. 
agreement  held  brokerage  contract,  114  n.  4. 
agreement  held  power  of  attorney,  114  n.  4. 
agreement  held  selling  agency  with  option  to  buy,  114  n.  4. 
agreement  for  division  of  commissions,  when  within  Statute 

of  Frauds,  205  n.  9,  402  n.  6. 
agreement  between,  as  creating  relation  of  landlord  and 

tenant,  114. 
authority  and  power  of  agent, 
can  not  buy  for  himself,  205. 
to  consent  to  conditional  election,  838  n.  3. 
to  elect,  414  n.  4. 
to  give  option,  204,  205. 
to  procure  option,  not  authorized  to  give  agreement  of 

purchase,  205. 
to  sell,  can  not  give  option,  205. 
to  surrender  option,  710  n.  12. 
sub-agent,  can  not  appoint,  205. 
to  sell  not  authorized  to  assign,  when,  610  n.  2. 
when   must  be  in  writing,   204,   407.     (See   Statute  of 
Frauds.) 
co-agent,  with  power  to  sell,  can  not  give  option,  205  n.  9, 
205  n.  4. 


862  LAW   OF   OPTION    CONTRACTS 

(Eeference  is  to  sections) 

Principal  and  Agent — Continued. 

compensation,  when  agent  entitled  to,  205. 

construction  of  agreements  between,  114. 

election  by  principal,  802. 

election,  written  authority  to  agent  to,  802,  414  n.  4, 

fraud  of  agent,  right  of  principal,  205. 

notice  to  agent  is  notice  to  principal,  515.    (See  B<ma  Fide 

Purchaser.) 
optionee  as  such  is  not  agent  of  optionor,  204  n.  2. 
optionor,  right  of,  to  enforce  agreement  between,  1101  n.  1. 
optionor,  right  of,  against  prin«ipal,  when  option  taken  in 

agent's  name,  609. 
partners  as  agents  of  firm  and  of  other  partners,  806a,  807. 
principal,  right  of, 

to  recover  for  fraud  of  agent,  205. 

to  recover  share  of  agent's  profits,  205  n.  6. 

to  option  taken  in  name  of  agent,  when,  205. 
promoter  is  not  agent  of  owner  of  land,  205  n.  9. 
ratification  by  principal  of  agent's  acts,  205  n.  9. 
signature,  when  binds  agent,  204  n.  6. 
tenant,  one  as  agent  of  other  co-tenant,  805,  806,  811, 
undisclosed  principal,  right  of  to  elect,  802. 

to  sue,  1238. 

Privilege.   See  Interpretation,  First  Refusal,  etc. 
"first  privilege,"  defined,  211  n.  6. 

Profits. 

of  business,  to  whom  belongs  upon  election  under  option  to 
re-purchase,  520. 

Promissory  Note,  See  Negotl^le  Instruments. 

Promoter.   See  Corporation. 

is  not  agent  of  land  owner,  205  n.  9. 

Property.    See  Description,  Property  Under  Option,  Per- 
sonal Property. 
election  as  to  part  of,  right  of,  822. 
option  is  not  sale  of,  101,  102. 
option  is  personal  property,  116  n.  1,  602  n.  2,  501  n.  1. 


INDEX  863 

(Reference  ia  to  sections) 

Property — Contin  ued. 

possession  of,  513.    (See  Possession. }j 
title  to,  1005-6.    (See  Title.) 
when  passes,  501-506,  514. 

Property  Under  Option.   See  Description,  Personal  Prop- 
erty, Possession,  Title. 

assessment  of,  for  taxation,  506. 

assessment  of,  for  street  improvements,  520. 

as  within  condemnation  statute,  502  n.  4. 

bona  fide  purchaser  of,  rule,  515.    (See  Bona  Fide  Pur- 
chaser. ) 

coal  mined,  right  to,  520. 

debts  of  partnership,  liability  for,  520. 

dividends  on  shares  of  stock,  right  to,  518. 

effect  of  large  consideration  for  option  as  vesting  title,  501 
n.  4,  862  n.  4. 

election  vests  equitable  title  in  optionee,  514,  872. 

election  as  to  part  of,  822. 

where  interests  are  undivided,  822  n.  2. 
when  by  acreage,  822  n.  4. 

equitable  conversion  of,   rule,   517.     (See  Equitable  Con- 
version. ) 

execution  against  optionee,  effect  of  levy  of,  509. 

insurance  money  from,  512.    (See  Insurance.) 

insurable  interest  in,  of  optionee  and  optionor,  511.    (See 
Insurance.) 

judgment  against  optionee,  effect  of,  509. 

liens  of  laborers  and  mechanics  on,  509. 

mortgage  of,  by  optionee,  510.    (See  Mortgage.) 

option  right  is  property,  602  n.  2,  501  n.  1,  116  n.  1. 

optionee,  title  to  does  not  vest  until  election,  501,  506,  514. 

possession  of,  right  to,  by  optionee,  513.    (See  Possession.) 

profits  from  business,  520. 

removal  of,  as  maturing  chattel  mortgage,  119. 

rents,  right  to,  519. 

right  of  junior  and  senior  optionees,  516. 

right  of  owner  to  give  option  on,  215. 

royalties,  right  to,  520. 


864  LAW   OF    OPTION    CONTRACTS 

(Reference  is  to  sections) 

Property  Under  Option — Continued. 

rule  of  relation  as  applied  to,  514  n.  2,  512  n.  2. 
timber  cut,  credit  for,  520. 
title,  when  passes  under  bilateral  contract,  501. 
title,  when  passes,  under  options,  501-506,  514. 

decisions  holding  no  title  vests  till  election,  501,  502. 
option  in  lease,  502. 
option  to  sell,  502  n.  3. 
option  to  re-purchase,  502  n.  3. 
decisions  holding  equitable  title  passes,  503-505. 
mining  option  and  license,  506,  513  n.  5. 
under  recording  act,  506. 

voting  pool  and  option  on  shares  of  stock,  506. 
taxation,  rule  as  to,  506. 
rule  under  alternative  stipulation,  502. 
rule  under  bailment  wdth  option  to  return,  508. 
rule  under  bilateral  contract,  501. 
rule  as  to  sale  on  trial  or  approval,  507. 
rule  as  to  sale  and  return,  507. 
water  rates,  right  to,  520  n.  5. 

Proposal.    See  Offer,  Option,  Option  Contract. 
is  a  first  invitation  for  a  bargain,  103. 

Public  Policy.    See  Validity  of  Option. 
specific   performance  not  granted  when  contract  against, 
1204. 

Public  Service  Corporations. 
option  by  municipality  on  works  and  plants  (cases),  116  n.  3. 

Purchase.   See  Option. 

option  to,  definition  of,  101. 
distinguished  from  option  to  sell,  101. 

Purchaser.   See  Bona  Fide  Purchaser. 

Purchase  ]\roNEY.  See  Price, 

paid  on  price,  right  to  optionee  to  recover  back,  1102. 

Qualified  Election.    See  Conditional  Election. 

Quiet  Title.   See  Suit  to  Quiet  Title. 


INDEX  865 

(Eeference  is  to  sections) 

Real  Estate  ]Mortgage.   See  Chattel  Mortgage,  Mortgage. 
case  where  optionor  was  to  mortgage,  1006  n.  3. 
distinguished  from  option,  115. 

distinguished  from  agreement  to  re-purchase,  115  n.  3. 
of  leasehold,  does  not  cover  option  in  lease,  when,  510. 
of  optioned  property  by  optionee,  510. 
option,  does  not  pass  to  mortgagee,  510  n.  2. 
option  to  mature  debt  on  default,  120,  121. 

in  payment  of  interest,  120. 

in  payment  of  taxes,  r20. 

under  insecurity  clause,  120. 
construction,   requiring  default  in  both  interest   and  tax 

clause  to  mature,  120  n.  1. 
construction,  rule  where  note  secured  by  trust  deed,  120  n.  2. 
debt  not  matured  without  election,  120,  121. 

or  where  election  waived,  120. 
election,  sufficiency  of  notice  of,  121. 

where  mode  and  time  specified,  121. 
equitable  relief,  sometimes  granted  to  mortgagor,  121  n.  3. 
forfeiture,  option  clause  does  not  work,  120. 
negotiability  of  note  secured,  120. 

interest  clause  does  not  affect,  120. 

unless  option  exercised,  120. 

insecurity  clause  renders  note  non-negotiable,  120. 

tax  clause  renders  note  non-negotiable,  120. 
penalty,  option  clause  is  not,  120. 
rescission  of  election,  effect  on  surety,  121. 
statute  of  limitations,  default  and  election  start,  120. 

otherwise  if  no  election,  120. 

or  if  default  is  cured  or  waived,  120. 
surety,  effect  on,  of  rescission  of  election  by  mortgagee,  121. 
valid,  option  clause  is,  120. 
waiver  of  mortgagor's  default, 

by  failure  of  mortgagee  to  exercise  option  property,  121. 

by  accepting  past  due  payments,  121. 

by  tender  before  election,  121. 

of  prior  default,  is  not  of  subsequent,  121. 


55 — Option  Contracts. 


866  LAW  OF   OPTION    CONTRACTS 

(Eeferenee  is  to  sections) 

Redemption,    See  Re-Purchase. 

distinguished  from  re-purchase,  115  n.  3. 

right  of  corporation  to  redeem  its  shares,  215  n.  11. 

right  of,  defined,  101. 

Reformation, 

contract  intended  as  option  drafted  by  mistake  as  sale, 

1245  n.  4. 
evidence    of   mistake    must   be   positive    and   satisfactory, 

1245  n.  4. 
facts  for,  must  be  alleged,  1245. 
fraud  as  ground  for,  1245,  217. 
mistake  of  one  party  and  fraud  of  other,  1245  n,  4. 
right  of  optionor  or  optionee  to,  1102,  1245, 
right  to,  of  option,  for  mistake,  fraud,  etc,  217,  1245. 

mistake  must  be  mutual,  1245. 
when  mistake  is  apparent  from  face  of  instrument,  1245  n.  4. 

Refusal,     See    Breach,    Discharge,    First    Option,    First 
Refusal,  Renunciation, 
construed  to  mean  option,  122  n.  5. 
defined,  211  n.  6, 

of  optionor  to  execute,  as  waiver  of  tender  of  deed,  for 
execution  by  optionee,  1002. 

Rejection, 

when  qualified  or  conditional  election  or  acceptance  is 
rejection  of  offer  or  option,  838.  (See  Conditional 
Election.) 

Remedies  of  Optionee. 

generally,  1102,  1104,  1118-9. 

against  assignee  of  optionee,  1115  n.  3. 

against  telegraph  company  for  error  in  telegram,  1114. 

ejectment,  1123. 

evidence,  1122. 

for  price,  under  option  to  return,  1119  n.  5. 

injunction,  1126. 

none  where  optionor  not  in  breach,  1102  n.  1. 

pleading,  1120. 

practice,  1121. 


INDEX  867 

(Reference  is  to  sections) 

Remedies  op  Optionee — Continued. 

reformation,  1102,  1245.    (See  Reformation. )' 
rescission,  1102,  712.    (See  Rescission.) 
for  damages  under  bilateral  contract  (land),  1118,  1119. 
effect  of  clause  barring  action,  1222. 
measure  of  damages, 

costs  and  attorney's  fees,  1118  n.  6. 

English  rule,  1118. 

expenses,  1118. 

interest,  1118  n.  6. 

rule  in  some  American  states,  1118. 

loss  of  bargain  includes,  what,  1118. 

when  bad  faith  exists,  1118  n.  2. 
nominal  damages,  1118. 

right  of  third  person  named  in  contract  to,  1121. 
speculative  and  remote  damages,  1118. 

profits  from  sub-division  of  land,  1118  n.  1. 
profits  from  hotel  business,  1118  n.  1. 
profits  from  re-sale,  1118  n.  1. 
for  damages,  sale  of  personal  property,  1119. 
measure  of  damages,  1119. 
profits,  1119. 
for  return  of  payments,  etc.,  made, 

none,  when  optionee  is  in  default,  1102  n.  1. 

none,  when  optionee  fails  to  elect,  1104  n.  1. 

under  option  to  return,  1105. 

under  option  by  optionor  to  sell,  1107. 

under  liquidated  damage  clause,  1111. 

under  forfeiture  clause,  when  optionee  defaults,  or  fails 

to  elect,  1112. 
when  offer  withdrawn  before  acceptance,  1106. 
when  optionor  fails  to  grade  the  property  as  stipulated 

1106. 
when  title  is  rejected  in  good  faith,  1109. 
when  title  is  imperfect,  1109,  1112  n.  5. 
without  election, 

action  for  damages  for  breach  of  option  contract,  1104 
1102. 


868  LAW   OP    OPTION    CONTRACTS 

(Reference  is  to  sections) 

Remedies  of  Optionee — Continued. 

distinction  between,  and  action  on  bilateral  contract, 
1102,  1104. 
breach  by  optionor  before  expiration  of  time  limit,  1104. 
none    when    offer    withdrawn   before    acceptance,    1104, 

1106,  1102  n.  1. 
none  to  recover  consideration  for  option,  1112. 

or  deposit  money,  1112. 

or  payments  made,  1112. 

under  option,  1104. 
measure  of  damages,  1104,  1115  n.  3. 
upon  election, 

action  to  recover  damages,  1102,  1118. 
action  to  recover  back  purchase  money  paid,  1102,  1118. 
suit  for  specific  performance,  1102,  1118. 
vendee  put  to  election  of  remedies,  1118. 
for  damages, 

fraud,  effect  of  on  right  to  maintain  action  for,  1110. 

fraud,  under  "first  refusal,"  1110. 

fraud,  when  optionor  prevents  election,  1110. 

fraudulent  representation,  1110. 

lease  void  as  a  perpetuity,  1102  n.  1. 

non-delivery  of  goods,  1102  n.  1. 

renewal  of  lease,  1102  n.  1. 

under  "first  refusals,"  1102  n.  1. 

under  liquidated  damage  clause,  1111. 

under  "null  and  void"  clause,  1113. 

when  description  of  property  vague,  1109. 

when  offer  withdrawn  before  tender  of  deed  in  exchange, 

1106. 
when  optionor  conveys  to  bona  fide  purchaser,  1110. 

Remedies  op  Optionor. 
generally, 

abandonment  by  optionee,  effect  of,  1101. 
death  of  optionee,  effect  of,  1101. 
detainer,  1125. 
ejectment,  1123. 
evidence,  1122, 


INDEX  869 

(Reference  is  to  sections) 

Remedies  of  Optionor~C ontinued. 

for  price,   under   executed   contract   within    Statute    of 

Frauds,  402  n.  7. 
injunction,  1126. 

none,  when  optionee  permits  option  to  lapse,  1101,  1103. 
on  sale  of  personal  property,  1119. 
pleading,  1120. 
practice,  1121. 
reformation,  1102,  1245. 

right  to  compel  optionee  to  work  ore  beds,  1103  n.  1. 
right  to  compel  optionee  to  sink  shaft,  1103  n.  1. 
right  to  compel  optionee  to  elect,  1103  n.  2. 
rescission,  1102,  712. 
suit  to  quiet  title,  1124. 
surrender  of  option,  effect  of,  1101. 
under  oral  election,  417,  1101. 
for  damages, 

when  payments  made  were  to  apply  as  rent,  1108. 
none,  when  title  is  not  satisfactory,  1109. 
under  bilateral  contract,  1117, 

effect  of  clause  barring  action,  1222. 
under  lapsed  option,  1101,  1103. 
under  liquidated  damage  clause,  1111. 
under  "null  and  void"  clause,  1113. 
under  option  for  improvement  of  property  as  partners, 

1115  n.  4. 
when  description  of  property  vague,  1109. 
measure  of  damages.    (See  Damages.) 
nominal  when,  1119  n.  3,  1117  n.  2. 
profits  as  special  damages,  1117  n.  2. 
when  no  part  of  price  has  been  paid,  1117. 
when  payments  have  been  made,  1117. 
when  value  exceeds  price,  1117  n.  2. 
when  optionor  held  option  only,  1117  n.  2. 
on  sale  of  personal  property,  1119. 
goods  to  be  manufactured,  1119  n.  3. 
for  price, 

under  bilateral  contract,  1116. 
of  personal  property  sold,  1119. 


870  LAW  OF   OPTION   CONTRACTS 

(Eeference  is  to  sections) 

Remedies  of  Optionor — Continued. 

of  capital  stock  of  corporation  under  option  to  return, 

1105. 
of  capital  stock  of  corporation  under  option  to  sell,  1105. 
right  to  recover  in  action  at  law,  1116,  1117. 
right  to  recover  in  suit  in  equity,  1116,  1117. 
when  notes  are  given  for  price,  1116  n.  3. 
deposit  of  deed  with  clerk,  when  required,  1116  n.  3. 
tender  of  deed  of  conveyance  necessary,  1116, 
tender  of  deed  must  be  kept  good,  1116  n.  3. 
tender  of  deed  does  not  pass  title  to  lands,  1116  n.  3. 
tender  of  deed  distinguished  from  transfer  of  personal 
property,  1116  n.  3. 
on  election  binding  optionee  to  purchase, 
action  for  damages,  1101,  1116. 
strict  foreclosure,  1101,  1116. 
suit  to  recover  price,  1101,  1116. 
vendor  put  to  election  of  remedies,  rule,  1118, 

Remove  Cloud.   See  Suit  to  Quiet  Title, 

Renewal  op  Lease,    See  Lease,  Rent. 

action  for  damages  for  failure  to  renew,  1102  n,  1. 
acts  sufficient  as  election  to  renew,  825,  831-836, 

holding  over  as,  831-836. 

time  of  election  under,  852,  862  n,  3,  864  n,  2. 

by  whom,  802-808. 

right  of  sublessee,  802  n.  1. 
certainty  as  to  terms  of,  209  n.  1, 

of  "first  refusal"  to  renew,  210  n.  4. 
construction  of  clause  for,  rule,  124. 
continues  option  in  first  lease,  113  n.  10, 
covenant  for  perpetual,  distinguished  from  option,  220  n,  1. 
covenant  for  perpetual  runs  with  land,  607  n.  2. 
distinguished  from  extension  of  lease,  831.    (See  Extension.) 
optionor  not  released  from,  by  conveyance,  609  n,  9,  708. 
mutuality  of  covenants,  1211,  113  n,  10. 
rent  under,  must  be  definitely  fixed,  210. 
right  to  renew  for  one  year  of  a  term  of  four  years,  822  n.  1, 
statute  of  frauds,  when  within,  404  n.  4,  407  n.  3,  411  n.  4, 


INDEX  871 

(Reference  is  to  sections) 

Rent.    See  Lease,  Property  Under  Option. 

apportionment  of,  on  exercise  of  option,  519,  113  n.  10. 
clause  applying  payments  as,  defeats  action  for  damages 

by  seller,  1108. 
failure  to  pay  as  discharge  of  option  in  lease,  715,  717  n.  2. 
lessee  not  required  to  pay  rent  and  interest  and  taxes,  519. 
not  required  to  pay  rent  or  profits  when  optionor  resists 
specific  performance,  519. 
once  tendered  need  not  be  tendered  again,  715  n.  2. 
tender  of  rent  with  price,  910. 
terminates  on  election  to  purchase,  when,  519. 
to  whom  payable  under  rule  of  equitable  conversion,  517  n.  5. 
under  option  for  renewal  must  be  definitely  fixed,  210. 
under  statute  providing  for  pro-rating,  519. 
waiver  of,  as  consideration  for  option,  319. 
waiver  of  forfeiture  for  non-payment  of,  by  accepting,  931. 
when  there  is  arbitration,  519. 
when  there  is  defective  title,  519  n.  6. 
when  payable  in  installments,  519. 

Renunciation.    See  Breach,  Discharge. 
acts  not  amounting  to,  711. 
distinguished  from  rescission,  712  n.  1. 
does  not  waive  notice  of  election,  when,  870. 
must  go  to  whole  contract,  711  n.  2. 
not  effective  unless  accepted  as  such  by  other  party,  711. 
proof  of,  must  be  positive,  etc.,  711. 
refusal  of  optionor  to  perform  before  demand  is  not,  711, 

870. 
rule  as  applied  to  conditions  precedent,  711  n.  2,  702  n.  4. 
time  to  sue  upon,  1251,  702  n.  4. 

Replevin. 
right  of  optionee  to  maintain,  under  option  to  repurchase, 
502  n.  3. 

Representative.    See  Executor,  Administrator,  Heirs. 
meaning  of  "legal  representative,"  812  n.  5. 
meaning  of  "personal  representative,"  812  n.  5. 


872  LAW   OP    OPTION    CONTRACTS 

(Reference  is  to  sections) 

Repudiation.   See  Breach,  Discharge,  Renunciation. 
time  to  sue  upon,  702  n.  4,  1251. 

Re-Purchase. 

agreement  to,  held  option  and  not  mortgage,  115. 
agreement  to,  as  within  Statute  of  Frauds,  402  n.  8,  403, 
404  n.  4. 

rule  when  fully  performed,  418  n.  7. 
assignment  of  option  to  re-purchase,  601  n.  1. 
consideration  to  support  agreement  or  option  to,  315. 
consideration  to  support  agreement  or  option  to  re-purchase 

stock,  315. 
consideration  for  agreement  to,  by  third  person,  302  n.  4. 
definition  of  option  to,  101. 
distinguished  from  redemption,  115  n.  3. 
distinguished  from  pledge,  116. 
election, 

time  of,  853. 

time  as  essence,  862  n.  4. 

reasonable  time,  when,  858. 

when  period  of  one  year  commences,  404  n.  4, 

failure  to  elect  loses  option  right,  829,  830. 
laches,  rule  of  applied  to,  1250  n.  1. 
profits  of  business,  right  to  on  election,  520. 
reasonable  time  to  elect,  858, 
statute  of  frauds,  when  agreement  to,  within,  402-404,  418 

n.  7. 
time  to  elect,  853,  404  n.  4. 
time  as  essence,  862  n.  4. 
time,  reasonable,  when,  858. 
time  for  delivery  of  deed,  1002  n.  4. 
title  to  property,  when  vests,  502  n.  3. 

Re- Sell. 

option  to,  1002  n.  11. 

Rescission.   See  Remedies. 

agreement  for,  without  consideration,  712  n.  13. 
by  optionor,  1102. 
by  optionee,  1102. 


INDEX  873 

(Reference  ia  to  sections) 

Rescission — Continued. 

contracts,  what  may  be  rescinded,  712. 
cross-complaint  for,  1245  n.  5. 
defined,  712. 

by  express  words  is  surrender  "in  fact,"  710  n.  12. 

by  acts  is  surrender  in  law,  710  n.  12. 
deposits  made,  right  to  recover,  1112. 
distinguished  from  surrender,  breach,  etc.,  712. 
for  breach,  712  n.  2. 
for  delay  to  exercise  option,  712. 
for  failure  to  deliver  deed,  1002  n.  9. 
for  failure  to  pay  price,  712  n.  7  and  8. 
for  mistake,  fraud,  etc.,  217,  712. 
for  want  or  failure  of  title,  1005,  712. 
for  unproductiveness  of  mine,  712  n.  9, 
mutuality  not  lacking,  under  stipulation  to  rescind,  117  n.  11. 
notice  of,  held  insufficient,  712  n.  13. 
payments  made,  right  to  recover,  1112. 
pleading,  facts  necessary  to  allege,  712  n.  13. 
return  of  property,  when  necessary,  712  n.  13. 
right  of,  after  election,  under  alternative  stipulation,  117. 
right  to  recover  deposit  money  and  payments  made  on,  1112. 
rule  of,  applies  to  option  contracts,  712. 
sale  with  option  to  rescind,  112  n.  3. 

Restraint  of  Alienation.    See  Perpetuities,  Validity  of 
Option. 

Retraction. 

of  acceptance  or  election,  818  n.  5,  871. 

Return. 

action  to  recover  price  under  option,  1105,  1119  n.  5. 

agreement  of,  within  Statute  of  Frauds,  404  n.  4. 

option  to,  defined,  101. 

rule  of  qualified  or  conditional  election  applies  to,  838  n.  3. 

tender  of  property  on  return,  pleading  of,  1120. 

time  of  election  to  return,  858. 

when  statute  of  limitation  starts,  1252  n.  6. 


874  LAW   OF   OPTION    CONTRACTS 

(Eeference  is  to  sections) 

Revocation.    See  Withdrawal, 

Sale.    See  Agreement  op  Sale,  Sale  and  Return,  Sale  on 
Trial  or  Approval. 
agreement  of  sale,  defined,  105. 
defined,  105. 

distinguished  from  bailment  with  option  to  return,  111,  112. 
distinguished  from  option,  104,  105. 
distinguished  from  offer  and  option,  106,  107. 
effect  of  clause  providing  for  termination,  110. 
imposes  obligation  on  purchaser  to  buy,  105. 
of  option  property,  as  revocation  of  offer  or  option,  703. 
on  trial  or  approval,  defined,  101,  111,  112. 
option  to  sell,  definition  of,  101. 
sale  and  return  distinguished  from  option.  111,  112. 

Sale  and  Return.  See  Sale,  Sale  or  Return,  Sale  on  Trial. 
complaint  to  recover  price  must  allege  election  to  return, 

112  n.  3. 
defined.  111,  112. 
distinguished  from  bailment,  508. 
failure  to  return  as  election,  828,  830. 
right  to  return  when  price  not  paid  in  full,  112  n.  3. 
sale  with  option  to  return.  111,  112. 
tender  back  of  property,  necessary,  112  n.  3. 
tender  back  of  corporate  shares,  112  n.  3. 
time  to  return  and  credit  on  price,  112  n.  3. 
when  title  passes,  507,  508. 

Sale  on  Trial  or  Approval.   See  Sale,  Sale  and  Return. 
defined,  101. 

failure  to  return  as  election,  828,  830,  849. 
reasonable  time  to  return,  858. 
when  title  passes,  507,  508. 

common  law  rule,  332. 
does  not  dispense  with  election,  332  n.  6. 
effect  of,  is  to  import  consideration,  301,  332. 
offer  or  option  without  seal,  or  consideration  is  nude  pact, 
301. 


INDEX  875 

(Reference  is  to  sections) 

Seal — Continued. 

option  contract  does  not  require,  332,  208. 

presence  of,  as  giving  mutuality,  1218. 

rule  in  equity,  332, 

statutory  rule,  333. 

when  consideration  implied  by,  may  be  impeached,  332. 

Sell.    See  Sale. 

option  to,  definition  of,  101. 

"Sold" 

construction  of,  as  making  an  agreement  of  purchase,  105 
n.  4. 

Specific  Performance. 
generally, 
acceptance  of  offer  raises  contract  specifically  enforceable, 

801,  814,  1224,  514. 
answer,  1246,  1247. 

arbitration  clauses,  enforcement  of,  1212. 
bilateral  contract  and  not  option  is  subject  of,  1202. 
by  vendor  to  recover  price,  1116. 
common  law,  specific  performance  unknown  to,  1201. 
complaint  or  bill,  1244.     (See  sub-title  infra.) 
decree  in,  1254. 
defenses,  1248. 
discretion  of  court,  granting  of,  within,  1203. 

caution  is  exercised,  1203  n.  3. 

unfairness  distinguished  from  fraud,  etc.,  1203. 

the  test,  1203  n.  3. 
effect  of  clause  for  liquidated  damages,  109  n.  2  and  6. 
election  under  option  raises  contract  specifically  enforce- 
able, 514,  801,  814,  1202,  1224. 
is  equitable  proceeding,  1201. 
laches,  1250.     (See  sub-title  infra.) 
object  of,  1201. 
of  option  to  sell,  1107  n.  1. 
part  performance,  rule  as  to,  1207. 
right  to,  by  optionee,  1102. 


876  LAW  OF  OPTION   CONTRACTS 

(Eeferenee  is  to  sections) 

Specific  Performance — Continued. 

statute  of  frauds,  requirements  of,  1206.     (See  Statute  of 

Frauds.) 
statute  of  limitations,  1252.     (See  sub-title  infra.X 
valuation  clauses,  enforcement  of,  1213. 
adequacy  of  remedy  at  law,  1209. 

must  be  certain,  complete,  etc.,  1209  n.  2. 
rule  as  applied  to  option  on  land,  1209. 
rule  as  applied  to  option  on  chattels,  1210, 
rule  as  applied  to  shares  of  capital  stock,  1210. 
rule  as  applied  to  options  in  leases,  1211. 
complaint  or  bill,  necessary  allegations  in, 
ability,  etc.,  of  plaintiffs  to  perform,  1244. 

general  allegation  of,  sufficient,  1244. 
adequacy  of  consideration,  1244,  324. 
adequacy  of  remedy  at  law,  rule,  1244. 
amount  of  price  due  defendant,  1244.    (See  Price.) 

when  fixed  by  arbitration,  1244  n.  11. 
assignment,  when  plaintiff  is  assignee,  1244. 
contract  and  terms  thereof  as  definite,  certain  and  com- 
plete, 1244. 

just  and  reasonable,  1244. 

mutuality  in,  1244. 
demand  for  deed,  when,  1244. 
demand  of  performance  on  defendant,  when,  1244. 
description  of  property,  1244. 
election,  timely  and  unconditional,  1244.     (See  Election.) 

and  notice  thereof,  1244. 
mutuality  in  contract,  1244.     (See  Mutuality. )_ 
ownership  of  property  by  defendant,  1244. 
part  performance,  when  relied  on,  1244. 
payment  of  price,  and  amount  due,  1244. 

or  facts  showing  waiver  or  excusing  payment,  1244. 
performance  by  plaintiff,  or  facts  excusing,  1244. 
reformation  of  contract,  facts  showing  right  to,  1245. 
tender  of  deed,  when  necessary,  1244. 
tender  of  price,  or  facts  excusing,  1244. 

in  pleadings,  when  good,  1244. 


INDEX  877 

(Reference  is  to  sections) 

Specific  Performance — Continued. 

consideration,  adequacy  of,  1205,  324.    (See  Consideration.) 
full  performance  as,  306,  307. 
inadequacy  of,  as  evidence  of  fraud,  1205. 
mere  inadequacy  not  sufficient  as  defense,  when,  1205. 
must  be  valuable,  1205. 
must  be  adequate,  1205. 
part  performance  as  consideration,  306. 
rule  of,  does  not  apply  to  option,  1205. 

nominal   sufficient  to   support  option   contract,   1205, 
325-328. 
rule  of  applies  to  bilateral  contracts  only,  1205. 
seal  as  importing  consideration,  1205,  1229,  332. 
decree  in,  1254. 

form  and  contents  of,  1254. 

against  purchaser  with  notice,  1254. 
allowance  as  to  taxes,  1254  n.  3. 
allowance  for  timber  cut,  1254  n.  3. 
allowance  for  use  and  occupation,  1254  n.  3. 
allowance  to  purchaser  with  notice  of  moneys  paid  by 

him,  1254  n.  3. 
allowing  removal  of  improvements,  1254  n.  3. 

or  damages  in  lieu  thereof,  1254  n.  3. 
lien  of,  on  land,  1254. 
provision  in,  for  abatement  for  dower  interest  of  wife, 

1254  n.  3. 
provision  in,  for  abatement  for  outstanding  option,  1254 

n.  3. 
provision  in,  for  abatement  for  physical  encumbrance, 

1254  n.  3. 
provision  in,  for  bond  to  cover  cost  of  sewers,  1254  n.  3. 
requiring  plaintiff  to  pay  street  assessment,  1254  n.  3. 
defenses   to   suit   for,    1248.      (See  sub-title   supra,   ''not 
granted,  when.") 
abandonment  of  option,  1248  n.  9. 
ability,  etc.,  lack  of,  1248. 
adequate  remedy  at  law,  1248. 
contract  uncertainty  in  terms  of,  1248. 
election,  untimely  or  conditional,  1248. 


878  LAW   OF   OPTION    CONTRACTS 

(Reference  is  to  sections) 

Specific  Performance — Continued. 

failure  to  fix  price  by  arbitration,  etc.,  1248. 

failure  of  plaintiff  to  pay  or  tender,  1248. 

fraud,  misrepresentation,  1248  n.  2. 

illegality  of  contract,  1248. 

inadequacy  of  consideration,  1248. 

increase  or  decrease  in  value  of  property,  1249. 

laches,  1248,  1250. 

mistake,  1248. 

mutuality  in  contract,  lack  of,  1248.    (See  Mutuality.) 

non-performance  by  plaintiff,  1248. 

statute  of  frauds,  1248. 

statute  of  limitations,  1252. 

title,  want  of,  or  defect  in,  when,  1248. 

when  inequitable,  1248. 
laches  as  defense  to,  1250,  1248. 

contract  partly  executed  and  possession  taken,  1250. 

delay  due  to  request  of  optionor,  1250  n.  8. 

laches  and  increase  in  value,  1250  n.  1. 

mere  lapse  of  time  is  not,  1250. 

must  be  pleaded  as  defense,  1250. 

option  to  re-purchase  stock  of  corporation,  1250  n.  1. 

statutory  limitation  as  fixing  the  period,  1250  n.  8. 

what  delay  is,  1250. 

where  improvements  made,  1250. 

where  deed  and  payment  are  concurrent  acts,  1250  n.  8. 
mutuality  necessary,  1231-1237.  (See  Mutuality.) 

election  gives  rise  to,  417  n.  3,  416. 

filing  bill  for  specific  performance  gives,  1218.  1237. 

in  arbitration  clause  in  lease,  1212  n,  9. 

in  contract  of  baseball  player,  117. 

in  contract  of  sale  and  purchase,  105. 

in  contract  raised  by  oral  election,  416. 

in  covenants  of  deed  poll,  417  n.  4. 

in  covenants  of  indentures,  417  n.  4. 

in  covenants  of  lease,  417  n.  4. 

in  mining  options  and  licenses,  308,  309. 

in  option  to  terminate  contract,  117,  301  n.  1,  1236. 

in  option  in  lease,  1211,  1231,  417  n.  4. 


INDEX  879 

(Reference  is  to  sections) 

Specific  Performance — Continued. 

in  renewal  clause  of  lease,  113  n.  10. 
injunction,  lack  of  mutuality  as  bar  to,  1126. 
leases,  option  in,  1211,  1231,  417  n.  4. 
mining  options  and  licenses,  308,  309. 
modern  and  established  rule  of,  stated,  1224-1237. 
none  without  election,  1224  n.  1,  1236,  102. 
none  in  offer,  1217. 
of  obligation,  what  is,  1214,  1236. 
of  obligation  when  must  arise,  1218. 
of  obligation,  means  contract  supported  by  consideration, 
1218. 

or  a  contract  under  seal,  1218,  1229. 
of  promise  for  a  promise,  302,  304. 
of  remedy,  what  is,  1214,  1236. 
of  remedy  distinguished  from  mutuality  of  obligation, 

1216,  1217,  1234. 
of  remedy  test  of,  1218,  1236,  117. 
of  remedy,  when  must  arise,  1218. 
of  remedy,  must  exist  at  time  of  suit  or  decree,  1218, 

1237  n.  2. 
old  rule  of,  1219,  1220. 
old  rule  modified,  1221-1236. 
qualification  of  rule  of,  as  affected  by, 

alternative  stipulation,  1236  n.  5. 

clause  for  liquidated  damage,  1236  n.  4. 

clause  relinquishing  action  for  damages   or  suit   fo# 
specific  performance,  1222. 

option  to  terminate  contract,  1222,  1236,  117,  303  n.  I. 

option  to  discharge  all  liability  under  contract,  1236. 

option  to  work  or  abandon  oil,  etc.,  lease,  1236. 

option  to  rescind  or  waive  condition,  1236  n.  4. 

option  to  sue  for  damages  or  for  specific  performance, 
1230. 
so-called  exceptions  to  rule  of  mutuality, 

full  performance  by  infants,  1237. 

full  performance  by  married  women,  1237. 

option  supported  by  consideration,  1237. 

option  in  leases,  1211,  1231. 


880  LAW  OF   OPTION   CONTRACTS 

(Eeference  is  to  sections) 

Specific  Performance — Continued. 

option  to  married  women,  1237. 

option  to  infants,  1237. 

option  within  Statute  of  Frauds,  1237. 
rule  of  applied  to  option  in  lease,  1211,  1231. 
rule  of  applied  to  arbitration  clause  in  lease,  1212  n.  9. 
rule  of  construction,  1211  n.  7. 
not  granted  when, 

contract  is  illegal,  1204. 
contract  is  immoral,  1204. 
contract  is  against  public  policy,  1204. 
contract  is  uncertain  or  not  complete,  1204,  209  n.  1. 
contract  is  unilateral,  1222  n.  8. 
contract  was  secured  through  fraud,  1204. 
contract  was  secured  through  misrepresentation,  1204. 
decree  can  not  be  executed,  1204,  1248. 
decree  would  be  nugatory,  1204,  1248. 
decree  requires  supervision  by  court,  1204,  1248. 
decree  will  harshly  affect  defendant,  1204,  1248. 
decree  will  harshly  affect  third  person,  1204,  1209  n.  3. 
decree  will  not  be  beneficial  to  plaintiff,  1204. 
election  not  made  by  authorized  party,  804  n.  2. 
execution  of  contract  was  unduly  influenced,  1204. 
option  has  lapsed,  1101. 
optionee  has  breached,  913  n.  5. 
plaintiff's  hands  are  not  clean,  1204. 
plaintiff  has  not  performed,  1204. 
there  is  adequate  remedy  at  law,  1209. 
there  is  mistake,  1204. 
unjust  or  inequitable,  1204. 

where  optionee  has  abandoned  option,  710  n.  4,  1101. 
parties  necessary  to  suit, 
English  rule,  1239. 

parties  to  contract  only,  1239. 

parties  in  privity  of  estate,  1239. 

parties  by  representation,  1239. 

purchaser  of  vendee,  is  not,  1239. 

reason  for  rule,  1239. 

rule  when  possession  is  sought,  1239  n.  2. 


INDEX  881 

(Eeference  is  to  sectioofl) 

Specific  Performance — Continued. 
prevailing  American  rule, 

all  persons  having  interest  in  inforcement  of  contract, 
1240. 
or  in  the  subject  matter,  1240. 
assignee  of  vendee,  1240. 
encumbrances,  1240. 
grantee  of  vendor,  1240. 
grantor  as,  1240,  810  n.  7. 
owner  of  partial  interest  in  option,  1240. 
owner  of  legal  title,  1240. 
parties  to  contract,  1240. 

or  their  successors  by  operation  of  law  or  act  of 
parties,  1240. 
purchasers  with  notice,  1240. 
third  person  named  in  contract,  1121. 
parties,  plaintiff, 
administrator,  1241. 
assignee,  1241. 
devisee  under  will,  1241. 
executor,  1241. 
heirs,  1241. 

mortgagee  of  vendee,  1241. 
optionee,  1241. 
partners,  1241. 

purchaser  at  execution  sale,  1241. 
vendee,  1241. 
parties,  defendant, 
administrator,  1242. 
attorney  in  fact  of  owner,  1242. 
executor,  1242. 
grantee  of  vendor,  1242. 
grantee  with  notice,  1242. 
heirs  of  vendor,  1242. 
optionor,  1242. 

owner  of  equitable  interest,  1242  n.  2. 
owner  of  legal  title,  1242. 
vendor,  1242. 

56 — Option  Contracts. 


882  LAW   OF    OPTION    CONTRACTS 

(Reference  is  to  sections) 

Specific  Performance — Continued. 

wife  of  optionor  involving  homestead  and  dower  rights, 
1243. 
persons  entitled  to  sue  for,  1238. 

assignee  of  optionee,  1238  n.  6,  1241  n.  11. 

broker  acting  for  customer,  1238. 

execution  creditor,  1238. 

executor,  1238. 

joint  optionees,  1238. 

legatee,  1238. 

mere  volunteer,  1238, 

officer  of  bank,  1238. 

optionee  refusing  under  "first  refusal,"  1238. 

party  furnishing  part  of  consideration,  1238  n.  1, 

several  optionees,  1238. 

sub-purchaser,  1238  n.  2. 

third  party  named  in  contract,  1121. 

undisclosed  principal,  1238. 
statute  of  limitations.    (See  Statute  of  Limitations.) 

application  of,  to  suit  for  specific  performance,  1252. 

application  of,  to  laches,  1252. 

when  statute  starts,  1252. 
time  or  event  when  suit  may  be  brought,  1251. 

anticipatory  breach,  effect  of,  702  n.  4,  1251. 

election,  only  upon  timely  and  unconditional,  811,  801, 
814,  839,  862. 

on  guaranty,  1251  n.  4. 

payment  or  tender  of  price,  when  necessary,  1002,  1003, 
839,  844,  845,  913  n.  6,  920  n.  3. 

terms  of  contract  control,  1251. 

tender  when  necessary,  920  n.  3,  1002,  1003,  839,  844,  845, 
913  n.  6. 

when  defendant  repudiates  or  renounces,  1251. 

when  notice  for  fixed  period  required,  1251. 

Speculation.   See  Validity  of  Option. 

Stamps.  U.  S.  Internal  Revenue. 
not  required  on  option  under  act  of  1898,  215  n.  11. 


INDEX  883 

(Eeference  ia  to  sections) 

Statuti!  op  Frauds.    See  Election,  Estoppel,  Extension, 

Part  Performance,  Waiver. 
agreements  not  to  be  performed  within  year,  404. 

agreements  to  return  horse,  404  n.  4. 

applies  to  option  contracts,  when,  404, 

extension  of  lease,  411  n.  4. 

option  to  terminate  contract,  404  n,  4. 

oral  lease,  when  within,  404  n.  4. 

renewal  of  contract  for  sale  of  lumber,  404  n.  4. 

when  period  of  one  year  to  re-purchase  commences,  404 
n.  4. 
applies  to, 

agreement  for  division  of  commissions  between  optionee 
and  optionor,  when,  402  n.  6. 

agreement  to  re-purchase,  403,  418  n.  7. 

authority  of  agent,  when,  204. 

broker's  agreement,  402  n.  6. 

choses  or  things  in  action,  when,  403. 

description  of  property,  214. 

extensions,  when,  409,  411.    (See  Extensions.) 

goods,  wares  and  merchandise,  403. 

modification  of  terms  of  contract,  when,  408. 

option  on  chattels,  403. 

option  on  real  estate,  when,  401,  402. 

option  to  renew  lease,  401  n.  2,  404  n.  4. 

option  to  re-sell,  402  n.  8. 

option  in  alternative,  402. 

oral  surrender,  when,  402  n.  9,  710  n.  12. 

order  for  goods,  403. 

sale  of  shares  of  capital  stock  of  corporation,  403  n.  1. 
applies  not  to, 

contracts  created  by  law,  405. 

contracts  implied  by  law,  405. 

contract  part  performed,  when,  418,  1207. 

executed  contract,  402,  405,  418. 

obligations  arising  from  special  statute,  405. 
contract  or  memorandum  thereof,  405. 

must  be  in  writing,  406,  208  n.  2. 

or  by  his  agent  authorized  by  writing,  407. 


884  LAW   OF    OPTION    CONTRACTS 

(Reference  is  to  sections) 

Statute  of  Frauds — Continued. 

must  show  which  party  is  seller  and  which  buyer,  401  n.  3, 

406. 
must  show  the  parties,  406. 
must  set  forth  terms  of  agreement,  406,  407, 
must  describe  the  subject  matter,  406. 
must  in  some  states,  show  consideration,  406. 
party  to  be  charged  is  defendant,  417  n.  3. 
exception  under  special  statute,  417  n.  3. 
parol  evidence  not  admissible  to  supply  essential  term, 

406,  408,  1206. 
waiver  of  defense  of,  by  failure  to  object  to  evidence, 

419  n.  9. 
evidence.    (See  Evidence.) 

parol,  rule  as  to  modification  of  terms  of  contract,  408, 

411,  412. 
rule  as  to  estoppel,  408  n.  2,  412. 
rule  as  to  waiver,  413. 
parol  not  admissible  to  supply  essential  terms  of  contract, 

406,  408,  1206. 
parol,  when  admissible  to  identify  property,  214,  123  n.  6. 
oral  election,  414,  415,  816.    (See  Election.) 
as  affected  by  rule  of  mutuality,  416. 
authority  of  agent,  414  n.  4. 

effect  of  conditional,  415.    (See  Conditional  Election.) 
part  performance,  effect  of,  418,  1207.    (See  Part  Per- 
formance. ) 
remedies  of  optionor  under,  1101. 
rights  of  optionor  under,  417. 
sufficient  in  most  states,  415,  816. 

provided,  option  does  not  require  written,  415,  816. 

or  specify  the  mode  of  communication,  415,  816. 

option  is  in  writing  and  subscribed  by  optionor,  415. 

essential  terms  of  contract  are  in  written  potion,  415. 

oral  election  is  not  conditional,  415. 

oral  election  is  not  a  counter  proposition,  415. 
under  particular  statutes,  414. 
written  acceptance  of  oral  offer,  415  n.  2. 


INDEX  885 

(Reference  is  to  sections) 

Statute  of  Frauds — Continued. 
pleading, 

not  necessary  to  allege  contract  in  writing,  when,  419. 
rule  as  to  authority  of  agent,  419, 
rule  as  to  part  performance,  419. 
rule  as  to  pleading  statute  as  a  defense,  419. 
rule  when  common  counts  are  used,  419  n.  9. 
rule  when  statute  declares  contract  void  if  not  in  writing, 
419  n.  9. 

Statute  op  Limitations. 
application  of  to  suits  for  specific  performance,  1252. 
application  of  to  laches,  1252,  1250  n.  8. 
starts  at  time  fixed  for  electing,  1252. 
when  survey  required,  when  starts,  1252. 
when  starts,  under  agreement  to  re-purchase  stock,  1252. 
when  starts,  under  lease  with  option  to  purchase,  1252. 
when  starts,  under  option  to  return  "at  any  time,"  1252. 
when  starts,  under  option  to  accelerate  maturity  of  mort- 
gage debt,  120. 
effect  of  waiver  of  default,  120. 

Stock  of  Corporation. 

as  goods,  wares,  etc.,  within  Statute  of  Frauds,  403  n.  1. 
as  thing  in  action,  Statute  of  Frauds,  403  n.  1. 
assignment  of  option  to  re-purchase,  601  n.  1. 
assignment  of  guaranty  to  re-pay  price,  601  n.  1. 
consideration    to    support    agreement    to    re-purchase,    or 

option  to  re-sell  or  buy,  etc.,  316. 
option  on,  as  within  Statute  of  Frauds,  403,  404. 
option  on  stock  between  stockholders,  valid,  215. 

by  seller  to  re-purchase  at  option  of  purchaser,  valid,  215. 

by  corporation  to  re-purchase  its  stock,  when  valid,  215. 

right  of,  to  redeem  its  shares,  215  n.  11. 

right  of  to  take  option  on  its  share,  215  n.  11. 

validity  of  futures  on,  216. 
right  to  dividends  as  between  optionor  and  optionee,  518. 
specific  enforcement  of  contract  to  sell,  1210. 
tender  of,  under  option  to  return,  829,  814  n.  2,  112  n.  3, 
voting  pool  on,  as  irrevocable,  703  n.  8. 


886  LAW   OF    OPTION    CONTRACTS 

(Eeference  is  to  sections) 

Strict  Foreclosure. 
optionor  has  suit  for,  when,  1101. 

Sub-Lessee. 

right  of,  to  renew  lease,  607,  802  n.  1. 

Sub-Purchaser. 

right  of,  to  sue  for  specific  performance,  1238  n.  2. 

Subrogation. 

optionee  held  not  subrogated  to  rights  of  holder  of  incum- 
brances paid  off,  516  n.  6. 

Suit  to  Quiet  Title. 
by  optionee,  when,  1124. 
mortgage  by  lessee,  as  cloud  on  title,  1124. 
option  as  cloud  on  title,  1124. 
payments  made  by  optionee,  return  of,  1124. 
when  will  lie,  by  optionor,  1124. 

Sunday.    See  Holiday. 
not  counted  in  term  for  giving  notice  to  terminate  contract, 
when,  117  n.  10. 

Surety. 
not  released  by  rescission  of  election  to  declare  mortgage 

debt  due,  when,  121  n.  8. 
parol  evidence  to  show  part  of  joint  optionees  were  sureties, 

806  n.  1. 

Survey. 

duty  to  have  made,  on  whom,  1008  n.  6. 

extension  of  time  to  make,  1008  n.  6. 

no  title  passes  until  made,  1008  n.  6. 

price  determined  by  survey  and  not  by  acreage  specified  in 

contract,  1008  n.  6. 
statute  of  limitations  does  not  begin  to  run  till,  1252,  1008 

n.  6. 
to  determine  acreage,  failure  to  make,  as  excusing  delay  in 

payment,  1008  n.  6. 
waiver  of,  by  optionee,  1008  n.  5  and  6. 


INDEX  887 

(Eeference  is  to  sections) 

Surrender.   See  Abandonment. 
authority  of  agent,  710  n.  12. 
authority  of  president  of  corporation,  710  n.  12. 
authority  of  one  partner  to  surrender  lease,  807  n.  2. 
burden  of  proof  is  on  optionor,  710  n.  12. 
by  ordinance  of  city,  710  n.  1. 
effect  of  by  optionee,  710,  1101. 

is  bar  to  election,  710  n.  2. 

is  bar  to  claim  for  damages  under  option,  710  n.  3. 

is  bar  to  suit  for  specific  performance,  710  n.  4, 

is  bar  to  any  remedy  by  optionor,  1101. 
may  be  manifested  by  word  or  act,  710  n.  1. 
new  lease  not  surrender  of  option  in  old  lease,  113  n.  10. 
of  oil  and  mineral  lease,  710  n.  12. 

oral,  when  within  Statute  of  Frauds,  402  n.  9,  710  n.  12. 
payment  of  rent  is  not,  of  option,  710  n.  6. 
proof  of  must  be  positive,  etc.,  710  n.  11. 
question  of,  is  one  of  fact,  710  n.  9. 
rule  of  estoppel  applied  to  acts  of,  710  n.  2. 
what  acts  constitute,  710. 
what  facts  amount  to,  is  question  of  law,  710  n.  10. 

Taxes,  Taxation. 

allowance  for  in  decree,  1254  n.  3. 

assessment  for  street  improvement,  payment  by  whom,  520, 

default  in  paying,  as  maturing  chattel  mortgage  note,  119. 

failure  to  pay,  as  discharge  of  option,  716. 

lessee  under  extension  bound  to  pay,  113  n.  10. 

lessee  not  required  to  pay  both  assessment  and  taxes,  519. 

option  as  taxable  property,  506. 

optionee  in  possession  not  liable  for,  when,  506. 

payment  of,  under  extension,  113  n.  10. 

tax  clause  as  destroying  negotiability  of  mortgage  note,  120. 

to  whom  assessable,  506. 

Telegraph  Company. 

liability  of,  for  error  in  transmitting  acceptance  or  notice 
of  election,  1114. 
measure  of  damages,  1114. 


888  LAW   OF   OPTION    CONTRACTS 

(Reference  is  to  sections) 

Tender  (of  money.)    See  Payment. 
amount  of, 

allowance  for  area  of  street,  908  n.  1. 

amount  of  mortgage  deducted,  908  n.  1,  910. 

attorney's  fee,  909. 

case  where  timber  was  cut,  908  n.  1. 

construction  of  particular  clauses,  908. 
"first  refusal"  to  purchase,  908. 
for  undivided  interest,  908  n.  3. 
for  ores  mined,  910. 
price  fixed  by  the  acre,  908. 

insurance  money,  909. 

interest,  909. 

must  be  amount  fixed  by  option,  908,  912  n.  2. 

outstanding  option  on  land,  910  n.  5. 

rent,  910. 

rule  ''de  minimis"  applies,  908  n.  1. 

street  assessments,  909  n.  4. 

taxes,  909. 

under  "first  refusal"  options,  908. 

under  arbitration  and  valuation  clauses,  911. 
as  act  of  election,  839,  844,  845,  925,  926. 
by  one  tenant  in  common  for  all,  902,  805  n.  4. 
by  whom  made, 

agent  of  optionee,  902. 

assignee  of  optionee,  902. 

co-tenants,  902. 

optionee,  902. 

other  person  assuming  obligation,  902. 

representative  of  deceased  optionee,  902. 

uncle  of  infant  optionee,  902  n.  4  and  5. 
to  whom  made, 

agent  of  optionor,  903  n.  3. 

beneficiary  involving  fraud,  903  n.  3. 

debtor,  after  assignment,  903  n.  6. 

deposit  in  court,  1244  n.  19. 

deposit  in  bank,  903  n.  4. 

grantee  of  optionor,  903. 

guardian,  903  n.  7. 


INDEX  889 

(Reference  is  to  sections) 

Tender  (of  money) — Continued. 

in  pleading,  1244  n.  19. 

joint  optionors,  903. 

minors,  1244  n.  21. 

officer  of  corporation,  903  n.  3. 

optionor,  903. 

person  named  in  option,  903. 

person  authorized  by  him  to  receive,  903. 

representative  of  deceased  optionor,  903. 

sheriff  under  process  of  law,  903  n.  3. 

tenant  in  common,  903  n.  6. 

trustee  of  cestui  que  trust,  903  n.  3. 

trustee  for  collection,  903  n.  3. 

unauthorized  pei^on,  insufficient,  903. 

where  option  fixes  place,  903  n.  7. 

wife  of  insane  optionor,  903  n.  4. 
definition  of,  906. 
effect  of, 

creditor  entitled  to  judgment  for  amount  tendered  only, 
906. 

does  not  discharge  debt,  906,  943. 

if  good,  stops  interest,  906. 

on  right  to  recover  costs  of  suit,  906. 
effect  of  failure  to  object  to  sufficiency  of, 

rule  stated,  912. 

by  certificate  of  deposit,  912. 

by  draft,  912. 

by  bank  notes,  912. 

of  interest,  912  n.  9. 

objection  on  one  ground,  waives  all  others,  912. 

objection  must  be  made  at  time  of,  912. 

right  of  subsequent  purchaser  to  object,  912. 
equitable  relief  for  failure  timely  to  tender, 

accident  as  ground  for,  938.    (See  Accident.) 

death  of  optionor  as  ground  for,  937. 

dower  right  of  wife  as  ground  for,  936. 

encumbrances  as  ground  for,  936. 

fraud  as  ground  for,  939,  923. 

improvements  as  ground  for,  936,  940. 


890  LAW   OF    OPTION    CONTRACTS 

(Eeference  is  to  sections) 

Tender  (of  money) — Continued. 

inequitable  conduct  of  optionor  as  ground  for,  923,  929. 
(See  Estoppel.) 

mistake  as  ground  for,  938. 

part  performance  as  ground  for,  941. 

sickness  as  ground  for,  938  n.  1. 
place  of, 

at  office  in  absence  of  optionor  good,  905, 

at  residence  or  office  of  optionor,  when,  904. 

implied  by  law,  when,  904. 

personal  tender  anywhere,  when,  904. 

readiness  to  pay  at  place  fixed  by  option  is  good,  904  n.  1. 

rule  when  optionor  out  of  state,  904  n.  4. 

rule  when  optionor  evades,  905, 

waiver,  by  refusing  tender  at  place  other  than  fixed  by 
option,  904  n.  1. 

where  designated  in  option,  904. 
good  though  optionor  dead,  905. 

where  option  executed,  when,  904. 
pleading  of,  1120,  1244. 
sufficiency  of,  906, 

by  assignee,  tendering  his  own  note,  907  n.  7. 

check  as,  907. 

effect  of  failure  to  object  to,  912. 

election  made  conditional  by,  842. 

gold  and  silver,  907. 

installments  tendered  in  lump  sum,  not  good,  907. 

in  pleadings,  1244  n.  19,  942, 

money  must  be  at  hand,  when,  906,  907. 

money  must  be  produced,  906. 

money  must  be  offered,  906. 

must  be  made  at  time,  place  and  mode  prescribed,  906,  908. 

not  necessary  to  state  aggregate  amount  of,  when,  907. 

note  and  mortgage  by  guardian  of  minors,  907. 

of  cash  without  security  is  not  good,  907. 

production  of  money  necessary,  when,  906. 

rule  where  payment  and  delivery  are  concurrent  acts,  906. 

second  tender  not  necessary  when  first  is  refused,  930  n.  12. 


INDEX  891 

(Reference  is  to  sections) 

Tender  (of  money) — Continued. 

uncertainty  of  terms  as  to  security  covered  by  cash  clause 
and  tender,  907. 
time  of.     (See  Payment,  sub-title  waiver.) 

after  expiration  of  time  limit  is  too  late,  when,  913  n.  6, 

920  n.  3. 
cases  holding  election  without  tender  of  price,  sufficient, 

915,  922. 

cases  holding  election  without  tender  is  not  sufficient, 

916,  917. 

in  pleadings,  when  proper,  942,  1244  n.  19. 

must  be  made  in  contract  time,  913. 

under  option  to  re-purchase,  916  n.  7. 

when  payment  of  price  and  delivery  of  deed  concurrent 

acts,  921,  922. 
waiver  of, 

by  breach  or  repudiation  by  optionor,  when  payment  is 

act  of  election,  924-926. 
refusal,  etc.,  of  optionor  must  be  absolute,  etc.,  927. 
by   unequitable    conduct    of    optionor,    923,    928.     (See 

Estoppel.) 
but  not  of  third  party,  923  n.  1. 
by  negotiations  for  an  extension  of  time,  925. 
by  negotiations  to  have  wife  join  in  deed,  928. 
rule  of  does  not  excuse  offer  of  performance  before  suit 

or  in  complaint,  926  n.  2. 

Tender.     (Property  or  instrument.) 
as  perfecting  right  of  optionee  to  enforce  contract,  901. 
by  assignee  of  option,  604,  902. 
definition  of,  906. 

of  deed  of  conveyance,  1002,  921,  923,  112  n.  3. 
of  deed  of  conveyance  in  ejectment,  1123  n.  8. 
of  note  of  one  joint  optionee,  not  sufficient,  805  n.  5. 
of  note  of  assignee  not  sufficient,  840  n.  5, 
of  mortgage  debt,  under  option  to  mature,  effect  of,  121. 
of  dividends   on   stock   by   optionee    under   agreement   to 

repurchase,  518  n.  2. 
of  property  necessary  in  sale  and  return,  112  n.  3. 


892  LAW   OF    OPTION    CONTRACTS 

(Reference  is  to  sections) 

Tender  (Property  or  instrument) — Continued. 
of  shares  of  stock,  necessary,  112  n.  3. 
of  shares  of  stock,  mere  notice  not  sufficient,  814  n.  2. 
pleading  of,  1244. 

rule  of  estoppel  applied  to  oral  extensions  for,  412. 
rule  when  delivery  and  payment  are  concurrent,  906,  922. 
under  option  to  return,  time,  112  n.  3. 
waiver  of  insufficiency  of,  by  not  objecting,  912  n.  11  and  12. 

Tenants  in  Common.  See  Joint  Optionees,  Joint  Optionors. 
all  may  join  in  granting  option  on  common  property,  206. 
are  not  partners,  206,  811. 
assignment  of  option  by  one  to  the  other,  607. 
authority  of  one  to  give,  or  take  option,  206. 
authority  of  one  to  receive  or  give  notice  of  election,  805. 
authority  of  one  to  accept  payment  and  promise  deed  after 

right  to  deed  had  been  forfeited,  206  n.  S. 
do  not  sustain  relation  of  principal  and  agent,  206,  811. 
duty  of  non-consenting  tenant  to  repudiate,  206. 
estoppel  as  against  non-consenting  tenant,  206. 
nature  of  estate  of  each,  206. 
notice  of  election  to,  sufficiency  of,  811. 
one  may  grant  option  on  his  undivided  interest,  206. 
payment  or  tender  of  price  by,  902. 
tender  by  one  is  good  for  all,  805  n.  4. 

Terms. 

and  conditions  of  option,  209-213.    (See  Option.) 

Theory  of  Case. 

recovery  based  on,  1121. 

Things  in  Action.   See  Statute  of  Fraxjds. 

Time  as  Essence  of  Contract.    See  Election,  Payment, 
Tender. 
as  applied  to  option  in  lease,  862  n.  3,  864  n.  2. 
as  applied  to  mining  property,  920  n.  6. 
as  applied  to  tender  of  deed  of  property  encumbered.  1006. 
as  applied  to  good  title  and  payment  of  price,  1007  n.  4. 
as  to  delivery  of  deed,  1002  n.  8,  1003. 


INDEX  893 

(Beference  is  to  sections) 

Time  as  Essence  op  Contract — Continued. 

how  made,  after  execution  of  contract,  862  n.  1,  920,  923  n.  5. 
rule  at  common  law,  862,  919,  920. 
rule  in  equity,  862. 

Time  to  Elect.   See  Election,  Time  as  Essence. 

limit,  expiration  of,  works  withdrawal  of  option,  when,  703. 
reasonable  evidence  to  show,  when  admissible,  123  n.  5. 
Sunday  not  counted,  when,  117  n.  10. 
when  fixed  by  terms  of  option,  848. 

must  be  within  fixed  time,  848,  849. 

rule  applies  to  hour  fixed,  849  n.  1. 

election  after  fixed  time  does  not  raise  contract,  849. 

option  expires  with  time  limit,  849. 
is  ipso  facto  withdrawn,  849. 

rule  under  "first  refusals,"  855,  858. 

rule  under  option  to  sell,  853,  855. 

rule  under  option  to  re-purchase,  853,  855. 

rule  under  option  to  return,  853. 

rule  under  option  in  leases,  852. 

rule  under  "appraisal"  clause,  851  n.  2,  1212  n.  9. 

rule  under  "expiration"  clauses,  in  leases,  851,  852. 

rule  under  valuation  clauses,  1212  n.  9. 

rule  when  previous  notice  of  fixed  time  required,  851,  852. 

rule  where  time  fixed  by  contingency,  848  n.  2. 

rule  where  time  fixed  by  trustee,  848  n.  1. 

rule  when  inventory  was  to  be  made,  848  n.  1. 

rule  when  offer  by  letter  requires  answer  by  return  mail, 
849  n.  3. 

rule  where  offer  by  telegram  requires  quick  reply,  849 
n.  3,  856  n.  2. 
when  not  expressly  fixed  by  option,  848. 
reasonable  time  fixed  by  law  (implied),  848. 

when  allowed,  856,  848. 

must  be  within  such  time,  856. 

under  offer  by  telegram,  856  n.  2. 

under  extensions,  859  n.  4. 

under  option  to  re-purchase,  853. 

under  option  to  furnish  coal,  857. 

what  is,  on  particular  facts,  857. 


894  LAW   OF    OPTION    CONTRACTS 

(Reference  is  to  sections) 

Time  to  Elect — Continued. 

when  question  of  fact,  856. 

when  question  of  law,  856. 

parol  evidence  as  to,  856,  123  n.  5. 

pleading  of,  856  n.  6. 

option  is  not  void  for  lack  of  express  time  limit,  848,  222. 

reasonable  time  implied,  848. 
option  without  express  time  limit  is  not  a  perpetuity, 
848,  222. 

reasonable  time  implied,  848. 
calculation  and  construction,  850-862. 
expires  midnight  of  last  day,  850. 
first  day  excluded,  last  included,  850. 
fraction  of  day  not  counted,  850. 
holidays,  rule  as  to,  850. 
under  alternative  stipulation,  854. 
under  clause  reserving  to  optionor  right  to  sell,  855, 
under  "expiration"  clauses,  851. 
under  extensions,  859. 
under  "first  refusals,"  etc.,  855,  858. 
under  offer  to  furnish  coal,  857  n.  4. 
under  offer  to  sell  shares  of  stock,  857  n.  5. 
under  option  subject  to  right  of  sale  by  lessor,  855. 
under  option  to  purchase  in  lease,  852. 
under  option  to  renew  in  lease,  852. 
under  option  to  re-purchase,  853,  855. 
under  option  to  return,  828-830,  858. 
under  option  to  return  bonds  "at  any  time,"  858  n.  1. 
under  option  to  return  goods  if  not  "satisfied,"  858  n.  3. 
under  particular  clauses,  850,  857,  858. 
when  property  optioned  is  of  fluctuating  value,  857. 
when  deed  deposited  in  escrow,  857  n.  7. 

Time  to  Sue. 

anticipatory  breach,  effect  of,  702. 
election  and  notice  as  condition  to.    (See  Election.) 
on  guaranty,  1251  n.  4. 

payment    and    tender    as    condition    to.     (See    Payment, 
Tender.) 


INDEX  895 

(Reference  is  to  sections) 

Time  to  Sue — Continued. 

terms  of  contract  control,  1251. 

when  notice  for  fixed  period,  required,  1251. 

when  defendant  repudiates  or  renounces,  1251. 

Title.     See   Abstract,   Deed   of    Conveyance,   Insurance, 

Property  Under  Option. 
boundary  lines  of  reserved  tract,  fixing  of,  1005  n.  12. 
clear  and  free,  optionee  entitled  to,  1005. 
damages,  right  of  optionor  to,  when  not  regular,  1109. 
decision  of  attorney  of  optionee  on,  when  conclusive,  1007. 
election  made  conditional  by  demand  concerning,  841-847. 

without  election  optionee  can  not  raise  question  of,  872 
n.  9,  1005. 
encumbrances  on, 

abatement  for,  1006. 

case  where  optionor  was  permitted  to  mortgage,  1006  n.  3. 

effect  of  lien  on,  as  applied  to  time  as  essence,  1006. 

lease  is  not,  when,  1006. 

must  be  free  and  clear,  1005. 

rights  of  optionee  when  mortgaged,  1006. 

street  assessments,  1006. 

time  for  removal  of,  1006,  857  n.  6. 
failure  to  pay  price  when  title  regular  defeats  specific  per- 
formance, 1007. 
fee  simple,  implied,  1005. 

unless  lesser  estate  stipulated  for,  1005. 
free  and  clear,  title  must  be,  1005. 
good  and  marketable,  optionee  entitled  to,  1005. 
improvements,  burning  of^  effect,  1005  n.  12. 
optionee,  provision  allowing  to  tw^a  on  and  reject,  valid, 
1007. 

passes  by  assignment  of  option,  lOOT. 
optionee  is  entitled  to  evidence  of,  1005. 
option  not  invalid  because  optionor  has  no  title,  100^ 
optionor  not  required  to  "clear  up,"  1005. 
optionor  allowed  to  make  good  title  within  reasonable  tiijae^ 

1005. 
optionor  right  of,  to  damages  when  title  not  satisfactory 
1109. 


896  LAW   OF    OPTION    CONTRACTS 

(Reference  is  to  sections) 

Title — Continued. 

party  to  suit,  owner  of  legal  title  necessary,  1240. 
plaintiff's  title  in  ejectment,  sufficiency  of,  1123  n.  8. 
reasonable  time  for  optionor  to  remove  encumbrances,  857 

n.  6,  1006. 
rescission  for  want  or  failure  of,  712,  1005. 
rescission  for  failure  to  deliver  deed  of  conveyance,  1002  n.  9. 
satisfactory,  what  is,  1005  n.  1. 

time  as  essence  of  payment,  when  regular,  1007  n.  4. 
when  passes, 

equitable  title  passes  on  election,  514. 

not  prior  to  election,  514. 

not  by  tender  of  deed,  1116  n.  3. 

rule  as  to  personal  property,  1116  n.  3. 

rule  under  alternative  stipulation,  502. 

where  survey  required,  1008  n.  6. 

Trespass. 

optionee   is    trespasser    after    expiration    of   option   time, 
113  n.  10. 

Trust,  Trustee. 

co-agent  not  trustee,  when,  205  n.  9. 
distinguished  from  option,  116. 

duty  of  trustee  in  giving  option  to  get  best  price,  116  n.  2. 
payment  to,  903  n.  3. 

power  of  sale  to  trustee,  not  suspension  of  power  of  aliena- 
tion, when,  222  n.  2. 
transaction  held  to  create  parol  trust  and  not  option,  116. 
transaction  held  to  create  option  and  not  trust,  116. 
relation   as  between   optionor   and  one  of   the  optionees, 

516  n.  3. 
time  of  election  fixed  by  trustee,  848  n.  1. 

Trust  Deed. 

agreement  by  beneficiary  under,  to  sell  is  an  option,  115. 
note  secured  by,  construction  of  clause  accelerating  matur- 
ity of,  120  n.  2. 

Undue  Influence. 

as  bar  to  specific  performance,  1204. 


ixDEX  897 

(Reference  is  to  sections) 

Unilateral. 
contract  defined,  105  n.  1. 

contract,  specific  performance  not  granted  of,  1222  n.  8. 
option  contract  is  said  to  be,  102. 
"unilateral  contract"  as  legal  "solecism,"  102  n.  5. 

Unlawful  Detainer.    See  Detainer. 

Validity  of  Option.    See  Futures,  Fraud,  Mistake,  Per- 
petuities, Statute  of  Frauds. 
agreement  by  corporation  to  re-purchase  capital  stock,  215. 
agreement  by  seller  of  capital  stock  to  re-purchase  at  option 

of  buyer,  215. 
by  executor,  guardian,  etc.,  203. 
by  city,   as  debt  within   constitutional  provision  against, 

incurring,  215  n.  11. 
by  corporation,  to  re-purchase  capital  stock,  215. 
contingent,  not  invalid  because,  215. 
delivery  of  option  necessary,  208. 

determined  by  law  of  state  where  land  situate,  215  n.  11. 
mutuality  of  assent,  necessary  to,  1214. 
of  feme  covert,  207  n.  3. 

of  ' '  first  chance ' '  to  make  contract  of  sale  and  purchase,  212. 
of  "first  refusal,"  211  n.  6.    (See  First  Refusal.) 
of  first  refusal  on  capital  stock,  215. 
on  homestead,  215  n.  11. 
on  capital  stock,  as  between  stockholders,  215. 

not  in  restraint  of  alienation,  215. 

not  a  wager,  215. 

not  unlawful  scheme  to  control  corporation,  when,  215. 

not  a  perpetuity,  when,  215  n.  5. 

not  against  public  policy,  215  n.  5. 

not  because  without  time  limit,  when,  215  n.  5,  848. 
owner  has  power  to  give  option,  215. 
ownership  of  property  not  necessary  to,  215  n.  11,  1005 

n.  8  and  9. 
power   of   corporation   to   take   option   on   its   own   stock, 

215  n.  n. 
speculation,  option  taken  for,  215. 
to  city  to  purchase  plant,  215  n.  2. 

57 — Option  Contracts. 


898  LAW  OF  OPTION   CONTRACTS 

(Eeference  is  to  Bections) 

Validity  of  Option — Continued. 
to  furnish  coal,  216  n.  3. 
to  legatee  in  will,  to  purchase  property,  215. 
to  railroad,  to  locate  its  road,  215. 
U.  S.  I.  R.  stamps  on,  not  required,  215  n.  11. 
when  offer  contemplates  written  option,  208  n.  2. 

Valuation.    See  Arbitration. 

amount  of  payment  or  tender,  under,  911. 
distinguished  from  arbitration,  1213,  213. 
power  of  court  to  fix  price,  1213,  213. 

Value.   See  Damages,  Evidence,  Valuation. 

Vendee. 

remedies  of,  1101-1126.    (See  Remedies,  Optionee.) 

Vendor. 

remedies  of,  1101-1126.    (See  Remedies,  Optionor.) 

Vendor  and  Purchaser. 

mining  lease  does  not  create  relation  of,  113  n.  2. 

Void.   See  Validity  of  Option. 

Wager.   See  Futures. 

option  on  stock  exercisable  on  death  of  optionor,  is  not,  215. 
pooled  capital  stock  with  option  to  purchase  is  not,  215. 

Waiver.  See  Breach,  Election,  Estoppel,  Payment,  Tender. 
as  applied  to  payment  of  installments,  931. 
as  applied  to  form  of  deed,  1004. 
as  applied  to  tender  of  deed,  1002. 
as  to  place  of  tender  or  payment,  904  n.  1. 
distinguished  from  estoppel,  413. 
furnishing  abstract  by  optionor,  as,  1008. 
objection  on  one  ground  as  waiver  of  all  others,  912,  847. 
of  conditional  election,  by  failure  to  object,  869  n.  7. 
of  conditional  election  under  first  refusal,  847. 
of  default  under  mortgage  accelerating  maturity  of  debt, 

119,  121. 
of  election,  868,  870.    (See  Election,  sub-title  waiver.) 
of  written  notice  of  election,  816  n,  1. 


INDEX  899 

(Reference  is  to  sections) 

Waiver — Continued. 

of  option  in  lease  by  paying  rent  after  election,  113  n.  10. 
of  performance  distinguished  from  right  to  sue  immediately 

upon  breach,  702  n.  4,  1251.    (See  Breach.) 
of  stipulation  against  assigning  lease,  608. 
of  tender,  924-926,  928.    (See  Tender.) 
of  timeliness  of  payment,  923-936.    (See  Payment.) 
of  written  notice  of  dissatisfaction,  when,  828  n.  3. 
of  written  notice,  is  question  of  fact,  835  n.  4. 
of  written  notice,  by  receiving  rent,  835  n.  5. 
rule  of,  applied  to  oral  extensions,  412,  413. 

Warranty. 

facts  not  amounting  to,  1005  n.  12. 

Waterworks. 

miscellaneous  cases  involving,  116  n.  3. 

right  of  rescission  where  water  source  went  dry,  712  n.  4. 

Wife.   See  Dower,  Homestead. 

Will. 

devisee  under,  as  party  to  suit,  1241. 

option  in,  to  legatee,  is  valid,  215. 

rights  of  legatees  under  option  in,  805  n.  4. 

Withdrawal. 

action  by  optionor  to  recover  property  as,  704  n.  7. 
acts  working  withdrawal  of  offer,  705,  706. 
by  expiration  of  time  limit,  707. 

notice  not  necessary,  707,  849. 

rule  where  no  time  limit,  704. 
consideration   makes   option   irrevocable,    703.     (See   Con- 
sideration.) 
Cooke  V.  Oxley,  not  followed,  704. 
effect  of  election  by  one  of  several  optionees,  on  right  of, 

703,  805. 

extension  governed  by  same  rules  as  offers  and  options,  703, 

704.  (See  Extensions.) 

fixing  time  limit  of  offer,  does  not  prevent  withdrawal,  703, 
103  n.  5. 


900  LAW   OF    OPTION    CONTRACTS 

(Reference  is  to  sections) 

Withdrawal — Continued. 
generally,  703. 

motive  of  optionor  for  withdrawing,  is  immaterial,  703  n.  3. 
notice  and  communication  thereof,  necessary,  under  offer, 
704. 
action  by  optionor  to  recover  property  as,  704  n.  7. 
acts  working  withdrawal  of  offer,  705,  706. 
arbitrator,  withdrawal  of  appointment  of,  1212  n.  9. 
by  post,  effective  on  receipt,  704. 

unless  option  otherwise  provides,  704  n.  2. 
Cooke  V.  Oxley,  not  followed,  704. 
demand  for  possession  as,  706  n.  5. 
demand  for  rent  under  option  in  lease,  as,  706  n.  4. 
giving  second  lease  and  possession  as,  705  n.  1. 
giving  second  option,  is  not,  of  first  option,  705  n.  5. 
no  right  to  withdraw,  under  real  option,  704  n.  6,  705  n.  4. 
notice  of  failure  to  make  payment,  as,  706  n.  3. 
offer  to  third  person  as,  705  n.  1. 
record  of  deed,  as,  705. 
refusal  of  optionor  to  perform,  as,  706  n.  1. 
refusal  to  deliver  books  as,  706. 
sale  and  conveyance  of  property  as,  704  n.  5,  705. 
sufficiency  of,  question  of  fact,  705. 
time  limit,  expiration  of,  notice  not  necessary,  704  n.  7, 

707. 
to  bank,  not  good  as  notice  to  optionee,  705. 
to  employee,  not  good  as  notice  to  optionee,  706  n.  7. 
when  withdrawal  and  acceptance  of  offer  are  simultaneous, 

704. 
withdrawal  and  election,  crossing  by  post,  etc.,  704  n.  2. 
offer  may  be  withdrawn  before  acceptance,  703. 
offer  can  not  be  withdrawn  after  acceptance,  703. 
offer  to  third  person,  as,  705  n.  1. 
option  can  not  be  withdrawn  after  election,  703. 
same  rule  applies  to  offer,  703. 
same  rule  applies  during  time  limit,  703,  704. 
or  if  no  fixed  time,  during  reasonable  time,  704. 
possession  and  improvements  do  not  make  option  irrevocable, 
when,  703  n.  8. 


INDEX  901 

(Eeference  is  to  sectionfl) 

Withdrawal — Continued. 

suit  to  quiet  title,  as,  705  n.  4. 

termination  of  lease  by  notice,  does  not  affect  option  therein, 

when,  703  n.  8. 
under  clause  giving  optionor  right  to  sell,  708. 
sale  must  be  hona  fide,  708. 
gift  of  property  is  not  sale,  708  n.  4. 
conveyance  by  way  of  advancement,  as,  708  n.  3. 
under  clause  giving  optionee  "first  refusal,"  708,     (See 

First  Refusal.) 
voting  pool  on  shares  of  capital  stock,  as  power  coupled  with 

interest  and  irrevocable,  703  n.  8. 
when  no  time  limit  fixed,  rule,  704. 

Writing. 

necessity  for  written  option.   (See  Statute  of  Frauds.) 
necessity  for,  when  offer  contemplates,  208  n.  2. 


University  of  California 

SOUTHERN  REGIONAL  LIBRARY  FACILITY 

305  De  Neve  Drive  -  Parking  Lot  17  •  Box  951388 

LOS  ANGELES,  CALIFORNIA  90095-1388 


Return  this  material  to  the  library  from  which  it  was  borrowed. 


UCLA 
LAW  LIBRARY 

AUG  1  5  2003 
SEMESTER  LOAN 


0^^  0  6  200^ 


TAWLIRKABr 


UC  SOUTHERN  REGIONAL  LIBRARY  FACILITY 


AA    000  897  208    5 


■U^tl}^v:f'';:f] 


